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Affordable Housing

Nonprofit Developer Provides Much Needed Affordable Housing in Santa Monica

Earlier this month, the Los Angeles Homeless Services Authority's report showed the dramatic rise in the number of people experiencing homelessness in Los Angeles City and County. There is no shortage of pundits assigning blame for escalating homelessness. But the bigger question is what can be done to curb the backlash politics that make it so difficult to build housing needed for people without homes.

Affordable housing is one of the politically easier solutions to implement, but even so it can still be controversial in communities where new developments are proposed and built.

Since 1982, the Community Corporation of Santa Monica (Community Corp) has been building and managing non-profit units within city limits. Community Corp builds and manages apartment buildings in Santa Monica, with construction of its first L.A. City development - in Mar Vista - anticipated to open in the next couple of years.

For the most part, Community Corp enjoys the support of Santa Monica residents and the city’s political structure. Roughly 5% of Santa Monica’s residents live in Community Corp housing. Even so, the waiting list to be housed Community Corp properties (5,000 people) is larger than the total amount of residents in Community Corp properties (4,000 people). According to the most recent homeless count, roughly 1,000 people are experiencing homelessness in Santa Monica.

“There’s a big spectrum in how to address homelessness and affordable housing is absolutely part of that,” explains Tara Barauskas, the executive director of Community Corp. “Some people may not make the connection, but most do.”

While homelessless is not purely an issue of affordability – in L.A. County, almost one in three homeless individuals has a serious mental illness or substance abuse disorder – the data points to need to build more housing, especially affordable housing, quickly.

Santa Monica used to have a decent record on this front.

The city lost a major source of state funding for low-income housing in 2012, precipitating a dramatic drop in the number of affordable apartments built. 14 to 19 percent of units built in the previous three fiscal years were affordable, down from more than half of units between 2011 and 2014. During the 2017-2018 fiscal year, the numbers were even more dismal: the city built a total of 46 apartments.

Two of the units were affordable.

Barauskas came to Community Corp after working at A Community of Friends, a non-profit that specializes in building and operating permanent supportive housing. She sees affordable housing as a safety net for many people, and is committed to working with residents who lose income or face new economic challenges to staying housed.

“We had a resident who lost their job unexpectedly,” she says of a tenant who recently faced one of these challenges. “We worked with him to divvy up the rent in a way that allowed them to stay housed while they looked for new opportunities. Affordable housing helps keep a stable place for vulnerable people.”

While Santa Monica has stagnated in growing its housing stock, Community Corp stands out as a rare success story. Last December, Community Corp opened The Arroyo, a 64 unit affordable housing complex of one-, two-, and three-bedroom units at 1626 Lincoln Boulevard. This is more than the city built in the previous two years added together.

The Arroyo is funded as an inclusionary housing requirement for a market rate project planned for 500 Broadway in Santa Monica (more coverage of this project at Santa Monica Next here and here.) The projects share an architect, a commitment to LEED certification, and a high quality of design. In addition to homes, The Arroyo also features two community rooms, a raised platform deck, a common courtyard space with communal gathering space and a play area that includes a basketball court.

Room with a view at The Arroyo
Room with a view at The Arroyo

“In general, our apartments are as nice or nicer than apartments you’ll find in the market place for market rate complexes,” explains Barsaukus.

“The one we just built, the Arroyo, everything is brand new: brand new appliances, hard surface counter-tops, high quality finishes. Our units have full sized bedrooms and living rooms. We don’t do pools that often, but we do other amenities such as community rooms, gardens, laundry rooms, playgrounds…”

A new kitchen at the Arroyo apartments.
A new kitchen at the Arroyo apartments.

The Arroyo, like other Community Corp projects, also provides ongoing services for residents; these include after-school daycare, health and fitness classes, and computer skills training. Community Corp project construction comes from public funds such as developer fees and tax trade-offs. However, the classes are included as part of the rent.

For Santa Monica Mayor Gleam Davis, it is the commitment to building and maintaining a community that makes Community Corp popular with Santa Monica’s residents, whether they are residents of a Community Corp development or not.

“We don’t think of working families as needing support. I think one of the great things that community corp buildings do is they do build community,” Davis explains. “These are the sorts of projects that help the community thrive.”

The Arroyo was designed by local architecture firm Koning Eizenberg who designed the project to visually fit in with the surrounding neighborhood. Keeping an outside visual aesthetic that blends in with the (sometimes tony) Santa Monica neighborhoods has long been a Community Corp strategy to avoid NIMBY opposition and to be “good neighbors.”

Let's be clear. No matter what is built on this site, it's a better use than an abandoned lot; but for Community Corp putting in a visually attractive development is important. This is the site of the future Little Berkeley.
Let's be clear. No matter what is built on this site, it's a better use than an abandoned lot; but for Community Corp putting in a visually attractive development is important. This is the site of the future Little Berkeley. Image: Google Maps

Former Santa Monica Mayor and former Ocean Park Community Organization (OPCO) President Judy Abdo explained that this strategy has been a key part of Community Corp's strategy from the beginning.

