City Council
Report
City Council Meeting: September 8, 2026
Agenda Item: 12.B
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To: Mayor and City Council
From: Jing Yeo, Director, City Planning
Subject: Public Hearing and Introduction and First Reading of an Ordinance to Amend the Text of the Zoning Ordinance to Increase Development Standards for Parcels Located Within the R1 (Single-Unit Residential) Zoning District and the Area Bounded By the I-10 Freeway to the South, Dorchester Avenue to the West, Exposition Boulevard to the North, and Centinela Avenue to the East to Allow for the Exclusion of Certain Sites That Are Located Within OneHalf Mile of the Expo/Bundy Stationfrom Senate Bill 79 Implementation Until One Year Following the Adoption of the 7th Cycle (2029-2037) Housing Element of the City's General Plan
Recommended Action
Staff recommends Council:
1. Adopt a finding of statutory exemption from the California Environmental Quality Act pursuant to Government Code Section 65912.160(c); and
2. Introduce for first reading an Ordinance to Amend Chapter 9.06, Transit Oriented Development Zones, to Increase Development Standards for Parcels Located Within the R1 (Single-Unit Residential Zoning District) and the Area Bounded by the I-10 Freeway to the South, Dorchester Avenue to the West, Exposition Boulevard to the North, and Centinela Avenue to the East to Allow for the Exclusion of Certain Sites that are Located Within One-Half Mile of the Expo/Bundy Station from Senate Bill (SB) 79 Implementation Until One Year Following the Adoption of the 7th Cycle (2029-2037) Housing Element of the City’s General Plan.
Summary
On July 1, 2026, Senate Bill 79 (SB 79), the Abundant and Affordable Homes Near Transit Act, went into effect statewide, including in Santa Monica. The new legislation establishes minimum guaranteed development standards (density, floor area ratio (FAR), and height) for qualified housing projects located within one-half mile of specified transit stops in urban transit counties. In Santa Monica, qualifying projects within these 2 of 10
transit-oriented development (TOD) zones are eligible for SB 79’s default standards, unless the site is covered by either an ordinance approved by the State that delays SB 79’s implementation (Exclusion Ordinance) or a TOD alternative plan that redistributes SB 79’s residential capacity within Santa Monica’s TOD zones.
Official SCAG Map Identifying Santa Monica TOD Stops
On July 14, 2026, the City Council adopted for first reading an ordinance to temporarily delay applicability of SB 79 on qualifying sites until one year following adoption of the 7th Cycle Housing Element, anticipated in 2030 (the “Exclusion Ordinance”). This Exclusion Ordinance allows the City to delay implementation of SB 79 in six of Santa Monica’s seven TOD zones, and all TOD Zones that are located wholly within the city, because those areas are already zoned for sufficient housing capacity. The adoption of the Exclusion Ordinance provides time for the City to holistically plan for future housing needs and consider a TOD alternative plan as part of future planning efforts such as the 7 th Cycle Housing Element or Land Use and Circulation Element (LUCE) update. 3 of 10
The seventh of the TOD zones, the Expo/Bundy TOD Zone, which is located partially within the City of Santa Monica and partially within the City of Los Angeles, does not currently meet the statutory criteria for temporary exclusion from SB 79. Specifically, the Expo/Bundy TOD Zone does not have at least 33% of the sites in the TOD zone that are zoned to allow at least 50% of the density and residential floor area guaranteed under SB 79. Therefore, in order to qualify the TOD zone for temporary exclusion, the development standards for at least 52 additional parcels would need to be increased to at least 50% of the applicable SB 79 standards.
On July 14, 2026, the City Council was asked to consider increasing development standards for approximately 66 parcels that are zoned multi-unit residential (R2/R3) and located within one-half mile of the Metro E Expo/Bundy station to allow for the Expo/Bundy TOD zone to qualify for temporary SB 79 exclusion. However, after consideration of potential involuntary displacement risks on these parcels, Council directed staff to return with options to instead increase development standards for all, or a selected group, of Single-Unit Residential (R1) zoned parcels within the Expo/Bundy TOD zone.
On July 28, 2026, pursuant to Council’s direction on July 14, the City Council reviewed three potential options to increase development standards for parcels in the Expo/Bundy TOD Zone so that the entire TOD Zone can qualify for exclusion from SB 79 under the Exclusion Ordinance. The three options include:
• Option 1: Increase Development Standards for 89 R1-Zoned Parcels in the Expo/Bundy TOD Zone Located North of the I-10 Freeway
• Option 2: Increase Development Standards for all 212 R1-Zoned Parcels Exclusively in the Expo/Bundy TOD Zone
• Option 3: Increase Development Standards for 66 R2/R3-Zoned Parcels in the Expo/Bundy TOD Zone
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After reviewing all three options and discussing potential involuntary displacement risks, Council directed staff to proceed with Option 1 and return with amendments to the Zoning Ordinance.
Since Council’s direction, staff has held two community meetings; one was held on August 20, 2026, with property owners directly impacted by Option 1, and the other was an informational community meeting held on August 25, 2026, to provide information on SB 79, the Exclusion Ordinance, and proposed Option 1.
