I read with interest the SMa.r.t. column, "Making affordable housing ... affordable." (April 26). Adaptive reuse as housing is an excellent tool to preserve existing, vacant office space and well-received by the historic preservation community, city planners, and the urban pioneers who now call downtown L.A. home. The reuse of upper floors in the Historic Core of L.A. has resulted in the production of hundreds of new housing units, the preservation of many historic buildings the upper floors of which were vacant for decades, and the revitalization of an important downtown area. These "new" housing units are all market rate, i.e. not affordable to extremely low, very low and low income people.
However, SMa.r.t.'s proposal calls for the conversion of existing, presumably occupied, office space to affordable housing and suggests that the Zoning Code Update be revised to encourage this conversion. I must say that, in all my years of working in the fields of affordable housing and economic development, I have never heard a serious proposal to eliminate jobs as a way to bring the jobs/housing ratio into balance. I think that several issues should be discussed before measures are taken to encourage these conversions.
First, although our jobs/housing balance is out of whack, there are Santa Monica residents who work throughout the city in offices. Were this office space to be eliminated, these residents would lose their jobs and likely find themselves unable to pay rent. I guess the upside is that displacement from their homes would create vacant units that the out-of-town workers left in our city could occupy. But I seriously doubt that this would be acceptable as a moral or a political strategy.
The second issue is one of economic feasibility. The current average annual per square foot rent for office space is $40, which is a conservative estimate. The current annual rent per square foot for an affordable rental unit is $5.28 to $10.56, depending on the income level of the tenant household. I am basing this on a 1,000 sq.ft 2-bedroom unit, but the disparity between office rents and affordable housing rents is large no matter what the size of the apartment we are talking about. This is a rent gap of approximately $29.44-$34.72 per square foot, or $30,000 to $35,000 per year for the two bedroom apartment. Multiplied by the total square footage of the commercial building, the property owner would need to receive a huge subsidy to make the project feasible. And this is before we consider the costs of conversion, which will be high. Since the City is out of affordable housing funds and likely to remain so until a consistent source of funds is identified, this proposal is entirely unrealistic from an economic standpoint.
The third issue is related to property taxes. The prevailing model for affordable housing is one for which a non-profit housing entity serves as the general partner in the ownership structure, thereby making the property exempt from property taxes, which helps the project "pencil" and reduces the amount of public subsidy needed. Removal of commercial properties from the tax rolls through their conversion to affordable housing will have serious negative impacts on school funding and basic local services.
Finally, I question whether existing commercial buildings could provide the amenities that families in affordable housing should have, especially open space.
Although many of us understand the importance of increasing affordable housing opportunities in Santa Monica and welcome creative ideas such as that proposed by SMa.r.t., I do not believe that we can get away from the fact that new construction and the acquisition of existing housing are the most realistic courses of action. We must also remember that new "market rate" housing must include affordable units, at the developer's expense, and that type of housing must be encouraged as well.
Leslie Lambert is a Santa Monica resident.