Earlier this month, SBLA spoke with Abdo about the early days of Community Corp. The idea to create a non-profit affordable housing developer was born out of a community process funded by a federal community building grant to OPCO. At a meeting to get feedback from the community about concerns, residents of Ocean Park expressed concerns about how their neighborhood would grow. Residents interested in how the community grows formed a committee.

With the support of the city, OPCO secured a second federal grant that enabled the hiring of staff for what would become Community Corp. From there, Community Corp began outreach and planning for its first projects. Initially staff was a half-dozen; this grew to a dozen a few years later.

“We had a lot of neighborhood meetings about what they should look like,” Abdo says of Ocean 43, one of Community Corp's first developments. “There was another debate about whether or not they should be co-ops. But there wasn’t much debate about whether or not they should be there.”

Abdo lives only a few blocks from several Community Corp developments in Ocean Park. Throughout the last three decades, there has been little to no discussion of the “impact” of affordable housing to their community.

“If you walked down the street today, nobody would even know that these units are affordable and not market rate,” Abdo continues. “Nobody talks about it. The people that live in them are our neighbors. That’s it.”

The idea of Community Corp residents as neighbors is one that has roots beyond just the values upon which the non-profit was founded. In a recent Santa Monica Daily Press op-ed, Barauskas takes pains to argue that Community Corp is a good investment for Santa Monica residents. Part of her pitch is an assurance that many Community Corp residents are parts of families, were residents of other rental units in Santa Monica that lost their place due to the Ellis Act (which allows the eviction of low-income renters if the building is being converted to a different use, for example: luxury condos instead of affordable housing) or are people that work in Santa Monica.

“The majority of our new residents are individuals who live and/or work in Santa Monica. However, due to fair housing law, we cannot prohibit or exclude people who don’t live/work in Santa Monica from our units. In addition, the city’s regulations do allow for people who work (not live) in Santa Monica to be given preference,” she writes.

The city requires this prioritization, for people who work in Santa Monica or were residents victimized by an Ellis Act eviction, for affordable housing developers, non-profit and for-profit, to have access to the city’s housing trust fund.

There is a strong argument to be made that such a preference is against the spirit, if not the letter, of the Fair Housing Act law. The act requires that communities not place restrictions on who can and can’t apply for affordable housing should they qualify economically. While “people that live somewhere else” is not a protected class, if shown to discriminate against people of color, or other protected classes, then rules that grant favoritism can be challenged in the courts.

An after-school program at a Community Corp property in Santa Monica.
An after-school program at a Community Corp property in Santa Monica.
Particularly troubling for Santa Monica, a city that cherishes rent control, is how the Ellis Act is used against renters. Ellis was thought to be a way to make it easier for building owners to improve their stock. In practice, Ellis is used to push people out of rent-controlled/affordable housing to make it easier for owners to convert buildings to higher priced condominiums. The Ellis Act damages communities' ability to retain current residents of affordable housing. Santa Monica's policy of favoring residents who lose affordable housing to Ellis-ed apartments is a reaction to a state policy that, intentional or not, is an attack on cities' ability to retain residents in affordable units.

Nobody wants to see a family - with roots in the community, kids in the local schools, and parents with local jobs - evicted and forced to leave the city. But are Santa Monica's preferences fair to a family - at the top of the 5,000-person waiting list - who happens to live in South Central, or Palmdale or anywhere else? Is it fair that other families have to wait even longer?

There are no easy answers.

For its part, Community Corp does its best to maintain a diverse population in its properties - within the city's rules. Roughly 45% of residents identify as Hispanic, another 15% are black, 2% are Asian and less than 1% listed Native American or Pacific Island. Another 20% declined to list any race.

Davis concedes that the popularity of Community Corp projects is at least somewhat tied to the types of residents Community Corp provides housing for.

“For one thing, it’s family housing,” the mayor explains. The vast majority of Community Corp projects are for families, not individuals. “There might be more opposition. Would we be talking about permanent supportive housing where residents might be dealing with mental illness?”

However, at least one future development shows that Community Corp is interested in building housing for higher-risk individuals, too.

Little Berkeley will be a small, two-story, eight unit development planned for 1342 Berkeley Street. What makes this project different than a traditional affordable housing project is that it is specifically designed to provide housing for former foster children making the tough transition to living on their own. Construction is expected to begin this year.

As real estate costs continue to grow and opportunity sites become more rare, Community Corp is looking to invest outside of Santa Monica. Last year, the council held a series of outreach workshops and hearings on a proposed 50-unit affordable housing complex at 3966 Grand View Boulevard by Community Corp. After a quibble over the number of parking spaces, the Community Council voted unanimously to support the proposed project.

