With a temporary affordable housing ordinance fast approaching its expiration date, the Beverly Hills City Council approved a permanent ordinance Oct. 12 in a 4-to-1 vote. The law, known as an Inclusionary Housing ordinance, requires large development projects in the city to include 10% of its units as affordable housing.
The new permanent law is a slightly modified version of the temporary inclusionary housing ordinance which was approved in 2019 and is set to expire Dec. 16 this year. The permanent law was approved in part to comply with California State requirements set by the Southern California Association of Governments (SCAG).
Beverly Hills needs to add more than 3,000 affordable housing units by 2029, according to SCAG’s latest Regional Housing Allocation Plan. California requires the city to make efforts to encourage development of those needed units.
“I think it’s a good starting-out place and I don’t think it’s the end of this conversation or the end of what our regulations will be into the future,” said Ryan Gohlich, Beverly Hills Director of Community Development, during the Oct. 12 meeting. “For this moment in time, I think that we’ve prepared appropriate regulations for Beverly Hills, but I do think that we will continue this conversation in the future.”
While the Council approved the ordinance by a four-fifths vote, support for the law from council members was tepid. There was a consensus that council should revisit affordable housing on future agendas.
“The fact that there’s a 10% inclusionary requirement I think is appropriate,” said Councilmember Lester Friedman. “I’m comfortable with that as a starting point especially in light of the fact that there appears to be more requirements coming down from the state in any event.”
Mayor Robert Wunderlich, Vice Mayor Lili Bosse and Councilmember Julian Gold, M.D., echoed Friedman’s sentiments.
“I think that it’s a topic that could be ripe for unintended consequences,” said Wunderlich. He added that he is supporting the law for now but with the stipulation that it would be reexamined in the future.
Councilmember John Mirisch voted not to approve the ordinance. He criticized the law for allowing developers to choose whether inclusionary housing in their projects is built for moderate income, low income or very low-income residents. He said it should require a percentage of low and very low-income housing.
Mirisch also said he would like to see a requirement of 12% to 15% affordable housing.
“If we care about affordable housing, and we all say we do, we should be looking to be at that upper end,” said Mirisch. “I’m glad that we’re at least moving forward even though it’s not the ideal ordinance, and I hope we can continue working on it.”
City staff cautioned the City Council that too high of a required inclusionary housing percentage could have too much impact on profitability for potential housing developers, which would possibly slow new affordable housing development.
The ordinance requires new projects of 10 units or more to allocate 10% of the units in the project as affordable housing. Projects with five to nine units must include at least one affordable unit. Projects five to nine units can sidestep the requirement by paying an “in lieu fee,” the funds from which go to the city’s affordable housing fund. Projects smaller than five units are exempt.
The new law faced strong resistance from the Planning Commission before they moved it forward to the City Council.
“In the real world you can’t afford to build in Beverly Hills even without any affordable housing,” said Commissioner Peter Ostroff during an Aug. 26 Commission meeting. “Absent robust incentives, a requirement of some percentage of affordable housing will ensure that no affordable housing will be built–it will guarantee it.”
The Planning Commission has requested direction from the City Council to research and consider creating housing density incentives for builders. City Council held over its planned discussion of Planning’s request and will consider this in a future meeting.
The State of California already has housing density bonuses in place. The state also has inclusionary housing requirements including parts of California Senate Bill 330. City staff said SB 330 exceeds Beverly Hills’ 10% inclusionary housing rule in most cases because it requires developers to replace any affordable housing units they might demolish in the process of building new housing. Most parcels zoned for multi-family in the city have rent controlled units on them.
Because of this the city’s new inclusionary housing rule will mostly apply to future mixed-use developments, said city staff. More mixed-use developments are expected in Beverly Hills as the City Council formally enabled them through an ordinance approved in November 2020.
The City Council also unanimously passed an ordinance Oct. 12 amending public notice requirements for new projects that go before the Planning Commission. The ordinance aims to reduce the costs to the city in its efforts to notify the public while improving public awareness of new projects.