CITY HALL — Two beautifully located, city-owned residences may soon become affordable housing units.
City Hall is proposing that City Council convey 419 and 1616 Ocean Avenue to a nonprofit housing advisor.
In 2012, council asked city officials to consider the ramification of disposition of all public properties managed by the Housing Division. They acknowledged that residential property management doesn’t fit well within City Hall’s job description.
Owning the properties, city officials said, “requires significant staff resources, including property management company selection and oversight, preparing and monitoring property budgets and expenditures, assisting with resolving tenant complaints, and conferring with the City Attorney’s Office regarding landlord/tenant legal issues.”
Housing officials are presenting council with three options on Tuesday.
They recommend allowing an affordable housing nonprofit to take over, requiring both properties to be available to households with low and moderate incomes.
“Dedicating these properties as affordable housing may require a one-time capital investment from available City Housing Trust Funds estimated at one to three million dollars for initial property rehabilitation and reserve funding for future repairs,” housing officials said of this option.
Another option would have City Hall sell the properties but include certain covenants on the properties’ titles, requiring them to operate as multifamily rental housing.
“Such an approach would minimize the likelihood that the properties would be redeveloped, while ensuring protections for long-term tenants,” city officials said.
All of the properties are currently under rent control. Rents would increase when a tenant moves out, as is consistent with the vacancy decontrol laws.
“Prospective buyers of the properties likely would be drawn to the prospect of long-term income that would increase over time, though the sales value would be expected to be significantly lower than a sale without restrictions,” housing officials said.
Which leads us to a third option: Selling the properties at market value.
This would lead to one-time revenue for the city. Funds garnered from the 419 residence could go toward affordable housing but funds from the 1616 residence, because it was purchased with gas-tax funds, would go back to the Gas Tax Fund.
Given the location, redevelopment would be attractive to the new owners and they may displace current tenants, housing officials said.
Housing officials support the affordable housing option because it protects existing tenants and expands affordable housing in the city.
“These outcomes would both be consistent with City priorities regarding affordable housing and tenant protections,” they said. “In the long run, it also supports the City’s efforts to support geographical diversity in the City’s affordable housing supply by creating new affordable housing resources in some of the most costly neighborhoods of Santa Monica.”
The 1616 property, which is located just south of the Santa Monica Pier and contains 17 apartments and two small commercial spaces, was built in 1953 and purchased by City Hall 20 years later. The 419 property, which is a block south of San Vicente Boulevard and contains seven apartments, was built in 1942 and granted to City Hall in 1977 by the estate of Louise S. Towneley.