Remember that abandoned lot pictured earlier in this story? It will be replaced by Little Berkeley. Rendering via Community Corp
Remember that abandoned lot pictured earlier in this story? It will be replaced by Little Berkeley. Rendering via Community Corp

Comparing Community Corp’s experience in Los Angeles to theirs in Santa Monica is instructional. Despite the Grand View site in Mar Vista already being entitled (zoning in the area had received city bonuses that allowed for higher density development), it is easier to find funding sources to build affordable housing in Santa Monica than it is in Los Angeles.

While an affordable housing development can be a “by right” project, meaning it does not have to go through a lengthy and often costly public approval process, public funding for such a project may not be “by right” depending on local rules. In Santa Monica, a project similar to the one proposed for Mar Vista would have secured local funds in a shorter time period, making the project more attractive for affordable housing developers. If in Santa Monica, the buildings would be open to residents literally years before they would open in L.A.

If Los Angeles were to change this process, which would doubtless bring howls of protest from Neighborhood Councils and the Coalition to Preserve L.A., would the city see a surge in affordable housing projects?

“Absolutely,” answered Barauskas.

Which is not to say that Santa Monica is doing everything it can to unlock its potential to build more affordable housing. The biggest obstacle remains zoning that encourages single-family dwellings and the largest, most political, battles in the city are often around how dense neighborhoods can be.

During our interview, Barauskas and I didn’t directly discuss the city’s ongoing battles over development, but she did add that the most common complaint levied against Community Corp is over the amount of their development focused in the less affluent Pico neighborhood.

“People say, ‘Why aren’t there more projects north of Montana?’ The reality is there isn’t a lot of multi-family zoning north of Montana.” Barauskas explains. North of Montana Avenue is one of the most expensive real estate areas in Santa Monica, which is one of the most expensive cities on the planet in which to purchase a house.

A 2015 study by the MERCATUS Center at George Mason University examined how some areas use zoning to keep affordable housing out of the most expensive neighborhoods. This is a nationwide issue and not one unique to Santa Monica. The MERCATUS study “How Land Use Regulations Undermine Affordable Housing,” also explains how density intended to protect current residents becomes locked into place, preventing expansion for the larger public good:

Low-density land-use regulations tend to be put in place by the first-comers to suburban territory at the metropolitan fringe. . . . These land-use regulations are ultimately too restrictive from the standpoint of economic efficiency. That is, they compel development whose density is inefficiently low even after conditions change and development pressure on the community grows. The initial low-density development pattern, which might have been altered by the market as metropolitan conditions changed, becomes locked in by regulation.

Can Santa Monica be the city to break this mold? After all, it’s not the Democrats that dominate local politics but a local political party that was created in the 1970s and gained control of the City Council in the 1980s. With a handful of exceptions, almost every member of the city’s City Council has been a member of Santa Monicans for Renters Rights (SMRR) since before Community Corp was created.

Former Mayor Abdo was endorsed by them and served on their Board of Directors after leaving office. Current Mayor Davis has run with their support as well.

“One of the great things about Santa Monicans for Renters Rights is not only do they advocate for more and better affordable housing, but they also advocate for renters as a whole,” explains Davis. “SMRR does have an influence in elections, and that makes a big difference. Candidates that are endorsed by SMRR have to answer the basic question: Do you support affordable housing? And that includes deed-restricted affordable housing provided by Community Corp.”

But while SMRR spends quite a bit of time discussing affordable housing and its support of more non-profit affordable housing, its platform on homelessness is generic and devoid of anything specific or controversial. Readers can find SMRR’s 2016 campaign platform, here.

The contrast between SMRR’s platform on affordable housing and its one on homelessness is hardly unique among government and political parties. In many cities, including Santa Monica, increasing affordable housing stock is not listed as a goal or strategy in reports and plans to combat homelessness. In Santa Monica, the Homeless Strategic Goal Action Plan, approved in November of 2017, makes scant mention of affordable housing and doesn't list it as one of their strategies to end the homeless problem in the city.

And while experts definitely consider affordable housing as a key safety net - to prevent people from falling into homelessness and to lift people out of it - its absence in Santa Monica's homelessness plan is similar to many other Southern California cities' plans.

But that may be changing.

Los Angeles County created a planning guide for city homelessness plans. The guide highlights the need to plan for and promote affordable housing developments in cities’ urban plans. Much of the emphasis on affordable housing is aimed at helping cities that are not in compliance with state laws on affordable housing growth and Accessory Dwelling Units (ADUs or "granny flats.")

The county guide is part of a larger message: if a city wants to get its piece of the $350 million generated by a recent sales tax to combat homelessness, it has to take affordable housing seriously and have a plan to grow its stock of affordable housing.

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