Edhat Reader
By Anna Marie Gott
Wouldn’t it be great if the City Council maximized the number of deed-restricted affordable housing units in the Paseo Nuevo Redevelopment Project? They can do this if they require that Alliance Bernstein Commercial (ABC) take on the Santa Barbara Housing Authority (SBHA) as a non-profit general partner.
ASK THE COUNCIL TO REQUIRE THAT THE SBHA BECOME A PARTNER IN THE PROJECT
We have a chance to bring the SBHA into this project with ABC. Why? It appears that “a public financial contribution may be required to move the project forward” and “Alliance Bernstein Commercial may have to adjust its expectation for financial performance.”
If you want the City Council to bring the SBHA into the project to maximize the number of deed-restricted affordable housing units, or tell them not to sign a Project Agreement that violates the height limit set in the City Charter send them an email before Tuesday saying this. You can email the entire City Council at: Clerk@SantaBarbaraCA.Gov, SBCityCouncil@SantaBarbaraCA.Gov. Or you can sign the Change.org petition: Change.org/AddTheSBHA.
THE PASEO NUEVO REDEVELOPMENT PROJECT
Last September the Santa Barbara City Council agreed to have the City Administrator, and the City’s two consulting firms, Strategic Economics and Maxima Group, work with the leaseholder of the Paseo Nuevo and the Ott Parma properties, ABC, and its two partners, AB Commercial and The Georgetown-Company, on an agreement to redevelop the properties to mixed-use (commercial and residential).
The project would transform the heart of the downtown area by reducing the amount of commercial retail space while building an estimated 500 residential units. The unknown is the number of units that would be deed-restricted affordable units or the period of time they would be restricted.
WHY IS THIS HAPPENING?
The City owns the land and ABC, a commercial lender, acquired the ground leases in the mall after Paseo Nuevo went into foreclosure. Today the ground leases have a remaining term of 41 years. This term is not long enough for ABC to recoup their investment if they were to redevelop the properties. So, they are proposing to buy the land and build an unknown number of deed-restricted affordable housing units. – The number of units is dependent on the project’s feasibility.
The City wants to revitalize the downtown by redeveloping it with housing, and it is further incentivized to spur the development of affordable housing as it has consistently fallen behind in producing affordable housing. In fact, the City’s Regional Housing Need’s Allocation has a deficit of 2,232 moderate and affordable units with a deficit of just 36 above moderate units (market rate and above).
ABC owns what are essentially two undesirable 41 year ground leases. To say that the City is in a strong negotiating position, would be an understatement. Yet the City Council doesn’t seem to be acting like it has a lot of leverage. More importantly, it seems that the City Council could acquiesce and move forward with the bare minimum of residential units due to ABC’S desire to maximize their profits when adding a non-profit to the mix could be a game changer.
The City Council was enthusiastic about the opportunity and their top priority was affordable housing, but there was no consideration of requiring that ABC partner with a non-profit partner to maximize the amount of affordable housing.
After the meeting, there was an expectation that the next time this was discussed at a City Council that we would have a better understanding of exactly how many units of housing would be proposed. Yet the staff report for Tuesday’s meeting says: “The final height of the project along with the number, size, and income levels for the restricted affordable units will be determined as part of the review process and before execution of the DDA.”
So, after 6 months of working on this project the City still has no idea how many, or how few, affordable housing units it can negotiate with the developer in exchange for transferring the property to ABC. This is the exact position the City was in 6 months ago. And let’s remember a key point from the City Administrator’s presentation in September and in the staff report: ABC was positioned as needing a lot of market rate units to make the project “feasible” to them ($$) and because of this, few affordable units would be built.
SANTA BARBARA HOUSING AUTHORITY AS A NON-PROFIT GENERAL PARTNER
Disappointingly, the entity in town with the most experience building deed-restricted affordable housing, the SBHA, was never consulted about the redevelopment project after they had made it abundantly clear that they wanted to be involved. (See SBHA letter on Paseo Nuevo Redevelopment).
The partnership could be structured so that the SBHA would own and manage these units while ABC owns the rest of the development. As I see it, that’s a real “win win” for the community and I was stunned to hear that Rebecca Bjork, the former City Administrator, never reached out to the SBHA before the meeting, after the meeting, or after Rob Fredricks sent the SBHA letter on the Paseo Nuevo Redevelopment to her and the entire City Council.
