City of Santa Monica to Demolish a House of God to Build Unaffordable Housing

2/28/19 This month, Community Corp. of Santa Monica was awarded a $10.7 million-dollar 'loan' from the Santa Monica Housing Trust Fund to acquire property at 1819 Pico Boulevard, across the street from Santa Monica College. Currently, two 2-story apartment buildings and a church occupy the property. The church, formerly housing the Mount Hermon Baptist congregation, has been there since 1967. A demolition sign is now posted on the iron fence surrounding its parking lot.

Community Corp. is a private non-profit company that buys and operates "affordable" residential units in Santa Monica. They currently operate 1,719 below-market-rate units and have a waiting list.

The current loan to CCSM comes from the city's Housing Division's Housing Trust Fund. This is money derived from redevelopment loan repayments and from the Measure GS/GSH sales tax approved by voters in 2016.

The $10.7 million is to go toward acquisition of the property, design, engineering, and site work. Once CCSM gets through the necessary approvals, including two community meetings, a further "permanent city loan" of an additional $12.1 million will be awarded. This brings the city's financial involvement in the property to $22,803, 280.

Proposed on the project is 48 units. So the cost to the city per unit will be $475,068. But CCSM anticipates they will need more money than that to produce these affordable units, and intend to use low-income housing credits from the state of California and bank loans. According to the Housing Trust Fund, the total projected development cost is $35,004,723 or $729,265 per residence.

If CCSM were a for-profit company, this project would not have gotten off the ground. At over $700k per unit just in raw cost, the units would have to be sold or rented at a rate above that of comparable units in the neighborhood. As it is, the units are intended for people who earn between 80 to 30 percent average median income - or less.

So we are wondering what kind of "loan" the city is giving CCSM. The terms of repayment of this "loan" are not discussed on the website that gives criteria for awarding the "loan." It looks very much as if this could not possibly be a loan at all, but rather a grant. It looks as though the City of Santa Monica (on a regular basis) grants money to CCSM to build additional "affordable" housing.

In addition to the wobbly definition of "loan" here, we notice that the Housing Trust Fund informs us in bold writing on their website that "Currently the only applications being accepted for Housing Trust Fund loans are for developments which will serve persons living with disabilities or persons experiencing homelessness."

But the project at 1819 Pico is not going to be built for persons with disabilities, nor are any of the units specified as available only to those experiencing homelessness. On the contrary, 15 of the units are intended for low-income households (51-80 percent AMI). Another 22 units are for very low-income levels (31-50 percent AMI), and only 11 of them are for extremely low-income levels (30 percent AMI). Since many people in Santa Monica are going to be below area median income (since a median means some are above and some are below), quite a few residents who are not experiencing homelessness would theoretically be eligible for units in this project. Nowhere in the merits cited by the Housing Trust Fund for the loan to CCSM do they mention that CCSM intends to limit potential residents to those now living on the street.

So why was this "loan" given? Does the Housing Trust Fund transgress their own stated criteria - so long as the recipient is CCSM?

Regarding a different housing project CCSM is to build on 14th Street near Pico, the SM City Council rebuked CCSM for using its own criteria, rather than the City's, for placing tenants in affordable units. The City puts first on their list people who've been evicted from their residences in the city or those of the poor who live or work in Santa Monica. Apparently, CCSM does not use the same priorities.

The fundamental question, however, is what purpose is served by the city government subsidizing people living in this beach city who can't afford market-rate housing. Such government-funded housing does nothing to relieve the crisis of substance-addicted and mentally ill individuals who inhabit and roam the public (and private) areas of the city. Such individuals would not qualify to live in affordable housing, and if they did, they would drive everyone else away by making the property unsafe.

So who profits?