Santa Barbara City Council Grants $6M Loan to Convert Hotel to Housing

The Santa Barbara City Council showed unwavering support for a hotel-to-housing development proposed by the city Housing Authority, unanimously granting a $6 million loan to help complete the purchase of the Quality Inn on De la Vina Street to convert the 34 rooms into studio apartments specifically set aside for extremely low-income residents who are struggling with homelessness.

The entire project will cost a total of $13 million, including $9.45 million for the purchase of the property, $3.05 million in renovation costs, and a half a million dollars in other site work. Residents of all 32 studio units will be eligible for Section 8 rental assistance, and the property will have a 90-year affordability covenant to ensure that it will be used exclusively for those who make less than 30 percent of the area median income (households making less than $32,190 a year).

Laura Dubbels, the city’s housing and human services manager, explained that the proposal was part of a joint funding effort between the city, the Housing Authority, and the Santa Barbara Foundation. The Housing Authority agreed to contribute at least $5 million if the Santa Barbara Foundation put in $2 million, and the city closed the gap with the final $6 million loan from its affordable housing fund reserves.

The proposal earned the support of every member of the council, despite concerns from residents who lived near the property, who worried that a project geared toward extremely low-income residents would bring along the undesirable elements of drug abuse and crime similar to another city project at the Rose Garden Inn — a motel the city temporarily rented out as an emergency shelter for homeless individuals sleeping in wildfire-prone areas in 2021.

Councilmember Eric Friedman, who had the Rose Garden Inn experiment in his home district, said that this hotel conversion was a completely different proposal compared to the temporary homeless motel shelter. This property would be owned and operated by the Housing Authority, which has already proved itself with similar projects such as Vera Cruz Village, and the plans include an on-site manager who will occupy a one-bedroom unit on the property.

“If I thought this was the Rose Garden Inn for Samarkand, I wouldn’t support it,” Friedman said.

Friedman also pointed out the all-too-real risk of the Housing Authority missing its opportunity to purchase the property and another developer scooping up the hotel to build something far worse for the neighborhood.

“If it doesn’t go forward here, the property owner already put it up for sale,” Friedman said. “They want to unload this property; they want to sell it. And if we had a private outside entity purchase the property there is a significant risk that we could have a project that is completely incompatible with the Samarkand community.”

Councilmember Kristen Sneddon was also in full support of the project, and said that she was glad that the Housing Authority was continuing to offer developments that are “centered on dignity and quality.” 

“I really appreciate that your projects aren’t pushed out to the fringes of our community, but they are front and center,” she said.

With the unanimous approval, the city will grant the $6 million dollar loan for the project — which will come from the city’s $15 million affordable housing reserve fund — for a term of 30 years.