Imagine if the SBHA were brought into the project. The City Council could “swing for the fences.” They could get a minimum of 30% – 40% and maybe even 50% or more of the residential units set aside as deed-restricted affordable units. This could mean a minimum of 150 to 250 new deed-restricted affordable units.
THE SBHA LEVERAGES TAX CREDITS TO BUILD AFFORDABLE HOUSING
If the SBHA were brought in as a non-profit general partner they could seek out tax credits for the project to build deed-restricted affordable units.
As an example, 100 units of affordable housing costs the SBHA $700,000 per unit to build which means the SBHA would need to raise $70,000,000. But because they can leverage tax credits to build affordable housing, by a factor of $8 to $1, they would only need to raise $8,750,000 through the sale of tax credits to large corporations to build 100 affordable units. – These units would then be deed-restricted affordable housing units for 99 years, or in perpetuity.
IF THE SBHA WERE A GENERAL PARTNER THE “FEASIBILITY” ISSUE DISAPPEARS
If the SBHA became the non-profit general partner, the deed-restricted affordable housing units wouldn’t cost ABC a penny to build.
So, by bringing in the SBHA as a non-profit general partner it makes it much easier for the project to be “financially feasible” ($$) for ABC.
Isn’t this exactly what ABC and the City Council wants?
THE PROJECT AGREEMENT VIOLATES THE CHARTER
The Project Agreement states that the City Council agrees to provide a waiver that allows ABC to violate the City Charter height limit. The Council should not sign an agreement that violates the City Charter – if a judge hasn’t determined it is illegal.
TUESDAY’S CITY COUNCIL MEETING DOCUMENTS
Op-Ed’s are written by community members, not representatives of edhat. The views and opinions expressed in Op-Ed articles are those of the author’s.
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Housing is going to be built at Paseo Nuevo whether we like it or not. Would you rather that this housing be mostly market rate? (and exceeding height limits) Market rate housing often attracts out-of-town people who can afford these rents. Meanwhile our local workforce, including essential workers, must commute from elsewhere. Everywhere I go there are staffing shortages or unreliable staff, due to difficulties related to having to commute long distances. We need more affordable housing options for our local workforce.
Not sure I agree with this.
As it is the number of affordable units will depend on the cost of building and the price of the market rate units.
You are proposing to build more affordable units by using a public financial contribution. Basically you are saying either 1) increase taxes or 2) stop spending money elsewhere to pay for more affordable units.
I would vote no on both those options.
Could someone answer this question — When is enough affordable units enough? My understanding today in the City of Santa Barbara we have about 10% of housing units that are affordable. Every affordable unit comes with a ‘subsidized’ cost both up front and ongoing (in terms of reduced or no property tax).
What percentage is enough?
The State’s RHNA (Regional Housing Needs Assessment) that requires zoning to build the specified 8,001 units) includes 2,144 very low income and 1,381 Low income (0-51% of the AMI and 51-80% of the AMI — those both probably would be considered “affordable” – and would be the number required.
SO, answering your question, when is enough, enough, 3,528 would be a start and it could include Affordable – capital A for subsidized.
Another answer would be more of a political answer: what kind of a city do we want, one where 70% of the workers commute in from outside of the area, as is more or less so now; or one where many more are housed here, as used to be so before the real estate market exploded? (SB is not alone in the price explosion, but perhaps alone in being on a narrow coastal plain bordered by sea and mountains, with a history and historic design mandates that make it very attractive.)
It is not a question that has been on the ballot but it is a question that the City Council seems to have answered, for the Paseo Nuevo, at least, and La Cumbre Mall, that we want housing, housing, housing, no matter what the City Charter says about heights and living within our resources — and a good part of that housing should be affordable.
NO NO NO to any more housing authority properties EXEMPT from property taxation‼️ When is enough, enough? Are you willing to pay higher taxes to cross subsidize even more Santa Barbara South County residents, who receive the same services, public schools, protections and benefits at no cost to them? An estimated 1 in 7 reside here at the expense of taxpayers. Isn’t it time to develop starter homeownership housing on the property tax rolls? Downtown needs residents who can afford to eat out, shop, buy museum and theater tickets. Work force housing needs to be on the perimeter within a mile. Workers need opportunities to BUY not rent.
