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.