by Kevin Cody
Hermosa Beach Mayor Justin Massey extolled the city’s progress in addressing affordable housing, homelessness, and e-bike enforcement during a wide ranging State of the City address Friday night, July 12, in the city council chambers.
His most notable news was the approval, that day, of the general plan housing element by the California Department of Housing and Community. Without the approval, the city would be exposed to the State usurping the city’s control over affordable housing developments.
Redondo Beach is currently engaged in litigation with a developer over his plan to build 2,290 apartments, including 458 affordable units, along Harbor Drive on the AES power plant property. The developer is seeking State approval, bypassing Redondo’s approval process, through a procedure known as the “builder’s remedy,” because Redondo didn’t have its housing element in place when the development plans were filed.
In Manhattan Beach, in January 2023, the developer of a property at Highland and Rosecrans avenues utilized the State Density Bonus Law to get approval for 79 residential units, including six affordable income units. The council initially denied the project, which was zoned for 51 units. It reluctantly granted approval after the developer filed a $52 million lawsuit it was certain to win.
A north Hermosa property owner, like the AES owner, is also seeking to utilize the “builder’s remedy” to get state approval to replace a four unit complex with four market rate units and one affordable unit. But Hermosa’s generally small parcels have deterred developers from utilizing the “builder’s remedy” for large projects.
Massey noted that State approval of Hermosa’s housing element followed council approval last October of a novel planning mechanism known as “land value recapture.”
“Land value recapture itself is not a groundbreaking concept. But it’s not widespread in cities, and our program is particularly assertive,” Massey said.
The council approved rezoning much of the commercial district to mixed use, which allows previously prohibited residential development in commercial districts.
The Land Value Recapture program requires mixed-use developments without low cost housing to pay a $104/ square foot fee for four or more units, and a $76/square fee for one to three units. The fee is waived if the development includes 20 percent low cost housing. But the low cost housing will be subject to a 52 year deed restriction, granting the city 50 percent of the property’s appreciation if it is sold.
“To develop those properties and meet our affordable housing requirements, [property] owners don’t have to pay the city anything. But if they turn around and develop those properties without providing the kind of affordable housing that was the reason we up zoned their property, they have to give the city back some of the increased value of their land, so that we can put it towards building affordable housing,” Massey said. The fees will go into a fund to build affordable housing in the city.
Rezoning the commercial districts to allow residential development enabled the city to meet its Regional Housing Needs Assessment (RHNA), which was required for the Housing Element approval. The state-mandated RHNA required Hermosa to identify sites where 558 new housing units can potentially be built by 2029. Of these, 465 must be affordable to very low, low or moderate income households.
Two other challenges the city made progress on during his term as mayor, Massey said, are homelessness and e-bike violations.
Hermosa received a $1 million federal grant, through Representative Ted Lieu, to deploy a mobile mental health unit to help the homeless in non-emergency situations.
“We still have our law enforcement officers, we still have our mental health evaluators, and our partners like Harbor Interfaith. And now we have HB Cares, our mobile mental health unit. We make regular contact with our homeless population. We know them on a first name basis…. We connect them to services whenever they are ready,” Massey said.
To address swelling complaints about the swelling number of e-bikes, Massey said, the council enabled the police to impound bikes whose riders violate traffic laws, and increased e-bike traffic citation fees.
“Frankly,” he said, “the explosion in popularity of e-bikes means we need to continually devote [enforcement] resources to it…. We’ve coordinated with the Hermosa Beach City School District to educate students on responsible e-bike riding,” he added.
Massey spoke briefly about plans for a new civic center, beginning with “public input.”
“That process will start very soon,” he said.
By very soon, he meant three days after his address. On Monday, the city issued a press release inviting residents to apply for appointment to the Hermosa Beach Civic Facilities Community Advisory Group. The group will make recommendations to the council about plans and financing for a new civic center. The city’s consultant estimated a new civic center’s cost at $60 million to $120 million.
Massey campaigned during his first council election in 2015, and again in 2019 on leading the city toward carbon neutrality.
Friday night he declared, “We continue to build out our EV charging network…. And close to 30 percent of our vehicle fleet is electric. We continue to work to green not only our community, but our city operations as well.
The town’s switch this year for electrical power from Southern California Edison to the Clean Power Alliance has resulted in over 90 percent of Hermosa residents receiving 100 percent renewable energy,” he said.
“That single change has enabled the city to meet the general plan carbon reduction goals decades ahead of schedule,” he said.
Massey saved until the end of his address, a discussion of the sales tax measure on the upcoming November Ballot.
“This brings us to my brief final closing remarks…. In February, the council placed a three quarter percent sales tax measure on this November’s ballot, with a focus on public safety and infrastructure. What’s driving this is that across the public and private sector, material costs have risen, and with it, the cost of goods and services….”
He showed a graph from the city budget, adopted last month.
“And as you can see, revenue falls short of expenditures starting in fiscal year 2025/2026 and the gap gets bigger and bigger as you go out,” he said.
The graph showed a balanced budget this year, but a deficit ballooning to $3 million in fiscal year 2029/2030.
“We continue to have strong transient occupancy tax (hotel bed tax)….We continue to have strong growth in property tax revenue… [But] we have other revenue sources that are staying static or declining …. In order to continue to meet the needs of our community we believe a sales tax is the right way to go. It will generate $3.5 million annually. Almost half of the revenue will come from visitors to the city, so it is as optimal a tax base as you can ask for.”
Massey did not discuss the upcoming November City Council elections. Massey’s second term and Councilmember Mike Detoy’s first term expire in November. Detoy is seeking reelection. Massey has not indicated publicly whether or not he will seek a third term. Hermosa does not have term limits. ER