What a Marie Antoinette attitude!! Geeez
LOL!!
“‘Let them eat cake’ is the traditional translation of the French phrase “Qu’ils mangent de la brioche”, said to have been spoken in the 18th century by “a great princess” upon being told that the peasants had no bread. The French phrase mentions brioche, a bread enriched with butter and eggs, considered a luxury food. The quote is taken to reflect either the princess’s frivolous disregard for the starving peasants or her poor understanding of their plight.” (Wikipedia)
…the words “Let them eat cake,” were thought to have been spoken by Marie Antoinette, but this might not be the case actually. Apt reference, nonetheless!
Meaningful numbers of affordable housing in Santa Barbara will never happen! It is like the weather, we all talk about it, but it is beyond our ability to control it. For profit developers cannot build more than a small amount of affordable housing into their developments. The return is just not there if the affordable units cause a reduction in acceptable profit margins. The SBHA is feeling the pain of increased costs of construction. Let them try to make this project affordable, 500 units will
need their own police station. 500 units will produce more crime. This is a proven fact. If you cannot afford to live here or anywhere in CA, then you must do what hundreds of thousands of California families have done; move to an area that one can afford.
Short answer? Yep.
I am absolutely against this idea. Exempt from property taxes? That means I am now paying taxes to support public housing? Enough already. We are destroying a once beautiful town with our crazy ideas. Please don’t ruin it
100%
Perhaps what we need is better commuting options from lower cost areas?
I was recently in Seattle and appreciated their light rail, great to get around with no need for a car.
I saw the planning commission just approved another hotel in the funk zone. This will bring more low wage jobs without appropriate housing. Are we shooting ourselves in the foot?
Some top down planning would make sense. How many low pay jobs do we want? Where will they live? How will the commute? Are there any good examples of communities handling the balance?
What are other communities doing? Certainly not everyone that works in Beverly Hills can afford to live there. How do they and other communities handle it?
Other communities rely on public transit (trains, buses) or their own vehicles — SB is a bit different in that there are no reasonable commuter trains — Gregg Hart (and others) tried for years to get some commuting trains — and the distance from Ventura and Lompoc/Santa Maria are quite great for commuting. Plus, as we all know, gas prices in California are high … and EV usage is mostly limited to the affluent/semi-affluent.
I don’t necessarily support SBHA’s involvement, mostly because I don’t think I support the project (based on my understanding of it). Is it correct that these will be rental units managed by an out-of-state big corporate landlord? If so, yuck yuck yuck.
Actually, the SBHA would manage “its” units, as it does now in SB. I live on the same block as one set and they are well-managed! It would be a percentage of the proposed 500 housing units, not all of them. If the SBHA was not involved then the developer would do so, probably with similar tax advantages complained about above.
But am I correct that the core of the projects we’re talking about is RENTAL units managed by an out-of-state corporate landlord?
If so, the answer should be “Heck No!” to the entire project, and SBHA discussion is a minor footnote.
We need to wake up. These are blocks of prime real-estate owned by the PEOPLE. We’re essentially giving them away to out-of-state investors. Have any of you ever lived in huge rental complexes owned by remote, corporate interests. No way do we want that, no matter how pretty the pictures from the design team will look.
Rental is a not a path toward community empowerment. I support SBHA, but again, they are a footnote in this discussion.
When Alliance Bernstein Commercial’s “child company” (invented precisely for the sake of bankruptcy) went kaput, they take possession of some rights, but not CARTE BLANCHE. We have a lot more power here than council is letting on.
We need to build housing. Not like this.
