DOWNTOWN — The Community Corporation of Santa Monica celebrated its 30th birthday in September, and like many people hitting the big 3-0, its leadership is being forced to take a long look at its future.
CCSM, Santa Monica’s largest affordable housing provider, took a blow in the last year when Gov. Jerry Brown, the Legislature and the California Supreme Court ripped the rug out from under it and other housing groups by destroying their primary source of funding — redevelopment agencies.
It’s made for a trying 18 months for Sarah Letts, the new executive director of CCSM. Letts took over from 20-year veteran Joan Ling in April 2011 and immediately began work to deal with Brown’s attacks on redevelopment.
Now that it’s gone, she will join local officials and advocates across the state to fight for either a redevelopment 2.0 or another mechanism for paying for affordable housing, which Letts believes is critical to preserving the diversity and life of affluent communities like Santa Monica.
“We want this rich, diverse environment here and the only way to keep it is to make sure there’s enough affordable housing,” Letts said.
CCSM’s mission has drawn its share of criticism from people within the community who believe it creates slums by concentrating low-income housing in certain neighborhoods like Pico, and, as with any large landlords, accusations surface that some of their buildings are poorly-maintained.
Naysayers aside, Letts believes that CCSM has a strong future in Santa Monica, and it will be up to herself, her board and her staff to determine what that will look like. The Daily Press sat down with her this week to discuss how she plans to move the organization forward.
Daily Press: How have the last 18 months been? What’s the learning curve like here?
Sarah Letts: How would I describe the learning curve? I would say the housing development and finance piece of it I understood because I’ve been in the industry for about 20 years. In the 1990s, I did housing development for community-based nonprofits, and then I was with Fannie Mae for 11 years. That’s where I was involved in financing affordable housing. That piece of it was relatively easy.
The biggest learning curve was Santa Monica specific. I wanted to put in all the extra hours needed to absorb the essence of the city, the people, the issues and there’s always a story behind the story and another story behind that story, so it’s really fascinating.
There’s 80 people on the staff here at CCSM, so it’s the process of getting to know everybody and respecting the 20 years of Joan Ling leading this organization and the 30 years of the Board of Directors leading this organization so it’s sort of about learning that history, respecting and honoring that history.
I’m a fresh set of eyes that’s absorbed the past, and now I need to figure out how we’re going to do things for the next 30 years.
DP: What is CCSM’s role in Santa Monica?
SL: We are the antidote to Costa-Hawkins.
(Costa Hawkins is a law passed in 1995 that requires that rents rise to market-rate when a rent controlled tenant leaves his or her apartment.)
So if a private, for-profit developer can buy a building, when a tenant moves out rent will go up to market. When we buy a building, an existing property and a household chooses to move out, we lower the rent to like 60 or 80 percent of area median income. So we do the opposite of Costa-Hawkins.
DP: What challenges do you see ahead of you?
SL: The dissolution of the redevelopment agencies, that was a significant source of financing for affordable housing and major improvements around the city. It creates this crisis and I feel like when there’s a crisis people strip away their old ways of thinking and they say, “How are we going to tackle this crisis?”
So even though it’s a negative that the RDAs were dissolved, we can turn it into a positive. Let’s go back to basics and figure out what’s critical and how we can do things differently.
DP: What’s your plan to accomplish that? What action is being taken?
SL: There are little bits and pieces of legislation being passed at the state level — nothing big yet. Going forward, I plan to be more actively involved in the statewide campaign.
I want to be the local voice at the state level for anything and everything having to do with affordable housing. If we can come up in the future with redevelopment 2.0 … if we can get something like that through in the future, that’s another initiative I would be working toward representing Santa Monica and trying to get any state legislation passed that we can.
I’m only allowed to spend a small percentage of my time since we’re a nonprofit, but I’ll spend an acceptable amount of time doing what I can to make sure there are resources for Santa Monica to use.
