Housing: Santa Monica’s newly merged affordable housing list provides opportunities for below-market rate housing but it is far more difficult to get a unit that many residents might suspect. SMDP Image

For decades, the City of Santa Monica has maintained a list of individuals waiting for an affordable housing unit, however, the inner workings of the list have been a mystery to residents, and even to those who administer it.

The alchemy of the list combines income level, household size, current living situation, cultural priorities and personal preference but the magic ingredient that determines when someone on the list will move into an apartment is impossible to identify.

This is due to both the complexity of matching each of these factors to the specifications of an available unit, and because years of poor record keeping on the City’s behalf has resulted in very little meaningful data to analyze.

Prior to March 2020, the City did not have a system to track the number of units in its inventory, how many households were successfully placed or what waitlist priority group they came from.

“We don’t have that data,” said Housing Program Manager Jim Kemper. “It may be that we have it, but it would be a research project and it’s a research project we can’t take on.”

When a unit opened up, the City would provide landlords with a list of eligible tenants from its waitlist, but information about placement outcomes was not always relayed back to the City and some landlords chose eligible individuals who applied outside of the waitlist.

At the same time, nonprofit developer Community Corporation of Santa Monica maintained its own waitlist and other for-profit and nonprofit affordable housing developers ran separate referral and placement processes.

Complaints of bias and lack of transparency in placement were raised across the system.

In March 2020, the City created a centralized waitlist by merging Community Corp’s list with its own. The goal of the new Below Market Housing (BMH) waitlist is to streamline the process for individuals to access housing through a combined portfolio of 2,600 extremely low to moderate income units.

Landlords are progressively transitioning to a new tenant referral system for the BMH list that will better capture data by requiring property managers to report placement outcomes before they can receive referrals for other units.

“There is a commitment to have this data going forward and part of the reason why we combined the list is so that the City has greater visibility as the referral agency on who is getting placed into in each unit to make sure that priority households are getting placed,” said Public Information Officer Constance Farrell.

In the 14 months since the creation of the BMH list, 140 units have been confirmed as filled. The City believes more placements have been made, but lacks data from several landlords who have yet to report outcomes.

On July 13, 2021, City Council voted to alter the prioritization of different groups on the BMH waitlist through the “Right to Return” pilot program. Prior to this meeting, priority went first to individuals facing no-fault evictions in Santa Monica, second to individuals who live or work in Santa Monica and third to applicants from outside of Santa Monica.

Once the City launches the Right to Return application, the BMH list will prioritize up to 100 households and descendants of households who were displaced by the creation of the Civic Auditorium and I-10 freeway in the 1950s and 1960s above individuals who live or work in Santa Monica, but below those facing no-fault evictions.

This program was designed as a means of transitional justice for the primarily Black and Latinx households who lost their homes in the Belmar Triangle and Pico Corridor through the City’s use of eminent domain.

Councilmembers approved the pilot program without seeing data on how many people from each priority group were being housed off the waitlist annually or how this would affect the ability of those living and working in Santa Monica to access affordable housing.

Mayor Sue Himmelrich said she was not aware of the extent to which the City had failed to capture outcomes of waitlist referrals prior to creation of the BMH list, but still supports the prioritization adjustment of the Right to Return Program.

“We were concerned that people who immediately needed housing not be bumped by people who already were in housing, so we have that first (priority) group for people who have been evicted through no fault of their own,” said Himmelrich. “The live-work people, they have a need that’s very pressing as well, but I am aware of that and that’s why we limited this to 100 (applications) because we didn’t want to permanently block them.”

The limited data available on the affordable housing placements, suggests that the Right to Return program may temporarily slow, but will not eliminate, local residents and workers’ ability to move off the waitlist.

Of the 140 placements recorded in the 14 months after the creation of the BMH list, two were households facing eviction, 119 were live-work applicants and 19 were outside of Santa Monica applicants.

Data from Community Corp’s former waitlist shows a different ratio of placement outcomes between live-work applicants and outside of Santa Monica applicants.

Between 2016 and 2019, Community Corp. placed 24 households facing eviction, 139 live-work applicants, and 143 outside of Santa Monica applicants. This represents a 45 percent placement of priority two applicants and 47 percent placement of priority three applicants.

In either case, live-work applicants should continue to receive housing spots when moved to a lower prioritization, but the two data sets suggest different outcomes for the scope of the delay they may experience.

It is also likely that regardless of prioritization, both Right to Return and live-work households will face a long wait before accepting a housing placement due to the low rate at which households referred to a vacant unit actually end up living in that unit.

