Beverly Hills takes odd stance on housing.

The city of Beverly Hills is contemplating a novel approach to affordable housing: Go somewhere else.

Like other cities in Los Angeles County trying to grapple with a dearth of moderate-priced housing stock, Beverly Hills has hit upon the idea of charging developers fees to set up a trust fund, and then using that money to build affordable units.

But land is too expensive in Beverly Hills, where in June the median price of a single-family home in the 90210 Zip code was $2.5 million. So affordable housing, according to the proposal, would be built in neighboring cities.

"With prices for a single lot well over $1 million in our city, it's difficult to talk about affordable housing," Mayor Mark Egerman said recently during a gathering of Westside civic and business officials. "Developing housing near the city or outside the city would enable us to produce many more units of affordable housing than could realistically be built within the city."

The controversial idea surfaced in preliminary discussions about an affordable housing set-aside ordinance for the city. Planning director Mahdi Aluzri said those talks are focusing on what incentives to grant developers in exchange for forcing them to build affordable housing or pay into a fund.

Aluzri said that any set-aside or inclusionary zoning ordinance is months--if not a year of more--away. As of yet, there has been no discussion of how much developers would be assessed, nor has the size of the housing trust fund been determined.

In addition, the Beverly Hills plan would require the amendment of a state law that currently limits funding of projects outside city borders.

This approach has drawn cautious praise from affordable housing advocates.

"Setting up the trust fund is a great idea," said Lisa Snyder, director of Housing L.A., a coalition of non-profit affordable housing developers, community leaders and tenant organizations. "The big question is: Where would the housing go? Property values on the entire Westside are so expensive."

John Duran, mayor of neighboring West Hollywood, welcomed the idea, although he noted that the area's already high density could make it difficult to build there. "I was going to say to the mayor of Beverly Hills, 'We'll gladly take your affordable housing money,'" Duran quipped.

Within the building industry, though, the plan is being ridiculed--not so much for the location of the housing but for the idea of adding to builders' costs or fees in order to set up the trust fund.

"The idea of taxing a new homebuyer or homebuilder to pay for affordable housing doesn't make sense," said Ray Pearl, executive director of the Building Industry of Southern California. "It makes even less sense to tax homeowners in Beverly Hills for housing outside the city limits."

He pointed out that in Los Angeles, Mayor James Hahn was able to set up an affordable housing trust fund without charging any new taxes or lees. "We applauded that approach; now it seems Beverly Hills is considering doing the opposite," he said.

As it is, building affordable housing is a risky proposition for developers. High property values in areas such as Beverly Hills make the projects even harder to pencil out, and that's before opposition from residents begins causing additional headaches.

One likely recipient of the city's housing dollars would be Los Angeles, which almost completely surrounds Beverly Hills.

L.A. City Councilman Eric Garcetti, who is spearheading a drive for an inclusionary zoning ordinance in Los Angeles, said he, too, welcomed the idea of a Beverly Hills trust fund. But he said he would like to see that community focus more on mixed-use developments within its own boundaries before pursuing projects in outlying areas.

"Beverly Hills has transit corridors like Wilshire Boulevard that are natural places to add density," Garcetti said.

Nonetheless, Garcetti said he was pleased that Beverly Hills is beginning to address affordability issues. "It shows they finally recognize the severity of the problem," he said. "Now we can work together towards some regional solutions."

Egerman himself said that was one reason the city made the proposal in the first place.

"We have to find creative ways of pooling our funds, find developers for projects on land that is less expensive and maximize the number of housing units for the dollars we raise." Egerman said. "We can do that both as a city alone and in conjunction with other Westside cities."