In an effort to increase the number of affordable housing units in the city, the Santa Monica City Council approved the negotiation of a land swap between the city and the owners of the beachfront hotels Casa del Mar and Shutters earlier this month.

The exchange of the city-owned empty dirt lot at 1920 Ocean Way for the hotels’ 1828 Ocean Ave. site, which is currently used for hotel parking, will “allow for a greater affordable housing yield than could be built on the city-owned site,” said Andy Agle, the city’s director of Housing and Economic Development.

To identify potential exchange sites, a solicitation of proposals was issued by the city in July 2007.

Three proposals were received, but the 1828 Ocean Ave. site was distinguished by “having the greatest potential housing yield, and is in closest proximity to the city-owned 1920 Ocean Way property.”

The sites are only one-tenth of a mile from each other and the 1920 Ocean Way property will be able to yield up to 80 affordable housing units, said James Kemper, the city’s housing administrator.

The owners of 1828 Ocean Ave. — Neptune Walk LLC and Edward Thomas Companies (ETC) — have also expressed interest in the property exchange for a number of years, Kemper said.

The other two properties up for consideration were 603 Arizona Ave. and 2600 Broadway, which are significantly further away.

The property on Arizona Avenue, which could yield a maximum of 55 affordable housing units, is over one mile from 1920 Ocean Way and the Broadway site, which could yield a maximum of 49 affordable units, is over two and a half miles from the city-owned property.

A preliminary assessment of these properties also showed that their value was “significantly less” than the one at 1920 Ocean Way, so, along with a land swap, a cash payment would also have been required from the property owner, Kemper said.

“For me, one of the issues was proximity to the original lot on Ocean Way and clearly the Pico/Ocean [1828 Ocean Ave.] site is proximate to that,” said Santa Monica City Councilman Ken Genser, “where one at Sixth and Arizona or one at 26th at Broadway simply isn’t. It’s just a whole different neighborhood.”

Genser recalled living in affordable housing back in the 1970s.

“In that neighborhood, I just saw the really wonderful thing of seeing people of very mixed incomes being able to live in a neighborhood together in such a wonderful place and I think that’s a very important factor for me and so I also support the staff recommendation,” he said.

If the city had stuck with the 1920 Ocean Way site — which it has owned since 1979 — it is estimated that it would have been able to build 39 affordable units, Kemper said.

But with the land swap of 1828 Ocean Ave., which is now in the works, the city is able to build “a minimum of 40 residences that are affordable to low-income households.”

It appears, though, that the city will actually be able to build up to 80 affordable units at the 1920 Ocean Way site, once it has successfully acquired the property.