Discussion
Pursuant to City Council direction on July 28, 2026, the proposed amendments to the Zoning Ordinance would increase development standards for 89 R1-zoned parcels in the Expo/Bundy TOD zone located in the area bounded by the I-10 Freeway to the south, Dorchester Avenue to the west, Exposition Boulevard to the north, and Centinela Avenue to the east.
For these 89 parcels, the proposed amendments would:
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• Increase the base maximum density standards from 1 unit per parcel to 1 unit per 1,080 sq. ft of parcel area (40 dwelling units/acre)
• Increase the maximum floor area ratio (FAR) from 0.5 to 1.25, but only for multiple-unit dwellings that meet a minimum density of 40 dwelling units/acre In response to Council’s concern regarding an applicant taking advantage of the increase in FAR by constructing only a single-unit dwelling on eligible parcels, and to ensure these increased standards result in additional housing consistent with the intent of SB 79, staff is proposing to include a minimum density requirement to access the increased standard. This would ensure that the increased FAR standard would be available only to housing projects meeting the minimum density standard of 40 dwelling units per acre, which is the minimum density prescribed in SB 79. No changes to the existing height of 28 feet are proposed.
The proposed standards are also aligned with housing development opportunities already available under existing State housing laws, including those governing accessory dwelling units (ADUs), SB 9 duplexes and lot splits, and SB 1123 small-lot subdivisions. Table 1, below, provides a comparison of existing State laws and the proposed targeted increases, and demonstrates that the increased standards are substantially below the SB 79 standards that would otherwise apply.
Table 1 - Existing State Law vs Potential Increase in Development Standards for a Typical R1-Zoned Parcel in the Expo/Bundy TOD Zone
Typical Site Characteristics:
• R1 Zone
• Parcel Size: 6,500 sf
• Vacant/No Affordable or Rent Controlled Units
• Located within ½ mile of Expo/Bundy Station
State Law FAR Height Density Maximum
Units
Existing R1 Base
Standards
0.50 28 ft 1 unit per parcel 1 unit
Accessory Dwelling
Unit(s)
Exempt • Attached
ADUs –
• 1 ADU through
conversion
5 units (1
single-unit
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Same as
underlying
zoning
district;
• Detached
ADUs – 24ft
• 1 detached
ADU
• 1 attached
ADU
• 1 Junior ADU
dwelling +
4 ADUs
SB 9 (Duplexes/Lot
Splits
Same as
underlying;
800 sf per
unit
guaranteed
Same as
underlying
zoning district*
4 units or 2 units
per resulting
parcel
4 units
SB 1123 (Small Lot
Subdivisions)
• 3-7 units:
1.0 • 8-10 units:
1.25 Same as
underlying
zoning district*
Min. 1,200 sf per
resulting parcel
or 30 du/ac
(10 units max)
5 units
SB 79 2.5 55 ft 80 du/ac 12 units
Targeted Increase
in Development
Standards for SB
79 Temporary
Exclusion
1.25 only for
projects that
provide at
least 40
du/ac
28 ft (same as
existing R1
height)
40 du/ac 6 units
*application of standard cannot physically preclude project achieving the density and size permitted by State law
With the proposed increase in development standards for these 89 parcels, approximately 42.7% of the sites within the Expo/Bundy TOD Zone would be zoned for at least 50% of the density and residential floor area guaranteed under SB 79. This would allow the entire Expo/Bundy TOD Zone to qualify for temporary exclusion from SB 79 until one year following adoption of the 7th Cycle Housing Element, anticipated in 2030.
The proposed approach would allow the City to maintain local control over development standards in the Expo/Bundy TOD Zone while providing additional housing capacity on the targeted R1 parcels. It would also give the City time to evaluate future housing needs and develop a more comprehensive approach to growth through the 7th Cycle Housing Element, a future LUCE update, or a TOD Alternative Plan. 7 of 10
Community Meetings
Since Council’s direction on July 14, 2026, staff held two community meetings on August 20, 2026 and August 25, 2026. While the August 20 meeting was largely with property owners and renters who are directly affected by the proposed increase in development standards, the August 25 meeting was open to everyone. At both meetings, staff provided information regarding SB 79 and answered questions.
At the meetings, two requests were made relating to the proposed ordinance:
1) Whether more data is available regarding the number of renters in the 89 R1- zoned parcels that are proposed to have increased development standards 2) Whether it would be possible to adopt an ordinance that initially upzones only the parcels necessary to meet SB 79’s 33% threshold using the entire Expo/Bundy TOD Zone (including the parcels within the City of Los Angeles), while concurrently adopting a contingent ordinance that would automatically upzone additional Santa Monica parcels if the California Department of Housing and Community Development (HCD) or a court determines that the threshold must be calculated using only parcels within Santa Monica.
Available Data on Number of Renters in 89 R1-zoned Parcels As renter data is not available outside of rent-controlled units, staff cross-checked the 89 parcels with the City’s business license database and found that two of the addresses have valid business licenses for rental of residential property.
