Hermosa Joins the South Bay Housing Trust. Can It Fix Anything?

Hermosa Beach has formally joined the South Bay Cities Council of Governments housing trust, with Councilmember Rob Saemann serving as the city's delegate. Hermosa is now one of sixteen South Bay jurisdictions participating in a regional financing vehicle for affordable housing. An empty gesture, or a meaningful step on the way to an economic solution? Let's break it down for you.

What the Trust Is

The SBCCOG housing trust pools money from member cities, Los Angeles County housing tax revenue, and state grants into a single fund to subsidize affordable housing projects across the South Bay. It partners with non-profit developers, helps assemble project financing, and directs dollars toward parcels where the math actually works.

Hermosa Beach does not have the scale to do any of this on its own. A small city with three square miles of built-out coastline cannot run a Low-Income Housing Tax Credit financing operation, hire a development team, or assemble a multi-million-dollar capital stack. Joining the trust gets Hermosa a seat at a table that can.

Why This Matters: A Five-Minute RHNA Primer

Every eight years, California's Department of Housing and Community Development tells each region how many new housing units it must plan for. The Southern California Association of Governments divides that target among individual cities. The allocation is called RHNA — the Regional Housing Needs Assessment.

Hermosa Beach's allocation for the current cycle is 558 units by 2029. Three quarters of those — 419 units — must be affordable to households earning below the area median income. To comply, the city must produce a Housing Element: a planning document showing where, on which parcels, the city will allow 558 units of housing to be built.

Hermosa's plan does this by designating commercial overlay sites along Pacific Coast Highway, Aviation Boulevard, and Pier Avenue, plus the St. Cross Episcopal Church site on Eighth Street. The zoning permits residential development on these parcels; the city is then deemed compliant.

If a city fails to produce a compliant Housing Element, it loses control of its own zoning. Under a state law called the Builder's Remedy, developers can submit projects that ignore local height limits, density caps, and design standards, provided 20 percent of units are affordable. Hermosa Beach has already lived through one such project: the five-unit, 50-foot building at 3415 Palm Drive, in a neighborhood capped at 30 feet, filed during the window when Hermosa lacked a state-approved Housing Element.

Why It Doesn't Work in Hermosa Beach

Here is the problem. A residential teardown lot in Hermosa Beach trades for $1.5 to $2.5 million. The all-in cost of building a single dwelling unit in the South Bay now exceeds $650,000. To build a unit affordable to a moderate-income family, a developer needs to bridge the gap between what construction costs and what the family can pay in rent. That gap, on land this expensive, is enormous.

Nobody in Hermosa Beach is going to close it. Not the city's general fund. Not state grants. Not the Land Value Recapture fees Hermosa adopted in 2023, which have produced zero applications in fifteen months.

What overlay zoning on Hermosa's commercial corridors actually produces, when developers eventually use it, is luxury market-rate apartments built under state Density Bonus Law — which overrides local height limits in exchange for a small affordable component. Manhattan Beach is now watching this happen at 2301 N. Sepulveda, where a seven-story building is rising on a former rental-car lot on commercial land. Hermosa's overlay sites along PCH and Aviation are structured the same way.

The framework satisfies the state. It does not produce affordable housing.

What a Regional Trust Can Do That RHNA Can't

A regional trust starts from different math. Instead of demanding that each city solve its share of the housing problem on its own land, it pools money and places affordable units where they can actually be built — on parcels in less coastal South Bay jurisdictions where land costs are lower, where infrastructure has capacity, and where non-profit developers can pencil out projects with reasonable subsidy.

It also opens tools that RHNA does not recognize. Rental assistance. Acquisition of existing affordable housing to lock in long-term affordability. Anti-displacement funds. ADU financing. RHNA can do exactly one thing: tell cities to rezone. Affordable housing requires far more.

What the trust cannot currently do is satisfy RHNA. Under state law, Hermosa Beach cannot discharge its 558-unit obligation by contributing to a regional pool that produces 558 affordable units somewhere else in the South Bay. Each city's allocation stays its own to solve.

That gap is the policy question worth asking.

What Hermosa's Seat Buys

Saemann's role as Hermosa's delegate puts the city in the room as the SBCCOG develops its 2026 legislative agenda, which includes RHNA reform. The trust itself is a working pilot for the alternative framework the sub-region wants Sacramento to consider: regional pooling of obligations, supplemented by — not replaced by — local zoning.

Sacramento has so far moved in the opposite direction, toward more state preemption of local control rather than less. Whether a regional trust model can shift that trajectory is uncertain. What is certain is that the current framework — paper compliance, luxury density-bonus towers, occasional Builder's Remedy lawsuits — is not producing affordable housing in Hermosa Beach, and is not going to.

Hermosa has bought a seat at the table where a different answer might be built. The question is whether Sacramento is willing to listen.