In the 14 months following the formation of the BMH list, the City has referred 2,500 of the total 5,500 individuals on its waitlist to a vacancy and confirmed filling 140 units. This represents a 45 percent referral rate of vacancies and a 5.6 percent average rate of placement per referral, meaning that the City may go through hundreds of applicants per unit before making a successful pairing.

“It’s always been hard to predict how long someone could wait on the list because it really depends on what kind of unit you want and also what is the income that is set,” said Tara Barauskas, executive director of Community Corp. “It is quite a complex puzzle to match the household with the unit.”

According to Nigel Wallace, senior administrative analyst in the Housing Division, it is difficult to match applicants to vacancies as consumer preference leads many households to turn down units. Individuals might not like the location of the unit, the rent price, or their circumstances may have changed since they signed up for the waitlist.

“There may be some people that say this isn’t the right time for me, I’m not really interested right now,” said Wallace. “A lot of people who are eligible for moderate income units don’t necessarily like the rent that comes attached to it which is $2,300 a month.”

A common misconception about below market rate housing is that it is only for ultra-low income individuals.

Although some units in Santa Monica are designated for households making 30 percent of the Area Median Income, eligibility for moderate income units ranges as high as 120 percent of the Area Median Income. This means that qualifying households incomes for the BMH waitlist could be $24,850 or lower, or as high as $187,300.

Affordable units are designated for extremely low, very low, low, and moderate income levels, which each have a correlating maximum allowable rent. The qualifying income levels and maximum allowable rents also differ by the number of people in a household and the year in which a building received planning approval.

For example, the maximum rent for an extremely low-income one bedroom unit in a building approved before 1990 is $985, but would be $2,364 for a moderate income one bedroom in the same building. If the building was approved between 1990 and 2013, those maximum rents would be $709 for extremely-low income and $2,364 for moderate income, while in a building approved after 2013 the rents would be $480 and $1,760.

Additionally, some buildings like the recently opened 38 unit Greenway Meadows and the upcoming 39 unit Magnolia Villas are catered to senior populations and have an age restriction of 62 or older.

The cumulative effect of these discrepancies is that it is very challenging to match household income, size, age and consumer preference to available units. This makes it difficult to predict how long an individual will sit on the waitlist, regardless of their priority group and placement in line.

“The key thing to remember about the waitlist is there’s not one waitlist you start at the top and work your way down, basically it all really depends on what apartment becomes vacant and when that apartment comes vacant,” said Wallace.

Getting off the waitlist is also made challenging by the very slow rate at which tenants leave affordable units. According to Barauskas, in a typical year Community Corp. experiences less than a 3 percent turnover rate in its existing stock.

Oftentimes, new housing developments provide the quickest pathway for people to get off the waitlist. Since the creation of the BMH list at least 60 placements have been in new units.

In the short-term future there are almost 220 new affordable units slated to open.

The 37 unit Pacific Landing project with one, two and three bedroom units available for people making 30 to 80 percent AMI is expected to be completed this fall. There is also a 58 unit development underway at 1413 Michigan Ave., a 48 unit development at 1819 Pico Blvd. and a 73 unit development at 1834 14th St.

However, moving off the waitlist may become considerably harder in coming years as the May 2020 pandemic budget restructuring eliminated funding for new affordable housing developments.

“Unfortunately, the money in the Affordable Housing Trust Fund had to be used to backfill some of the gaping wounds that were created by the pandemic,” said Barauskas. “We don’t really know when we will be out of the pandemic, so we don’t know when we can get to replenishing it.”

While the purchasing of property for new affordable housing projects has been on pause, the pandemic has only served to widen income inequality and market rate rentals in Santa Monica have continued to rise.

“I’m very concerned,” said Barauskas. “We don’t have any new projects that we’re putting in our pipeline right now, because we can’t. There are opportunities to purchase properties but I can’t take advantage of them unfortunately, so it is a serious problem.”

New housing developments also often face serious pushback from the community. Many residents strongly oppose the Council-approved demolition of Downtown Parking Structure 3 to build new affordable housing and almost 4,000 people have signed a petition to stop the project.

The City of Santa Monica does have a historically strong track record of producing affordable housing.

According to Andy Agle, director of community services, 38 percent of all new developments constructed in Santa Monica since 1994 have been deed restricted affordable housing and since the 1980s over 4,000 affordable units have been built.

I would say that Santa Monica has been a leader in the area for providing affordable housing, I mean I’ve seen so much more effort and sustained consistent leadership and policies since the ’90s on providing affordable housing,” said Barauskas. “I think right now the future’s a little uncertain.”