Many may think that building affordable housing in Santa Monica is too expensive and logistically daunting. But where others see insurmountable challenges, Community Corporation of Santa Monica (Community Corp) has long found opportunities.
We can’t ignore the challenges — we acknowledge them, while recognizing that the ultimate social benefits of producing affordable housing outweigh the costs. By restoring, building, and managing affordable housing for people of modest means, we make Santa Monica a more inclusive, caring, and environmentally sustainable city.
The bigger picture
Increasing the supply of affordable housing creates opportunities for working families of modest means to remain in the city, which contributes to its distinct character and rich tapestry. For families especially, living in a community like Santa Monica with high-quality schools, transit, and employment opportunities is a game-changer.
We also advance the ethos of environmental sustainability in Santa Monica, as our buildings employ the latest green design features—from solar panels, to drought tolerant landscaping, to low-flow toilets.
Thus, Community Corp improves the neighborhoods where we operate. We preserve historically significant structures for the future and replace neglected properties with buildings at the forefront of architectural innovation. We create homes for working families who make a long-term investment in their neighborhood, bring students to Santa Monica schools, keeping them vibrant, and enable our community’s seniors to age in place.
Yet we couldn’t pursue this mission if we couldn’t work out the finances. Here’s an overview of the process we follow.
Property acquisition
There’s a real scarcity of suitable sites for affordable housing in Santa Monica, and prospective sites are uniquely expensive. The local cost to acquire an existing building to rehabilitate for affordable housing is approximately $450,000-$650,000 per unit. Many potential sites have residents who don’t wish to relocate. Deals often entail quick turnaround and cash offers.
Community Corp has learned to take advantage of opportunities that make purchasing property more feasible. We have utilized City-owned properties, found ways to make our purchase offers competitive, and redeveloped non-residential sites. We have purchased properties that were formerly offices, convalescent or medical uses, and blighted properties and converted them into affordable multifamily housing. We pay market price for property, in order to compete with other buyers in the marketplace.
Project design and land use
Designing and developing infill sites in urban areas with parking onsite is often exceedingly expensive. It requires us to develop architecturally complex and cutting-edge designs, meet city code requirements, navigate a lengthy building permit process, and provide podium or underground parking.
This process requires us to be innovative in selecting sites and constructing units. Community Corp examines density and parking requirements on commercial corridors or near public transit; advocates for streamlined processes and incentives for 100 percent affordable housing projects; and is looking into less traditional types of housing to reduce costs such as offsite or modular construction. We foster a close partnership with the City, working together to meet mutual goals of building high-quality affordable housing. We look for ways to cut costs to stretch the City’s affordable housing funds.
Financing
Affordable housing projects are governed by funding regulations from housing agencies of the City, State and federal government. Many times the regulations conflict and we have to find ways to incorporate all the requirements.
One particular financing opportunity is the Low Income Housing Tax Credit, or LIHTC, the federal government's primary program for encouraging the investment of private equity in the development of affordable rental housing. The LIHTC program allows us to sell credits to investor buyers, and brings equity dollars to construct our developments, meaning less money spent by the City.
One unique strategy for financing affordable housing here in Santa Monica is AHPP, the City’s inclusionary housing program. Residential market rate developers must pay a fee or provide onsite or offsite affordable housing as part of their project. We partnered with the 500 Broadway development team to provide their affordable housing requirements. They are planning 249 market rate units at 500 Broadway and purchased the land at 1626 Lincoln in order for us to construct 64 units of affordable housing to satisfy their obligation. The project will be complete in late September; no City resources were used for its construction.
When Community Corp sees a pressing local need like affordable housing, we fill it. We turn challenges into opportunities. Please visit our website for more information on how you can be part of the solution.
Tara Barauskas is Executive Director of Community Corporation of Santa Monica.
