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HOUSING SCANDAL REDUX


by Martha Sadler

Two county supervisors declared publicly that they want out of the affordable homeownership business, following fresh revelations from the audit of the inclusionary housing program, which allows less affluent county residents to buy homes at rates far below market. The housing in question consists of condo units offered by developers to private buyers at affordable prices in exchange for the county’s granting of increased density or other benefits. The proximate cause of despair on the part of 4th District Supervisor Joni Gray and 3rd District Supervisor Brooks Firestone was news that at least a few owners had taken out mortgages based on the market value of the homes. In the case of at least nine homes, the owners defaulted, and banks sold the homes at market rates, taking the units out of the program. The mortgage headaches come atop the county auditor’s mid-May estimate that as many as a quarter of the program’s 400 beneficiaries were using the homes to provide them with rental income while they lived elsewhere — and waited for the time period to expire after which they could sell the home at market rate.

Deputy County Executive Officer Ron Cortez, overseeing an executive task force examining the program, tried to reassure the board that the problems were not insurmountable. The county has been looking to the City of Santa Barbara, whose affordable homeownership program is considered well organized and tightly monitored even by the county program’s harshest critics. As some 240 new homes, mostly in the North County, are about to enter the system, the task force has so far succeeded in streamlining an application process that was both onerous and full of holes. It is also working on a monitoring and enforcement system — which was completely lacking — as well as standardizing the deed restrictions, criticized by at least one program participant as being unclear. The task force is drafting an ordinance to give the county right of first refusal to buy homes when the lender forecloses. As the audit continues, the task force has referred three cases to the District Attorney’s office, although Cortez emphasized that the executive office is committed to taking a “positive, educational approach.” The inclusionary housing program’s most recent chief was Ed Moses, who officially stepped down Tuesday to take a new job as CEO of the Housing Authority of the City of Ventura after three years as head of Housing and Community Development for Santa Barbara County. In bidding him goodbye, the supervisors made it clear they did not hold him responsible for problems that stretch back to the program’s inception in 1981.



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