On Tuesday, August 19, Santa Barbara City Council voted 5-1 to loan an additional $3.5 million to the Jacaranda Court apartment project at the corner of Castillo andCarrillo. Mayor Randy Rowse was the dissenting vote, questioning why the city should loan money to a project when the city has already donated the land valued at $7.5 million, and has not presented a way to replenish its reserves.
The Jacaranda Court project was first proposed in 2019 to create 103 units of housing for the “missing middle,” meaning households in the 80-120 percent range of the then median income. Since then, the city Housing Authority has had to reduce the units to 63 as costs keep rising.
The well-regarded agency, even by Rowse, who noted he’d never voted against a request from the nonprofit before, had first sought funding from a private apartment fund manager. Housing Authority’s Rob Fredericks explained that what had been an altruistic yield of 5 percent for the fund manager became untenable recently. More money could be made from risk-free government bonds after interest rates increased, and the fund manager backed out amicably from the Jacaranda Court project.
Housing is one of the biggest issues in Santa Barbara, both for its scarcity and extreme cost compared to wages. Estimates since the pandemic have put the cost to build one unit in a multi-unit apartment building from $500,000 to as high as $712,086 for Jacaranda Court.
The estimated total project cost of $44.8 million will come from loans ($24.3m), Housing Authority reserves ($8m), bonds ($2.2m), a grant, and now the city. Though the city’s loan is for 30 years at 3 percent, payment only begins once the net income of the project can sustain it.
The housing itself now stands at 21 studios, 37 one-bedrooms, and five two-bedrooms. Among these apartments will be seven for low-income residents, 55 for moderate-income, and one for a manager; of those, six are for residents with mobility, hearing, or visual needs. If all goes well, ground-breaking could be as early as this November, looking to completion in mid-2027, said Fredericks.
Low-income in Santa Barbara County is pegged at $98,850 for a single person and moderate at $100,050, though the Housing Authority targets potential tenants earning a percentage of that sum, starting at around 30 percent. Recent federal cuts to housing funding means no new money for the Section 8 program, Fredericks has said, creating uncertainty for anyone on the waiting list.
