City of Santa Barbara to Loan School District $1M for Employee Housing at Former Parma School Site

The City of Santa Barbara is loaning $1 million to the city’s Housing Authority to help build employee housing for the Santa Barbara Unified School District.

Thanks to the loan, approved by the Santa Barbara Finance Committee on Tuesday and now headed to the City Council for final approval next week, the district and the city’s Housing Authority can develop 30 units for district employees. 

Where will it go? The site of the former Lawrence M. Parma School at 915 East Montecito Street, which closed in 1989. It operated as a children’s center for a few years following the school’s closure, but has since sat vacant. 

Maintaining a vacant building is a waste of land, time, and money for the district, Superintendent Hilda Maldonado said at the project’s first community meeting in 2024. 

The project is several years in the making, involving much planning by the district and its school board. Santa Barbara’s increasing rents, and teachers’ hardships shared during previous contract negotiations, have especially brought the need for workforce housing to the forefront. 

The city’s loan will buttress the development of 30 units for teachers and staff. Split between a “three- and four-story apartment building” will be 10 one-bedroom units, 12 two-bedroom units, eight three-bedroom units, and a community space, according to the city staff report.

When the district did surveys of school staff in the past, they found that more than 50 percent were low-income or very-low income; and the biggest need for housing came from smaller households, rather than large families.  

Units will be designated for low-income employees, making between 30 to 60 percent of the area median income. Per the conditions of the loan, the development must maintain these affordability restrictions for 90 years, expiring in 2116. The loan, which comes from the HOME Entitlement and Program Income Funds left over from prior years, includes a 30-year term with a 3 percent interest rate.

According to city documents, the project is currently making its way through the permitting process, with construction expected to be completed by May 2029. 

While neighbors of the site — located across the street from Trader Joe’s on Milpas — have expressed concerns, such as impacts to traffic and street parking, the city’s Housing Authority — who will be the de facto landlords — told the community it takes pride in being “good neighbors.” Although not required for affordable units, it does plan to include 40 parking spaces. A traffic analysis will also be conducted. 

The project was met with much optimism from councilmembers.  

Councilmember Wendy Santamaria said that this is the type of project councilmembers want to see. “We have so many of our teachers and educators and other education staff that just cannot live anywhere near the schools that they are serving and the children they’re educating,” she said. 

An ordinance to approve the loan is on next week’s consent agenda for the Santa Barbara City Council. 

“We are deeply grateful to the City of Santa Barbara for supporting our educators who take care of our children every day,” said Superintendent Maldonado in a statement.

“Housing affordability is one of the greatest challenges facing our staff. Through this approval to develop workforce housing at the Parma site, the City is taking care of our educators who deeply deserve to be valued.”