Santa Barbara Housing Trust Getting Close for State’s Matching Funds

New Affordable Housing Projects Could Be Built If State Approves

The City of Santa Barbara’s Finance Committee listens to Veronica Garcia, chief real estate officer of People’s Self-Help Housing, present on the Carrillo Street affordable housing development at its September 10 meeting. | Credit: Christina McDermott

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On Tuesday, the Santa Barbara City Council voted unanimously to authorize an application from the city’s Local Housing Trust Fund for matched funding from the state. If successful, the match would double the trust’s existing $2.9 million and help finance affordable housing developments on Hope Avenue and Carrillo Street. Currently, the projects are slated for completion in 2027 and 2030, respectively.

Laura Dubbels, the city’s Housing and Human Services Manager, told the council that together the housing projects would provide more than 100 new affordable units for people who make 60 percent or less of the area’s median income.

“Over half of the units proposed will be restricted even further to extremely low income,” she said, adding that “each of these projects will [also] set aside units for special needs housing, a critically underserved population.”

The match money comes from the California Department of Housing and Community Development, which funds local and regional housing trusts to help communities build and preserve affordable housing, transitional housing, and emergency shelters. In July, the department announced that this year, it would offer $53 million to local housing trusts around the state that apply.

Dubbels said that 15 percent of that $53 million is reserved for new local housing trusts — a benefit for Santa Barbara, which established its trust in January.

The matched sum will round out to approximately $5.5 million after administration fees, according to Dubbels. It is a fraction of what’s needed to construct the two projects. The 15 South Hope Avenue project, developed by the Housing Authority of the City of Santa Barbara, is estimated to cost about $41 million while the project on Carrillo Street, proposed by the nonprofit People’s Self-Help Housing, is budgeted for about $55 million.

But Rob Fredericks, the executive director of the Housing Authority of the City of Santa Barbara, said that local support is important because it makes low-income housing developers more competitive for the federal low-income tax credit. This credit program, administered by each state, awards developers federal tax breaks for building low-income housing.

“It all starts with that local funding,” he said. “If you don’t have that local funding, that development is not going to happen.”

Fredericks said that with the $1.45 million the city has given to the project (half of the trust before the possible match), the project can now pursue an approximately $21 million tax credit.

Financing the Hope Avenue and Carrillo Street developments will deplete the trust. At the meeting, Councilmember Kristen Sneddon said that while she was excited to authorize this application, the council also needed to consider how to find a permanent funding source for the trust.

The state’s awards will be announced this December.