The Push for $5 Million in Santa Barbara’s Local Housing Trust Fund

Advocates Urge City to Find Way to Increase Contribution to Affordable Housing Fund

CLUE board member Rich Appelbaum spoke in support of increasing the amount of money available in the Local Housing Trust Fund. | Credit: Courtesy

As the City of Santa Barbara looks ahead to the upcoming budget deliberations, housing advocates and nonprofit organizations are urging the City Council to find a way to increase contributions to the Local Housing Trust Fund to a base level of at least $5 million for the next two fiscal years — an amount that experts say is the minimum needed to be competitive for state matching funds and grants.

Representatives from CLUE (Clergy and Laity United for Economic Justice), League of Women Voters of Santa Barbara County, and the city Housing Authority are among those pushing the city to meet the “magic number” of $5 million. They have been sending letters to City Hall and speaking during City Council budget presentations, urging the city to change the current plan to contribute $1.5 million to the fund.

Lizzie Rodriguez, a member of CLUE’s Housing and Homeless Justice Workgroup, said that the team has put “countless hours” looking into the issue, which led to their findings and recommendations on how the city could increase funding for affordable housing.

“We’re not just a group of sympathetic people who are asking you or demanding you for money to be allocated in a certain fund,” Rodriguez said during a May 6 budget hearing. “We’re a group of informed professionals that have rolled up our sleeves and worked alongside our city staff trying to figure out where to find the money.”

Money from the Local Housing Trust Fund can be leveraged at an eight-to-one ratio, meaning the Housing Authority can take $5 million and turn it into as much as $40 million through matching grants, tax credits, or other sources. But having less than $5 million can close the door to some of these options, as was the case with the low-income housing development proposed for 15 South Hope Avenue, which remains unfunded because, while the city allocated $1.4 million through the trust fund, that was not enough to successfully compete for tax credits, according to CLUE boardmember Richard Appelbaum.

“Five million dollars might have done the deal,” Appelbaum said.

Housing advocates admit that even $5 million annually would not be enough to close the gap between the need for affordable housing and actual housing production. Over the past five years, 87 percent of newly built units were for market rate, while the county is still far behind on production of low- and very-low-income units. “It’s a drop in the bucket as far as our regional housing needs,” he said.

Meanwhile, a workforce housing study found that 70 percent of county workers are now considered “low income” (making less than $98,850 a year) and more than half are considered “very low income” (making less than $61,800).

“These are the people who play a vital role in our city,” Appelbaum said. “They care for our children. They clean our hotels. They serve our food. They staff our schools. And they often work at underpaid city jobs. That is not right.”

Another factor is the uncertainty of federal funding going forward. Housing Authority Executive Director Rob Fredericks said the Trump administration’s “skinny budget” proposal could endanger community grants, rental assistance, and housing funds, threatening the housing stability for as many as 500 local households. Without these federal dollars, he said, the city housing fund becomes even more vital.

“We can’t count on federal program support right now,” Fredericks said. “We must act locally.”

There are a few paths to the $5 million in funding. Currently, the Local Housing Trust Fund is set to receive about 10 percent of the expected revenues from the newly approved Measure I sales tax, amounting to $1.5 million a year. Housing advocates suggest increasing that number to at least a third (between 30 to 35 percent) of the Measure I funds, a proportion they say would align with the City Council’s stated priorities for the money.

The city could also look into other revenue sources, taxes, or consider adjusting the reserve policy to free up a small percentage of funds to be used for the Local Housing Trust Fund.

At least three city councilmembers have expressed support for meeting the housing fund target.

“I don’t really want to micromanage suggestions on how to do it. I just really firmly believe that we can put $5 million into the Local Housing Trust Fund,” Councilmember Kristin Sneddon said. “I think we have enough time between now and our deliberations to see if it is there.”

Councilmember Meagan Harmon is also in support, though she acknowledged there were still significant considerations to be made about the impacts of adjusting the budget with very little wiggle room. “We’ve got to figure out where the money’s going to come from,” she said. “We’re already doing so much with so little.”

Mayor Randy Rowse said that everybody on the council wanted affordable housing, but there had to be some “reality checks” about how to get there. “That affordable housing trust fund is there to help attract philanthropic money too,” Mayor Rowse said. “We want to fund everything, but it’s pretty clear we can’t. There’s no pot of gold at the end of the rainbow. There’s no money sack in a closet somewhere.”

The City Council will continue with budget priority settings on June 3.