City will be asked to kick in thousands for project
Buying a home in Santa Monica at an affordable price may be pie in the sky to some, but it just might happen for a few.
Habitat for Humanity wants to build affordable townhomes and condominiums for low-income residents, with the city’s help.
The project would be an experiment for Habitat for Humanity, which typically builds single-family homes. It also would be a new endeavor for Santa Monica, which does not build low-income, for-sale homes.
For the project to move forward, the city council will have to allow a one-time exemption from ordinances that forbid Santa Monica from using affordable housing redevelopment funds to build any type of low-income housing that isn’t rental.
“There have not been a lot of opportunities for people who want to own affordable housing,” said Tad Read, a city housing administrator.
Founded in 1976, Habitat for Humanity is a nonprofit, 501(c)(3) organization that works in partnership with local communities to make affordable home ownership a reality. Through volunteer labor and tax-deductible donations of money and materials, Habitat for Humanity builds and rehabilitates affordable homes with the help of future homeowners. Habitat for Humanity homes are sold to families at no profit and financed with affordable, no-interest loans. Future homeowners are required to contribute 500 hours of their own labor into the building of their home.
The Los Angeles affiliate was founded in July, 1991 and has built more than 80 houses in South Central Los Angeles, East Los Angeles, Southeast Los Angeles, and Venice. None have been built in Santa Monica.
Habitat for Humanity is proposing between six and eight units on an 8,000-square-foot vacant parcel on 19th Street between Pico Boulevard and Delaware Avenue. However, Habitat for Humanity’s deal to purchase the vacant lot is dependent upon whether the city will help fund the project.
Most of the condominiums would be two-bedroom units — with the possibility for a few one-bedrooms. The organization has agreed to give preference to local residents and workers in Santa Monica.
On the free market, the median sale price of a two-bedroom house is about $565,000, while the median price of a two-bedroom condominium is close to $435,000, according to the city.
Based on current interest rates and standard lending criteria, the city estimates the annual income required to purchase a median-priced two-bedroom house or condominium in Santa Monica would be about $143,700 and $110,700 respectively.
People who make less than half of that would be able to buy a home in Santa Monica under Habitat for Humanity’s roof.
“What’s clear is that there is very little out there, if anything, available to low and moderate income households,” Read said. “So just based on the numbers there is clearly a gap in the market.”
Some advocates of home ownership incentive programs in the city’s east side neighborhoods said they want to make sure cheap, expendable housing is not being built.
“We will expect a higher standard than what Habitat is used to producing, and I think it is up to us to ensure they actually produce it,” said Peter Tigler, chair of the Pico Neighborhood Association. “Clearly what they have done in the past is strictly single-family and they have never really done townhouse stuff before so this will be a switch for them.”
For each condominium Habitat for Humanity builds, city officials expect to shell out anywhere between $100,000-$130,000 per unit. Tigler said that figure falls well below the $250,000 per unit the city allows itself to spend on affordable rental housing.
“The city is going to have to compare oranges to oranges and apples to apples when it comes to developing affordable housing,” he said.
City officials typically do not want to invest public funds into home ownership incentives because they can fit more rental units into a project than condominiums. Rental units can be income-restricted for longer periods of time, while those who buy into income-restricted housing often lose out on the benefits of having their property increase in value.
Read said the city plans on tying Habitat for Humanity’s housing to an undetermined price index that will allow for a regulated increase in the property’s value while at the same time ensuring the units remain affordable.
“The goal is to help out the first-time home buyer but make sure they don’t just turn around and sell the unit at market rate,” he said. ing for us to complete the process.”
“The goal is to help out the first-time home buyer but make sure they don’t just turn around and sell the unit at market rate.” — — TAD READ Housing Administrator
Originally published in the Santa Monica Daily Press print edition on July 23, 2002. Read the original PDF.