Assessment of Alternative to Proposed Upzoning
Staff evaluated an alternative approach as requested during community outreach:
specifically, the City Council would:
• Initially adopt an ordinance to apply SB 79-related zoning changes to a smaller subset of properties based on a calculation of the TOD zone as a whole and not only the portion located within the City; and
• Should the initial approach later be determined to be insufficient or invalid, provide for a “backup” ordinance that would apply SB 79-related zoning changes 8 of 10
to a broader set of properties based on a calculation of that portion of the TOD zone located solely within Santa Monica.
Preliminary calculations indicate that, when the entire applicable TOD zone is considered (parcels within both Santa Monica and Los Angeles), approximately 31% of parcels meet the applicable capacity criteria, 2% below the 33% threshold identified for exclusion. Under this alternative approach evaluated by staff, approximately 36 parcels could receive increased development standards initially, with approximately 53 more parcels subject to the backup ordinance (for a total of 89 parcels).
Upon review, Staff does not recommend moving forward with this approach as it would introduce significant implementation challenges and legal uncertainty.. SB 79 is silent on how to calculate capacity criteria for TOD zones that span multiple jurisdictions. On April 24, 2026, City submitted a request for technical assistance with HCD staff on this issue as it relates to the Expo/Bundy TOD zone, but has not yet received a formal response. In addition, implementation would depend in part on the validity and State certification of the City of Los Angeles’ related ordinances. At the time of staff’s assessment, the City of Los Angeles had not yet submitted its ordinances to HCD for review and certification.
Thus, under the proposed approach, the City would “wait and see” whether it had increased development standards for enough parcels to ensure the properties located within the Expo/Bundy TOD zone are eligible for exclusion. Such a “wait and see” approach would allow for a potentially significant period of time of uncertainty with respect to what the legally applicable development standards would be for housing projects proposed within ½ mile of the Expo/Bundy station. In practice, the City would assume that eligible parcels within that area are temporarily excluded from the SB 79 default standards. Applications for housing projects submitted during this period that propose the SB 79 default standards would not be accepted (effectively denied). But, if it were subsequently determined the City did not calculate the number of parcels correctly, those applications would have been improperly denied, and the City would be subject to liability, including penalties and fines, under the Housing Accountability Act. 9 of 10
Beginning January 1, 2027, denials of projects that meet SB 79’s requirements and that are located in high-resource areas are rebuttably presumed to be unlawful and are subject to penalties of $10,000 per unit. (See Government Code section 65912.157(m)).
This “wait and see” approach further creates implementation uncertainty. The City is not likely to receive timely notice of any action by HCD to certify or reject an ordinance submitted by the City of Los Angeles. If the initial “contingency” ordinance were invalidated based on HCD rejecting an ordinance submitted by the City of Los Angeles, it would be difficult to further provide public notice of such a change in development standards, including when the change became effective.
For these reasons, staff recommends proceeding with the proposed increased standards for the 89 R1 parcels at this time, as this provides the City greater control over implementation, reduces litigation exposure, and minimizes displacement risk.
Should HCD subsequently provide definitive guidance supporting a different approach, including a response to staff’s request for technical assistance, staff could return to the City Council with an amended ordinance.
Environmental Review
The adoption of the amendments to the Zoning Ordinance is statutorily exempt from CEQA pursuant to Government Code Section 65912.160(c) which states that an ordinance enacted pursuant to SB 79 shall not be considered a project under CEQA.
Past Council Actions
Meeting Date Description
April 28, 2026 Overview of Implementation Options for Senate Bill 79 and Adoption of a Resolution of Intention to Direct the Planning Commission to Initiate the Process of Amending the Text of the Zoning Ordinance to Implement Senate Bill (SB) 79
July 14, 2026 Introduction and First Reading of an Ordinance to Amend the Text of The Zoning Ordinance to Exclude Certain Sites from Senate Bill (SB) 79 Implementation Until One Year Following Adoption of the 7th Cycle (2029-2037) Housing Element and to Increase Development Standards for Parcels Zoned Multi-Unit Residential That Are Located Within One-Half Mile of the Metro 10 of 10
E/Expo Bundy Station
July 28, 2026 Options for Increased Development Standards within the Expo/Bundy Transit-Oriented Development Zone to Qualify for Temporary Exclusion from Senate Bill (SB) 79 Implementation Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of the recommended action. Staff will return to Council if specific budget actions are required in the future.
Prepared By: Rachel Kwok, Environmental Planner
Approved Forwarded to Council
Attachments:
A. April 28, 2026 City Council SB 79 Overview (Web Link) B. July 14, 2026 City Council Adoption of First Reading SB 79 Ordinance (Web Link)
C. July 28, 2026 City Council Meeting Options for Increased Development Standards to Qualify Expo/Bundy for SB 79 Temporary Exclusion (Web Link) D. Attachment A - SB 79 Ordinance 9.8.26
E. Written Comments
F. Presentation Item
G. PowerPoint Presentation