How to: Buy a Home in Santa Barbara

A Guide for the Less Than Affluent


I confess: I am not a homeowner. During my quarter century in Santa Barbara as a student, desk clerk, gardener, cashier, tutor, and journalist, I have rented. Breathtaking lack of foresight, some of you might be thinking. Perfect example of social Darwinism and the wisdom of the marketplace. Time to move on down the road to Ventura along with the rest of the South County’s workforce.

CoverStoryGraphic.jpgYou can forget that idea. If my next domicile is a shopping cart, I’m staying right here. Many of my dearest friends — a number of whom have rented rooms to me — had the wherewithal to purchase homes here years ago. I hope that most of them will be hanging around until death do them part from Santa Barbara; and I’m hanging with them. Home is where the tribe is. I’m not going anywhere. I hope you find that reassuring.

CoverStoryGraphic.jpgFortunately, rents are not nearly as inflated as selling prices presently. I found a small one-bedroom apartment in an old Victorian for just under $1,000 a month, and my wonderful landlords recently took the initiative to reduce that by $50 a month. Nonetheless, for obvious reasons — because you get more than a cleaning deposit back at the end, and because every time they make repairs to my rental I suspect they are preparing to turn it into a bed-and-breakfast — I’d rather be paying a mortgage.

Happily, government-assisted affordable housing is not just for the poor anymore. Certainly not in Santa Barbara, where — with the median home price hovering at $1.2 million — the City Council last week saw fit to create an “affordable” housing project for couples earning $160,000 a year. Certain restrictions, however, apply to homes purchased through such programs. Generally, the owner cannot resell the house at market rate until they have owned and occupied the house for a specified number of years. Also, the home must be owner-occupied, not rented out. I’m okay with that.

Yet I have hesitated to enter the lotteries for affordable homeownership. I like to think of myself, against all reason, as middle-class. But now, even doctors, lawyers, and engineers are in the lottery, so who am I to hold back? Also, while it is not exactly insider information, I came across most of this 4·1·1 in my capacity as a reporter and I thought it somehow more ethical to share the information instead of hoarding it to increase my chances in the lottery. But trust me, the flag drops the moment this paper hits the streets: At noon, when the last copy goes on the last newsstand, I’ll launch into a frenzy of downloading applications and submitting them to the proper authorities, and I suggest you do the same.

Scouring the South County

So how do you get in on the lottery for an affordable house? It depends on where you want to live.

Unincorporated County

CoverStoryGraphic.jpgThe unincorporated county has some 408 units in its Affordable Housing Program. Most of the existing units are in the South County, becoming available if and when their current owner-occupants decide to leave. They range from large, all-affordable housing projects like Oak Grove — the earliest and biggest with 173 units (it was built on county land before the inclusionary and bonus-density programs came into play) — to scatterings of just two or three units within market-rate condo projects.

If owners want to sell before the house is released to the open market, they have to sell it at the affordable rate. Using realtors, classified ads, signage, or word of mouth, they find their own eligible buyer, one who fits into the income category for which the house was intended. As you can imagine, it is not very difficult to find buyers. The potential buyer has to verify her or his eligibility — it’s part of the restrictions on the deed — secure a bank loan, and go through escrow just like anybody else.

Newly built affordable housing stock is different. Buyers are chosen via a lottery. Thanks to recently instituted reforms in the county’s affordable housing program, it is pretty easy to enter the lottery. First, to receive notification when new stock is coming onto the market, contact Susan Everett at the county’s Housing and Community Development Department ( She will personally add your name to the list of about 500 people who want to be notified of upcoming lotteries. Most of the lotteries are for North County homes, of course, because that’s where most of the new housing is being built. The next South County lottery will probably be for two each of low, low-moderate, and upper-moderate units in the Villas at Calle Real, which is now in the planning stages.

The new, streamlined application form for entering the lottery is only one double-sided page. In order to enter, you also have to submit a letter of pre-qualification for a bank loan. Here’s how you get that: Everett gives you the price of the available homes, and based on your income you determine if you are eligible for any of them. If you are, you go to a bank and ask them to help you qualify for a loan. It’s that easy. Yes, you have to re-enter for each lottery.

If you’re one of the lucky winners, or if you are chosen as an alternate in case one of the winners is found to be unqualified, only then do you have to go through the longer process of verifying your eligibility for the housing. In the county, if there are 10 units available, the first 20 people whose names are drawn are put through the more lengthy post-selection verification process. After that, you’re home free, and you can stay as long as you keep up the payments. The number of years before you can resell at market rate varies according to the county’s covenant with the developer, but usually it’s 30 years in the unincorporated county.

You may at this point be feeling a combination of hope and despair because you suspect that there are not very many affordable homes coming onto the market. Here’s a peek at the affordable housing landscape: The county’s inclusionary program applies to residential projects of five or more units — projects with five units must make 30 percent of them affordable. Or, the developer can pay in-lieu fees, which the county can use to build affordable homes offsite. Thanks to the state’s bonus density law, intended to increase California’s housing stock, all developers who include affordable units (or pay the fee) are automatically eligible to increase their market-rate housing by the same number of units.

On the web:

City of Santa Barbara

CoverStoryGraphic.jpgAffordable homeownership in the city has heretofore targeted people of “moderate” income (see chart). Its stock as of February 2005 comprised 254, all for people falling within the moderate range except for five low-income ownership units. The city included the option to purchase in its covenants, so instead of sellers and buyers making their own arrangements, as is done in the county, homes are more frequently sold through public lottery.

