Family units would cost about $200K
DOWNTOWN — A $200,000 condominium in Santa Monica may soon not be as far-fetched a concept as it seems.
One of the biggest landlords in Santa Monica is considering branching out of the rental business to sell two-and three-bedroom condos for less than half of what the market rate is.
But there’s a catch. Buyers would have to fall into the “moderate income” category — $45,000 to $60,000 a year, per household. They also would be required to keep resale prices relatively low if they decided to put their condos back on the market.
Details are still being worked out, but already officials have eyed possible sites in the Pico neighborhood, which is located on the eastside of Santa Monica, as well as in other areas of the city.
Joan Ling, executive director of the Community Corp. of Santa Monica, which would spearhead the project, said she was encouraged by survey results returned Tuesday that show ample interest among workers at the local school district, St. John’s Hospital and among members of three Pico neighborhood churches.
“Now we’re really starting to think about how and where and what,” said Ling, whose group oversees more than 2,400 units on 78 properties throughout Santa Monica.
It’s not yet clear how pricing would be set for owners of the condos who later chose to sell. Ling said the resale price would probably be based in some way on the current median income at the time of the sale.
About $100,000 in subsidies from the federal, state and local government would be needed for each condo in order for CCSM to sell them below market rates, Ling estimated. She planned to sit down with staffers today to analyze the survey, and discuss what form the project might take.
Ling also must determine how exactly to fund the condo project, and then apply for the money. CCSM is supported by a combination of grants and subsidies from federal, state and local governments. But finding additional money for the ownership program may be difficult, because all levels of government are suffering from severe budget deficits.
Those surveyed by CCSM were asked their income, household size, if they have children, their current housing costs, whether they currently rent or own, and if they were interested in the concept, Ling said. Nearly half of the 2,000 households surveyed said they were interested.
“To us, that’s substantial, because it’s not like we’re going to build that many units,” Ling said. “But to know that half the people we approached would be interested in this concept — that’s a really good percentage.”
Asked why low-income households wouldn’t be included, Ling said those in that group typically live paycheck to pay-check, and therefore have difficulty being approved for mortgages. She added low-income earners are in constant danger of missing a payment if one person loses their job, however briefly. Plus, most of the government funding is available just for renter programs, something CCSM will still continue to champion.
“We are not shifting our major focus, commitment away from very low-income rental housing,” Ling said. “It’s just that we want to try something different, because we know the teachers and the classified workers in the district, let’s say, are priced out of being here. This is an experiment. It’s not necessarily a change in direction.”
The idea is sure to be met with mixed reviews in City Hall, where some leaders have criticized previous affordable housing projects because they serve residents outside of the city.
“I don’t think I have any obligation to provide housing to anyone who presently lives in Culver City, but works in Santa Monica,” said City Councilman Bob Holbrook. “If it were a Santa Monica senior, that’d be different.”
Holbrook said Santa Monica has built more affordable housing than surrounding communities, but it hasn’t eased the financial burden on local residents.
Other politicians said they’d support the concept of the plan if it makes sound economical sense.
“Are we getting a reasonable bang for our buck?” asked City Councilman Ken Genser. “In other words, how does the amount of public money that goes into the for sale units compare to the amount of money that goes into the for rent units? If it’s similar, than I’d say it’d be fine. If it’s not, then I’d say it might not be the best use of funds.”
Originally published in the Santa Monica Daily Press print edition on April 22, 2004. Read the original PDF.