After a series of losses, fans of affordable housing got a bit of good news Tuesday.
City Council voted unanimously to cover the local funding shortage for affordable housing for the next two years.
In 2012, in an attempt to plug a budget gap, the state mandated the dissolution of the Santa Monica Redevelopment Agency (RDA), which was City Hall’s primary funding source in its efforts to help build and support affordable housing.
Generally, City Hall put between $15 million and $18 million toward housing each year. In 2009, they gave $35 million.
In response to the funding loss, council placed Measures H and HH on last November’s ballot. Measure H would have raised the tax on the sale of million dollar homes in Santa Monica and Measure HH asked residents if that money should be set aside for affordable housing.
Measure H failed by a wide margin. Measure HH, which was meaningless without the passage of Measure H, passed narrowly.
City officials, taking HH’s passing as a signal that residents still support affordable housing, set out to find a temporary solution.
They sold two city-owned properties for a total of about $13 million, which will go into the Housing Trust Fund.
They got over $5 million from a settlement agreement, which will be set aside for affordable housing.
An agreement forged with a company would allot City Hall a portion of the proceeds from the sale of some condos. City Hall could get nothing or they might get up to $10 million out of the deal. They are recommending setting the score aside for affordable housing.
Additionally, city officials suggested that council set aside a portion of redevelopment residual funds for affordable housing.
“With the dissolution of redevelopment, a portion of the former property-tax-increment funds are distributed to various governmental agencies, including the City,” they said in a report to council. “The amount of taxes that are distributed is based on the total amount of taxes, minus the funds that are needed to satisfy the enforceable obligations of the former redevelopment agency.”
Each year since the dissolution of the RDA, City Hall has received more and more from these residuals. This fiscal year, they expect that the residuals will exceed costs by $1.2 million.
Combining all the aforementioned funding sources, city officials expect to provide between about $20 million and $30 million for affordable housing, depending on the revenues generated by the sale of the condos.
This will cover nearly all of the regular funding that would have been generated by the RDA over the next two years.
“We thought that with the failure of Measure H and the council’s clear priority of continuing to provide affordable housing through our nonprofit partners that it would be helpful if we could identify one-time sources of funds that together would represent about two years of typical operating costs for the affordable housing program in the housing trust fund,” City Manager Rod Gould told council.
Councilmember Ted Winterer, noting that last year’s production of 32 units “probably barely even replaced what we lost,” asked city officials to look into including these residuals as a possible long-term funding source for affordable housing. This could be considered as a part of City Hall’s biannual budget later this year.
Gould told council that they will still likely have to come up with a dependable dedicated source for funds.
“That would probably require going back to the voters in some form or fashion in 2016,” he said. “We wanted to make sure that the program didn’t languish in the interim; hence our recommendation tonight that you put these funds in place so that you knew that if there were opportunities to take down land to cooperate with some of our partners to build or create additional affordable housing in the next 24 months, that you could do so.”