The units are located at a couple of dozen different sites in the city. The 46 condos comprising the Franciscan Villas on Greggory Way were all sold to people with moderate incomes, as were the 50 in La Colina Village, and the 17 at El Zoco artists’ colony. There are 22 middle-income homes at La Cumbre Hills. These all came on line when the rolling base was 30 years, and some of them were built a while ago so their long-time owners may soon be able to resell at market rate — meaning they would exit the affordable program. Some of the remainder are part of larger market-rate housing developments — even two units reserved for low-income families at Villa Anapamu, and three at Casa Montecito — built since the city changed its rolling base to 45 years.

With its new inclusionary home­ownership program the city is branching into housing for workers in the middle and upper-middle income brackets. Each municipality has its own trigger point for mandating that a developer include below-market units in his project: The City of Santa Barbara demands that all developments of 10 units or more include 15 percent affordable units or the equivalent in-lieu fee. But remember, whenever a 20-unit development includes three affordable units, the bonus-density law decrees that the developer also gets to build three extra market-rate units. This is a big fat fly in the ointment for slow-growth fans, undercutting political support for inclusionary programs.

Developments now on the drawing board include 23 new units for middle and upper-middle buyers; seven for upper-middle buyers, and two for moderate income buyers. To sign up on the city’s interest list for these units, go to and click on Affordable Housing, then click on Request Form to sign up for the interest list. Or, contact Deirdre Randolph at 564-5461 or

On the web:

Housing Authority Portals

Besides the inclusionary programs, the city’s Housing Authority, which until now has specialized exclusively in affordable rentals, is also branching into affordable homeownership. Its first such project, still in the planning stages, consists of two- and three-bedroom condos, targeted for employees of the community’s nonprofits and other “below market” income workers making up to 240 percent of the median — that’s $160,000 for two people . Slated for the empty lot at the corner of Montecito Street and Calle César Chávez, and dubbed Los Portales, the condos will sell for $600,000 and cannot be resold at market. It is a joint project with Bermant Development Company. The city put zero money into subsidizing this project — unless you count the grant from the Santa Barbara Foundation to buy the property, plus the cost of administering and negotiating the project. The situation is subject to change, but still it can’t hurt to sign up now on the “interest list” by contacting Rob Fredericks at

On the web:

City of Goleta

Because Goleta is such a new city, it is still operating on an interim General Plan. That plan calls for 20 percent inclusionary housing in any new development of 5 units or more. So far, there have been two developments to which this applies, and in both cases developers paid in-lieu fees rather than include below-market units within their projects. The city has not yet decided what to do with that money. Meanwhile, Goleta’s draft General Plan requires that 55 percent of any condominium project along Hollister Avenue be affordable to moderate low- and very low-income buyers. It sounds good, but most affordable housing activists consider Goleta’s 55 percent inclusionary rule a ruse to prevent any new housing development at all. We will examine this question in an upcoming issue.

All other affordable homes in the City of Goleta are still under county jurisdiction, left over from when Goleta was unincorporated.

On the web:

City of Carpinteria

At present, Carpinteria has exactly 14 units, built several years ago. However, Carpinteria’s General Plan requires developments of five or more units to include 12 percent that are affordable to people whose incomes are 120-180 percent of the median. In the 40-unit Lavender Courtyard project under construction, five more will be available to people making between 120 and 200 percent of the area median income. To get on the list for the lottery, call Stephanie Diaz at 684-5405 x415. That housing will have an initial 30-year occupancy requirement that starts again with each new owner until 90 years has elapsed since the initial purchase. Several more inclusionary developments are in the pipeline and expected to begin construction over the next couple of years.

In addition, a development called “Lagunitas,” owned by Investek, is in the approval process now. It is 74 residential units on 25 acres, to be offered to Investek employees for the right of first refusal. The homes would be priced for employees making from 90 percent to 200 percent of median. If they are not filled by employees, they will be offered via lottery to income-eligible city residents, then valley residents.

On the web:


Over the years, bureaucrats have dreamt up clever ways of ensuring that housing is available for the working class, even here in paradise, where almost everyone from gardeners to gynecologists can qualify for some type of affordable housing. But first, you have to learn the language.

Inclusionary Housing: Usually condominiums, for sale at prices significantly below market. They are included in market-rate projects as a condition to getting a building permit.

State Bonus Density Program: California law requiring that a developer be allowed to build extra market-rate units, regardless of the zoning, as a reward for including below-market units in a project.

Affordable Housing: According to state and federal guidelines, housing that costs no more than 30 percent of your monthly gross income.

In-Lieu Fees: Fees developers pay in lieu of including below-market units at their market-rate project site. The city or county government uses the fees to build or subsidize lower-income units at a separate location.

Subsidized Homeownership: Programs whereby local governments pay all or part of the down payment and provide low-interest or deferred payment mortgages, primarily using federal funds. Available in this county only in Lompoc, Santa Maria, Orcutt, and Tanglewood.

Owner-Occupancy Requirement: The rule that says if you win the right to buy an affordable home, you have to live in it. You can’t rent it out and live in Baja.

Rolling Base: The length of time before the owner can resell at market rate. If you sell the home before then, it must be at the affordable rate, and the timer resets at zero for the new owner. Rolling bases range from 10 to 45 years. However, homes exit the affordable program after a maximum of 90 years.

Affordable by Design: A land-use planner’s dream; refers to units that are offered at market rate, but because of their small size or other cost-cutting measures are naturally affordable — a rare-to-mythical occurrence in Santa Barbara.

Critical Workforce: Target population for some proposed affordable housing programs, such as the project to house Cottage Hospital workers on the site of the former St. Francis Hospital. When municipalities or counties speak of housing the critical workforce, they are not talking about me. In bureaucratese, the term refers very specifically to firefighters, police officers, teachers, and nurses.

Lottery: The opportunity to buy below-market inclusionary or density-bonus housing is determined by lot, namely a computer-randomized ranking of numbers assigned to eligible contenders.

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