The fix is in. At the City Council meeting last month on the 22nd of October, the Santa Monica council voted 6 -1 in favor of reducing the size for all new projects constructed on R1 lots (single family houses). A significant number of Sunset Park and North of Montana area residents spoke out at the meeting, pleading for a less restrictive ordinance but in the end, at nearly midnight, the council did as they usually do – ignored the majority and voted for a 45% maximum parcel coverage.
Not too long ago, one could build 61% of the lot. Then it was reduced to 50% and now, 45% will be the norm. Keep in mind, garages, covered porches and patios count against the square footage limit.
There was much debate about guest houses (now mostly referred to as ADUs – accessory dwelling units). ADUs are allowed by state law (cities cannot interfere) and are in fact encouraged. Because ADUs can be built abutting the house, there is talk among homeowners and architects of designing houses with commonwall ADUs so that once the city inspectors have signed off on a completed project, the homeowner might open the connecting walls and incorporate the ADU into the house, thus recapturing the “lost” footage and shhh … adding illegal square footage to the house. A clever architect or designer should not have much trouble designing such a plan.
Without factoring in ADU footage, by way of example, on a typical 7,500 foot 50X150 lot in SM, a 45% limit means that once you deduct your required 400 square foot 2-car garage, you have about 2,975 square feet to play with for your house, covered patios and porch. This will make things tight unless you want to go through the added expense and time of building a basement. Basement footage does not count against your square footage allotment. However, not everyone wants a basement. Basements add significant expense and complexity to a project. And unless you add an elevator, all the stairs of a 3-level home can present a problem for some folks.
Now then, about that vote.
Since the interim zoning ordinance was announced last year, prices for tear-downs have, at a minimum, stalled. Almost immediately after the vote, not quite 3 weeks ago, there have been several price reductions on tear-downs that are sitting on the market. Some will call this a coincidental general market slow-down, but as a real estate professional, I can assure you, these price drops are not coincidental. I have had clients tell me that they are not willing to pay yesterday’s prices with today’s more restrictive size limits in place. It is not just the developers that stopped buying. End-users, those folks that wanted to buy, tear-down and build a new home for themselves have also stopped buying and are now, because they want a larger house than the city will allow, turning their attention to other areas. We hope that this size limitation will boost prices on larger homes that were built prior to the zoning change but only time will tell.
Here is what the City sent to interested parties a few weeks after the meeting:
In Real Estate News:
The least expensive 90402 home to buy right now is 716 21st Street, Listed at $3,200,000.
The most expensive is 423 Marguerita Avenue, Listed at $17,995,000.
There are presently 23 homes available to purchase and they have been on the market for an average of 63 days.
There are currently 11 homes in escrow and the least expensive of these is 523 7th Street, which was listed for $2,950,000.
The most expensive listing in escrow right now is 308 Alta Avenue, Listed at $7,995,000.
On average they were on the market for 95 days before an accepted offer.
The lowest priced closed sale this year is 430 7th Street. It sold for $2,450,000.
The most expensive closed sale this year is 306 Georgina Avenue, selling at $9,250,000,
48 properties have sold year to date.
If you wonder what any of this might mean for you, please call me at 310 924-4014.