DP: Why is funding like Santa Monica and CCSM had through redevelopment so important?
SL: Even though Santa Monica put an impressive amount of resources toward affordable housing, what it really did was allow us to leverage money from the state and federal government and bring those resources to the city. So you know, that’s an important consideration. The city has to figure out what are we going to do to partially replace redevelopment because that’s going to allow us to compete for state and federal money and allow us to bring that money to our city.
DP: Have you ever worked in a place without redevelopment funding? What did you do then?
SL: Most of the time I was investing Fannie Mae’s dollars in deals that had low-income housing tax credits, and so I was in Louisiana, I saw a lot of deals done without redevelopment. … I would say I need to draw upon my experience at Fannie Mae because there were probably a couple hundred deals I underwrote that involved no redevelopment money. I need to do more reflecting on all of those deals I underwrote many deals ago because they were done without redevelopment money, and it is very doable.
DP: Are joint ventures a possible solution?
SL: Our first joint venture project is going to be with [developer] Related for Site B of The Village. That’s 160 units of affordable housing. I anticipate that CCSM is going to consider more joint venture partnerships so that would be one component of it.
DP: How does CCSM’s mission dovetail with other goals in Santa Monica?
SL: There’s a lot of talk now about transit-oriented development. A subtle way to achieve that is for CCSM to acquire properties near transit stations and then, as people move out, we lower rents. And then we’ll keep rents low for as long as the regulatory agreement says we have to, and then probably after that as well. Our regulatory agreements say at least 55 years, some say 80 years. I imagine we get to the point in time that the regulatory agreement expires 55 years in the future and we keep those rents affordable because that’s our mission.
DP: In an era of scarce resources, do you think things will move toward mission-driven organizations doing affordable housing rather than relying on private developers?
SL: The staff you just met out front, they’re income certifying people on the front end, that’s a lengthy, very detailed process where we go out and verify with the third parties — whether it’s the banks, their employers, whatever it is — that they really make what they say they make. We want to verify that people truly are income-qualified. So we have this perfect file on every household that shows they truly are income-qualified, and we’re complying with our local state and federal funding sources that say we have to serve households at these income levels.
I’m not sure if for-profit would like to hire us to manage and lease up their units, and, when some family moves out, make sure an income-qualified family moves in. Maybe some developer would like to hire us because we do that all day long.
DP: What about workforce housing?
SL: Most are working and have some source of income so that they can pay the rent. In a very simple way we are workforce housing.
I would say if there is a segment where we want to encourage them to live in the city a housing voucher is a much more flexible, rational way to get that part of the workforce to be able to afford the unit they’re going to rent.
DP: There’s a perception out there that CCSM builds excessively in low-income neighborhoods, like Pico. How do you respond to that?
SL: There was a time where my recollection of the history I’ve been told we were doing a lot of development in the Pico neighborhood and they said, “enough,” so we really just started to acquire properties all around the city and manage them. They blend in with the rest of the neighborhood.
(According to Letts, roughly 30 percent of CCSM housing is located in the Pico neighborhood. Another 34 percent is in Ocean Park, 13 to 14 percent in Sunset Park and the Wilshire area respectively. The Downtown and North of Montana areas have less than 4 percent of CCSM’s buildings.)
DP: People know CCSM as a housing institution. What else does it do?
SL: We have community rooms at all of our buildings, so lots of times we have programming for the children in the community rooms. They come home from school and they can go to the community room and there are staff and volunteers to help them get their homework done. We have a program called Upgrade, our own program run by our resident services team. Our resident services staff and volunteers help their kids with their homework and then at a couple of our sites we have a partnership with Boys and Girls Club. That’s worked out great.
You keep kids engaged, make sure they’re getting their homework done, you build a community. The resident services staff do so many things that are subtle and hard to quantify but they’re profound. It’s really unfortunate that the work of our resident services team is hard to quantify but really profound.