Voters to decide how $4.5 million fund will be used
Millions of dollars could be funneled from low-interest loans for first-time home buyers to pay for the construction of more affordable housing.
Citing a pressing need for affordable housing and sky-rocketing land values in Santa Monica, officials put Measure KK on the Nov. 5 ballot. The measure asks voters to allow the city to use $4.5 million earmarked to encourage homeownership to also be used to build rental housing for low-to-moderate-income tenants.
The funds originated from fees collected under the Tenant Ownership Rights Charter Amendment, also known as TORCA, which expired in 1996. The program allowed renters to convert their apartments into condominiums.
Of the roughly $20 million collected, half went towards buying a mobile home park, building low-income housing and administrative costs. The other half was slated for low interest loans to purchase, renovate or lease the converted units — which were typically much less than the average Santa Monica condominium.
But city officials say demand for the loans has been very low and few have been administered in recent years. Meanwhile, they say the need for affordable housing remains very high.
“It doesn’t make sense to have a program that was designed 20 years ago in today’s marketplace,” said Councilman Ken Genser. “This is money that has already been collected, it’s not a new tax. The question is, does the money sit in the bank or does it help people get housing?”
“It doesn’t make sense to have a program that was designed 20 years ago in today’s marketplace. This is money that has already been collected, it’s not a new tax. The question is, does the money sit in the bank or does it help people get housing?” — — KEN GENSER Santa Monica City Councilman
But critics say the city’s loan program is not advertised well, and it’s so complex that it prohibits people from applying for the loans. They say providing the low-interest loans is one of the few remaining ways Santa Monica promotes homeownership.
64B,“This is the only homeownership fund available in Santa Monica to use to purchase a first-time home,” said Peter Tigler, vice president of the Pico Neighborhood Association, and who has advocated for more homeownership incentives. “Really this is just an excuse to raid the fund and end it.”
Tigler said if the fund remains restricted for home buyer incentives, then it will regenerate itself as those loans are paid back. However, he said if the money is used for affordable housing — for which he says the city has other resources — the fund will be lost completely.
“There is a need for affordable rental housing, but there is also a need for homeownership,” Tigler said. “But for whatever reason, that doesn’t materialize in this city.”
However, Genser said the city has streamlined the loan process and still there were few applicants. He said housing prices have gone up across the board in Santa Monica, and units that were converted under TORCA are no longer as affordable as they once were.
Coupled with historically low interest rates, he said there is likely to be a continued small need for the program.
“Santa Monica is a place with expensive real estate so it s difficult to have affordable home buying opportunities,” he said.
-- Ken Genser, Santa Monica City Councilman
Originally published in the Santa Monica Daily Press print edition on November 4, 2002. Read the original PDF.