Thanks Bird for the information. For all of you who think there is any choice in this matter, such as remote commuting options (seriously HTF???: bridges, high speed rail or helicopter/STOL aircraft incoming from Lompoc and Oxnard, a worker community on Santa Rosa Island served by hydrofoil?), etc it’s time to wake up and smell the ambient air. This is a done deal whether you like it or not. These units are going to be built, there will be more housed people, and yes SBHA will be involved at some point as appropriate. SBHA is actually a good example of a public development entity insofar as it wrangles federal monies and makes them available in reasonable projects and has a 40 year plus record of success. Personally I like private development better but in this situation of huge overdraft in housing needs I believe that ANY market rate development or pubic project that pencils out helps the equation by adding legal units to the mix and where set aside low & moderate income is possible that too. Imagine what Santa Barbara would look like now if Dario Pini, and a few hundred other benevolent old school long time landlords who made units available and held the line with reasonable rents when had gone mercenary over the past few years, as well as the SBHA providing stable well managed housing. Without these benevolent Landlord’s imagine what it would be like to get your kid babysat or diaper changes, house cleaned, food cooked, get a cheeseburger or a burrito, something delivered on Door Dash or anything else that requires labor for that matter. Oprah, Harry and rest of the rich will all be in line ahead of you and can send limos to Oxnard or La when they need someone. As a conservative i hate the government most days, but I believe that this housing move in California is needed and beautiful. Look at Berkeley, all the crybabies came out of the woodwork when plans were announced but the state shut them down hard. NIMBY not acceptable in Cali on this issue anymore:
Bottom line: We need government funded housing for those who work here but don’t make enough to live here. Simple. Developers aren’t going to cut their profits or work for free. The state/fed need to step in and provide the money to pay them to develop housing that people can live in for far below the market rate. Yeah, yeah, yeah, I’m a “socialist” or whatever, but we have a crisis where people can’t afford to live in the town they work in. And no, all the service workers and low wage workers in SB/Goleta/Montecito/Carp all moved to where they could afford, we wouldn’t be able to function as a city. Fact.
Simple solution. Build (with government funds, yes our taxes) housing units that people can actually afford. They might not be pretty with Spanish tile roofs, but they’re needed. We get some of the homeless off the streets (you all want that) and housing for those employees who otherwise would need to commute (you all want that too – lower pollution, less traffic).
Of course, this is America and half the country would rather be dead than anything even closely perceived as “socialist.”
Wrong.
So what’s your solution to the crisis, “Doc?” (LOL)
Some quick solutions
1) Employers should pay more for babysitters, cleaners, gardeners etc. If they did perhaps service worker could pay for market rate housing. Set living wages for these jobs.
2) Employers should not pay cash to service workers as this leads to some not declaring their income. How many times to workers ask for cash? In my experience I know several people living in affordable units who would not qualify if they declared their income. Penalize people for not reporting payments. This is the main reason the feds are requiring reporting of over $600 on money transfers. I doubt this will catch most of it.
3) Several years ago there was an audit of affordable housing, from memory about a third were out of compliance — not living there and sub renting the unit etc. The city claimed they did not have enough resources to audit. Not an acceptable answer. We need to use what we have effectively.
4) Affordable units should pay property tax equal to average market rate units to support city, fire, police and schools. Otherwise these units drain the public resources and are a burden to tax payers. It is one thing to subsidize the building of units but today tax payers are subsidizing them ongoing.
5) Set minimum residency requirement for affordable housing. 10 years seems like a good number.
10 years? How is someone supposed to survive here for 10 years BEFORE qualifying for housing?
Some good ideas, but remember…. it’ not just personal housekeeping staff we’re talking about, it’s food service workers, maintenance staff, office assistants, junior level staff, law enforcement staff, medical staff, hospital staff, teachers and professors and many many many more who can’t afford to live here.
“How is someone supposed to survive here for 10 years BEFORE qualifying for housing?” He left out the word subsidized. Man, wake up. Life’s not about “qualifying for housing”. Are you saying people can’t survive here unless they’re given housing? They’ll just die here waiting for a home? BS. Your version of affordable housing is a recipe for disaster dude.
Did you even read and understand the words that were written? Clearly not. Your little rant makes absolutely zero sense.
He was talking about a requirement to qualify for affordable housing. If you need affordable housing, how are you supposed to live here with unaffordable housing for 10 years as you wait to qualify.
Of course, you won’t be able to comprehend that simple explanation, but there it is.
Why are you so scared to man up and stand by your comments? You tell others, usually me, to do so, yet EVERY. SINGLE. TIME. you blast out some minimal, but purely antagonistic, “response,” you NEVER heft your stones and stand by it?