TL;DR: Santa Monica's completed multifamily housing in fiscal year 2024-25 ran 81% affordable to low- and moderate-income households, nearly triple the 30% minimum set by the city's 1990 Proposition R, even as affordable completions fell and the approval pipeline showed a thinner 17% affordable share, according to a June 17 report from the city's Housing and Human Services department to the City Council.
How Much Affordable Housing Did Santa Monica Complete in FY 2024-25?
Santa Monica completed 72 multifamily residences in fiscal year 2024-25, and 81% were affordable to low- and moderate-income households while 25% were affordable specifically to low-income households, according to the June 17 report from the city's Housing and Human Services department. Applying that share, 72 units at 81% works out to roughly 58 affordable residences, matching the report's own figure of 58 affordable completions. Both figures far exceed the floor set by Proposition R, the 1990 voter-approved measure requiring 30% of new multifamily housing to be affordable to low- and moderate-income residents, with 15% of all units reserved for low-income households. Five projects delivered the total: a 56-unit, 100% affordable mixed-use development at 711 Colorado Ave., plus smaller condominium and apartment buildings on 17th Street, Franklin Street, 10th Street and Bay Street. For developers, the takeaway is that one large deed-restricted project can push a city's affordable share far past its legal minimum in a single year.
Why Did Affordable Completions Fall While Construction Activity Rose?
Santa Monica's affordable completions fell year over year even as construction activity climbed, per the same report. In FY 2023-24 the city reported 91 affordable residences completed and 243 under construction; in FY 2024-25, affordable completions dipped to 58 while affordable units under construction rose to 321, and affordable units in the planning pipeline jumped from 88 to 367. Citywide, 927 multifamily units were under construction as of the report, of which 321 (35%) were affordable to low- and moderate-income households and 25% specifically to low-income households, both above Proposition R's thresholds. Read together, the numbers describe lumpy delivery: a few larger deed-restricted buildings move the needle in the year they open, then completions pause while a bigger wave works through construction. For developers, that pattern argues against judging any single fiscal year's completion count as a trend; the under-construction and pipeline totals carry more signal than one year's finished-unit tally.
Is Santa Monica's Approval Pipeline Falling Short of Proposition R?
Yes — housing awaiting planning approval carried a smaller affordable share than completed or under-construction housing. The 14 multifamily developments approved during FY 2024-25 would bring 2,146 total units, including 367 affordable to low- and moderate-income households (17% of the total) and 11% affordable to low-income households specifically, both below Proposition R's 30% and 15% thresholds. The approvals mix a 24-story mixed-use tower at 601-609 Colorado Ave. and an 18-story mixed-use building at 1415-1437 5th St. with a 100% affordable senior project at 1217 14th St. and a 100% affordable building at 1217 Euclid St. The report also credited three pending city-owned sites with executed development and disposition agreements as future affordable supply: 1318 4th St. (122 residences), 1217 Euclid St. (48 residences) and 1211-1217 14th St. (82 residences). Notably, none of the units completed in FY 2024-25 relied on city funding — a departure from the cumulative record, which shows the city has funded 1,560 of the affordable units built since Proposition R took effect, or 84%.
What Zoning Changes Is Santa Monica Making to Speed Up Affordable Housing?
City officials adopted a round of zoning and policy changes during FY 2024-25 aimed at streamlining affordable housing approvals. Since Proposition R took effect, Santa Monica has completed 7,089 multifamily residences, of which 2,512 (35%) were affordable, and roughly 24% of all units built since 1994 have been affordable to very low- and low-income households. The changes include:
- Amendments to the General Plan and Zoning Ordinance under the city's 6th Cycle Housing Element
- A streamlined architectural review process
- A new ministerial approval process for housing in the Bergamot Area Plan
- An Adaptive Reuse Ordinance encouraging conversion of non-residential buildings to housing
- Expanded accessory dwelling unit flexibility, plus local rules implementing SB 1211 (ADUs on multifamily-zoned lots), SB 9 and SB 450 (lot splits and duplexes on single-family lots), and SB 1123 and SB 684 (ministerial approval of small subdivisions)
Ministerial and by-right pathways matter to developers because they remove discretionary-hearing risk from a project's timeline; MCG's development advisory services track entitlement differences like these for clients weighing where to deploy capital.
What Does Santa Monica's Affordable Housing Story Mean for Northwest Arkansas Developers?
Santa Monica shows what a mature, voter-mandated inclusionary system looks like after three decades — 35% of all multifamily units built since Proposition R took effect have been affordable, per the city's cumulative tracking. Northwest Arkansas operates under a different model: Bentonville, Rogers, Fayetteville and Springdale set housing policy through their own city planning processes rather than a single regional voter mandate, and growth here is driven primarily by employer-anchored demand around Walmart's Bentonville headquarters, Tyson Foods in Springdale and J.B. Hunt in Lowell, along with I-49 and Northwest Arkansas National Airport (XNA). The distinction matters when comparing markets: Santa Monica's entitlement risk is largely compliance against a fixed formula, while NWA's is reading city-by-city planning decisions. Developers evaluating Bentonville, Rogers or Fayetteville should verify any brokerage's local transaction record and tenure directly — Mason Capital Group's record spans 30+ years of Northwest Arkansas real estate expertise and $2.4B+ in cumulative transactions. Those weighing NWA against coastal California markets can review MCG's Northwest Arkansas investment advisory services or the Bentonville market overview.
Developers evaluating multifamily or mixed-use sites in Northwest Arkansas face entitlement, zoning and affordability questions that differ city by city. Mason Capital Group works with developers on site selection, zoning verification and market-entry strategy across Bentonville, Rogers, Fayetteville and the surrounding corridor. Developers with a project or acquisition under consideration are welcome to schedule a strategy call at 479-925-3333 or through masoncapitalgroup.com.
Frequently Asked Questions
What percentage of new housing in Santa Monica must be affordable?
Proposition R, approved by Santa Monica voters in 1990, requires 30% of new multifamily units to be affordable to low- and moderate-income households, with 15% of all units reserved for low-income households specifically. Santa Monica's FY 2024-25 completions reached 81% affordable, far exceeding that floor, according to the June 17 report to the City Council.
How many affordable housing units is Santa Monica building right now?
As of the FY 2024-25 report, Santa Monica had 927 multifamily units under construction citywide, of which 321 (35%) were affordable to low- and moderate-income households and 25% to low-income households specifically. Both shares exceed Proposition R's minimums, per the city's Housing and Human Services department.
Does Northwest Arkansas have an inclusionary housing mandate like Santa Monica's Proposition R?
Santa Monica's Proposition R is specific to that city; Northwest Arkansas cities such as Bentonville, Rogers and Fayetteville set housing and affordability policy through their own municipal planning processes rather than a comparable regional voter-approved mandate. Developers evaluating the region should verify each city's current requirements directly with its planning department before underwriting a project.
Northwest Arkansas continues to grow as households, employers and capital move into Bentonville, Rogers, Fayetteville, Springdale and the towns around them — growth that carries a responsibility to build thoughtfully alongside civic institutions such as the Razorback Greenway and Crystal Bridges Museum of American Art. Mason Capital Group remains committed to stewarding that growth with care across the region.
About the author: Cameron Torabi, Principal Broker — Mason Capital Group. 30+ years of Northwest Arkansas real estate expertise; $2.4B+ in cumulative transaction activity.
Source: https://www.smdp.com/santa-monica-affordable-housing-production-remains-on-pace-city-report-finds/. Mason Capital Group is not affiliated with the source publication.