A local affordable housing developer beat out several potential buyers to purchase an apartment building that went up for sale in a rapidly gentrifying Santa Monica neighborhood.
A 40-unit apartment building at 2033-2101 Virginia Ave. was sold last month to Community Corporation of Santa Monica for $13.7 million, real estate company CBRE announced Wednesday. The building stands in the heart of the Pico neighborhood, which has for half a century been home to a working-class Latino community that is now facing rising rents and evictions as the neighborhood gentrifies.
Community Corp. plans to rehabilitate the building and keep tenants in their homes, said executive director Tara Barauskas. The nonprofit is Santa Monica’s largest deed-restricted affordable housing provider, housing about 4,000 lower-income individuals.
The city of Santa Monica loaned Community Corp. $15 million from its Housing Trust Fund to cover the cost of the building, said city spokesperson Constance Farrell. The affordable housing fund is financed by Measures GS and GSH, which local voters approved in 2016, and redevelopment loan repayments.
Farrell said almost all of the 37 households in the Virginia Avenue building are low-income and many have been living there for decades. When the building went up for sale last fall, residents feared the buyer would convert it into condominiums and evict them, Barauskas said.
“We were very proud that we could partner with the city to make sure that nobody lost their housing,” Barauskas said.
The two-story building was constructed in 1948 and is located across the street from Virginia Avenue Park, which is home to the Pico Branch Library and a weekly farmers market. It contains 24 one-bedroom units and 16 two-bedroom units averaging about 800 square feet, according to CBRE.
Barauskas said Community Corp. will renovate the units this fall and may add additional affordable units to a 6,700 square foot vacant lot adjacent to the 1.47-acre main property.
CBRE Vice President Kadie Presley Wilson, who represented the seller, said the property attracted about 10 offers.
“Given the opportunity to purchase such a large piece of land in Santa Monica, there was substantial interest from buyers,” Presley Wilson said.
Barauskas said the seller, a family who had owned the building since the 1970s, preferred a buyer who would not displace longtime residents.
“We put forward the most competitive offer we could in terms of price and let them know it was our intent to preserve the tenancies, and I think that was important to them,” she said.
As Community Corp. was considering whether to purchase the building, Pico residents who had heard the property was for sale began lobbying the organization and the Santa Monica City Council to buy the property, Barauskas said. Councilmember Greg Morena said the council supported the sale because it will help preserve the city’s ethnic and socioeconomic diversity.
“The people in that building are longtime residents, and it’s incredibly important for us to give everyone a real opportunity to remain in Santa Monica,” Morena said.
Oscar de la Torre, co-chair of the Pico Neighborhood Association, said while he is glad the city and Community Corp. bought the building, he wants the city to go a step further.
“The city should have a goal of purchasing larger buildings, but that’s only half of the solution,” he said. “Our hope is that the city will create a tenant ownership cooperative for these buildings once they’re purchased to give tenants an opportunity to own their own units. We feel that model provides the best protection against rapid gentrification.”
Barauskas said although Community Corp. hopes to purchase more existing buildings, the price per unit of the Virginia Avenue property was unusually low at $341,625. She added that purchasing buildings and bringing them up to code can sometimes be just as expensive as new construction.
“Half of our portfolio is existing buildings, but since I arrived in 2016 I haven’t seen much for sale at the price point that works for us,” she said. “That’s why we’ve done more new development.”
Community Corp. most recently opened the 64-unit Arroyo complex and has several projects in the works in Santa Monica, including the 55-unit Las Flores, 37-unit Pacific Link, 39-unit Greenway Meadows and eight-unit Little Berkeley. The nonprofit also broke ground last month on its first development outside of Santa Monica, the 50-unit Vista Ballona in Mar Vista.