Today’s Council Agenda: Redevelopment and Tenant Protections

The economics of redevelopment is changing. The city’s zoning code in the past kept a lid on multifamily demolition and redevelopment. Residential density was limited, building heights topped-out at three stories max in most areas, and the cost of the required off-street parking all made small-scale redevelopment less practical. Sacramento has changed the game: new laws, new incentives, and new limits on local control make redevelopment feasible. In the cross-hairs: rent-stabilized households.

The Coming Wave of Multifamily Redevelopment

When a rental property is redeveloped or converted to condominiums, the displaced rent-stabilized households will find it difficult to find, much less to afford, replacement housing in the city. Some won’t be able to remain in Beverly Hills and some will relocate far beyond the region.

While households face dislocation and disruption, the developer can take advantage of state and local development incentives in order to realize a project that is far larger than what could have been built just a few years ago. Soon we will see buildings as tall as six stories and rise in our multifamily areas. This is not theoretical; city hall has already staffed-up in anticipation.

South Maple Drive is an early indication of what to expect. Proposed for three contiguous parcels at the southwest corner of Charleville (149–159 South Maple) is a six-story development that will be totally out-of-character for the neighborhood. These three low-rise, character-contributing properties provided home to 13 households for many decades. They illustrate the best of our multifamily history. In their place is proposed 29 units with 6 of them categorized as ‘affordable.’

149-159 S Maple today
149-159 South Maple properties today – home to rent-stabilized tenants.
149-159 S Maple rendering
149-159 S Maple tomorrow: luxury condominiums and three half-sized ‘affordable’ rentals.

What’s on the Council Agenda?

Councilmember John Mirisch asked that tenant protections be put on the Council agenda for discussion. But the December 13, 2022 staff report gives short shrift to tenant protections. On the last page of the staff report are included just five brief bullet points that highlight the options:

  • Reexamine relocation fees for all displaced tenants;
  • Reexamine relocation fees for seniors, disabled and families with children in Beverly Hills schools;
  • Require the owner provide each displaced household/tenant with relocation services by a relocation services consultant at the owner’s expense;
  • Require that some or all of the relocation fees be made available to the tenant within 15 days of service of the written Notice to Terminate Tenancy;
  • Analysis [sic] of existing SB 330 regulations to determine if the City can require additional tenant protections under the State law.

Shouldn’t councilmembers talk about the relocation fee schedule? Is a relocation fee sufficient to help a renting household find replacement housing in this rental market? That question is not asked, nor is the city’s current fee schedule included in the staff report.

We’ve been here before: an informational report is presented to Council without an action plan. Nothing concrete comes out of the discussion. Will this discussion be any different? Time and again city hall lowers our expectations.

City Hall Fails to Respond to SB 330

Bullet point #5 should have been the key opportunity. The city could have gotten ahead of the coming displacement by enacting local policies in response to SB 330. That law encouraged redevelopment. It was signed by the governor nearly four years ago. In fact our City Council received a detailed SB 330 staff report in 2019. The title? Consideration of Available Options Related to Senate Bill 330.

That 2019 staff report identified three opportunities for Council to act to extend greater protections for tenants.

1) Require redevelopment to provide a certain minimum percentage of affordable units. Upping the percentage of deed-restricted affordable units would certainly put the brake on redevelopment. It could have been done with immediate effect with an urgency ordinance if at least four councilmembers agreed.

Councilmembers know how it works because they choose that path when the legislature enacted SB 9. That legislation allows a developer to buy a single-family lot and split it in half to build a home on each half-parcel. Councilmembers didn’t like the notion of developers buying up lots in their neighborhood in order to build additional housing.

So Council adopted an interim urgency ordinance. When a lot is split pursuant to SB 9, at least one of the dwelling units would have to be deed-restricted affordable housing. That was a ‘poison pill’ intended to discourage developers from using SB 9 to build additional housing in single-family neighborhoods. However Council didn’t see the urgency for putting the brake on new housing in multifamily areas. (The SB 9 urgency ordinance was recently extended for a second time.)

2) Require ALL replacement rental units required under SB 330 be low-income. SB 330 says that units lost to redevelopment must be replaced. However the state law says that only units occupied by low-income households must be replaced with affordable housing. The 2019 staff report pointed out that the city could extend that requirement to all units razed for redevelopment regardless of household income. But City Council didn’t take any action on that opportunity either.

3) Review and designate historic multifamily properties. SB 330 exempts from redevelopment incentives properties that are deemed to be historically-significant. That means if a multifamily property is potentially eligible for listing on state or local historic registers, or if that property contributes to a multifamily historic district, the parcel would be exempted from SB 330 incentives. In fact the city preliminarily identified numerous multifamily historic districts 20 years ago.

The 2019 SB 330 staff report expressed the urgency of acting on this opportunity. “To have the greatest effect, the designation(s) should occur before January 1, 2020.” But City Council didn’t take action; council never held the required meetings to designate even a single multifamily historic district in Beverly Hills.

Many Missed Opportunities to Preserve Multifamily Apartments

Beverly Hills has an ambivalent relationship with historic preservation. A few trophy properties have gotten the local designation, but that’s only because the property owner pursued the option in order to take advantage of development incentives or to receive a tax break. (There are three multifamily apartment buildings on the local register and eligible for preservation-related tax breaks.)

The city is much less interested in using historic preservation as a tool to, well, proactively preserve properties that are worthy of preservation. For example the Community Development Department has for several years now stalled the completion of the city’s incomplete historic resources survey. That 20-year old survey identified certain eligible multifamily apartment buildings and found many more could contribute to a historic preservation district.

After several years of pressure city hall has reluctantly agreed to finish that survey. A cynic might say the Community Development Department executive ranks were running-out the clock. Is it too late to take advantage of the multifamily historic preservation opportunity that was called-out by the 2019 staff report?

The city also has an ambivalent relationship with affordable housing. Actually the city has long been hostile to it as is suggested by the very few affordable units that have been constructed in the city over the past four decades. But the state is requiring the city to embrace it — call it a shotgun wedding! — so city hall has considered it.

Councilmember John Mirisch last year pressed for a minimum of 20% deed-restricted affordable units in any new residential development. That’s what most of our municipal neighbors require. City Council agreed to only 10%.

Nearly every market-rate luxury residential development entitled in Beverly Hills over the past decade required precisely no affordable unit. The Friars Club, the One Beverly Project, the Wilshire and Maple project, and 462 South Rexford — all are luxury condo projects and not one of them include an affordable unit. The city’s affordable housing trust fund limps along at $1.4M when that’s enough to construct even two low-income housing units.

Our Take

You can see where this meeting will go. Thanks to Councilmember Mirisch we have an opportunity to at least talk about ways the city can protect current tenants from a wave of coming development. But will anything come of it with this Council? City Council to date has only indicated interest to locate new housing south of Santa Monica Boulevard where four out of five councilmembers don’t live. (John Mirisch lives in the Southeast.)

The tone of the staff report also suggests the city’s disinterest in tenant protections: only five brief bullet points are tacked on to the end. That’s no action plan. The staff report doesn’t even include data about tenant displacement in Beverly Hills, or a proposal to raise relocation fees, or even a market analysis of asking rents today that could inform the discussion. This is a staff report that is not in search of a problem.

However we will learn from the tenor of this Council discussion the extent to which our elected leaders care about the plight of tenants.

409-425 North Palm faced the wrecking ball.
409-425 North Palm faced the wrecking ball for luxury condominiums.