Affordable Housing: Santa Barbara Housing Authority Builds Development for Downtown Workers, Limits Number of Vehicles

HDR Current Developments, August 30, 2004 , Page 553

Housing and Development Reporter Newsletter, Current Developments http://west.thomson.com/product/14990188/product.asp

Hoping to reduce traffic congestion and pollution, the Housing Authority of the City of Santa Barbara, CA (HASB) built a 42-unit development, Casa de Las Fuentes, where tenants must sign a lease that requires them to work downtown and allows them to own no more than one vehicle per rental unit.

The development, which has no federal assistance, also has an admission preference for renters who do not own a vehicle and who agree not to own one during their tenancy.

The city redevelopment agency and city council worked closely with HASB on this project, which was seen as a demonstration of what can be done to reduce the number of motor vehicles on the road each day.  The Santa Barbara work force owns about 30,000 vehicles. Many workers live in more affordable areas north and south of the city and commute 40 to 50 miles one way.

Santa Barbara is one of the most expensive housing markets in the country, where a two- or three-bedroom tract house can cost $750,000, according to Robert Fredericks of the HASB staff. Homes along the southern coast area of Santa Barbara County have a median price of $1.1 million, he said. 

The market rent for a one-bedroom apartment is about $1,500, and a two-bedroom unit rents for about $2,500. Casa tenants generally pay no more than 30 percent of their income for rent, which generally ranges from $481 to $651 for a studio apartment. Rents for one-bedroom units are about $815, depending on income. The development has 18 studio and 24 one-bedroom apartments.

DOWNTOWN JOBS

Many downtown jobs are in the service and retail sectors and include bank tellers, store clerks, waiters, and receptionists. HASB’s marketing objective was to provide housing to young singles and older workers who tend to have these jobs.

The lease requires tenants to work with a downtown area designed by HASB. A tenant who becomes unemployed has 90 days to find a new job within the downtown district or to move out of the building.  The property was opened in 2003, and HASB has not been forced to evict anyone for this reason.

“We haven’t run up against that yet, and I am not sure that is going to be an issue,” said Fredericks . “We are definitely not in the business of having people move in and stay for a long time in this type of housing.” HASB wants to help workers temporarily while they save money so they can afford other housing, he explained.

HASB consulted with legal counsel to ensure that the admission preferences and occupancy requirements do not conflict with fair housing laws.  According to Fredericks , counsel advised that there would be no conflict if the city council viewed these preferences and requirements as part of an important public policy objective.  The city council approved a resolution to this effect.

The lease requirements operate on the same basis as student housing, said Fredericks . “If you are a student and lie in a dormitory, you have housing on campus. But if you no longer have full-time status as a student, you are required to leave,” he said.

LIMITED PARKING

Casa has 42 parking spaces, one per housing unit, compared to the one and one-half parking spaces usually required by the city. Fredericks said the city agreed to the lower requirement after HABC promised to monitor the number of cars closely. Tenants pay $50 a month for parking, a fee meant to act as a disincentive for motor vehicle ownership. Currently, only 16 spaces are rented. 

The land for the development sat vacant for years but is along a main transportation corridor that HASB viewed as a perfect location to build affordable housing for downtown workers who would not have to drive to work. The project’s density of 57 units per acre helped reduce per-unit costs.

The building was constructed according to standards set by the architectural board for the city’s Pueblo Viejo District.  Design details include stucco finish, repeating arches, and landscaped courtyards with fountains, all inspired by Santa Barbara’s historic buildings. The apartments feature balconies and patios.

Fredericks said that the property blends in with tits neighborhood. “This is a tourist town, and we’ve had people turn into La Casa thinking it is a bed and breakfast, asking where they can check in,” he said. We take that as a compliment.”

“The architectural board really holds our feet to the fire when it comes to the design,” said Fredericks . “We can’t skirt those rules even as a housing authority, and frankly, we have built up a lot of good will because of the way we have designed our buildings. The entire community looks at our housing favorable as a result.”

“La Casa is located near shopping and restaurants, and the area is pretty vibrant all day long and into the night,” said Fredericks . “It has been a terrific development.”

DEVELOPMENT FINANCING

Low-cost financing helped keep rents affordable at the development, which cost $5.5 million, or $130,780 per unit. 

Financing included a $3 million tax-exempt note issued by HASB and purchased by a local bank at 5.125 percent interest, which was recently refinanced for 4.375 percent. The city redevelopment agency provided a $1.8 million deferred low-interest loan to be paid by residual receipts, and the HASB provided $700,000 in cash equity to the project.

In addition, the HASB received a $600,000 pre-development loan at 3 percent through the California Housing Finance Agency’s HELP program.  This loan was paid after the project was completed.