Housing Authority’s proposal to build a four-story development near downtown receives unanimous support

by Joshua Molina, Noozhawk Staff Writer
August 12, 2023 | 10:35 pm

West Carrillo Street housing project rendering.

The 63-unit housing project proposed for 400 W. Carrillo St. was approved by the Santa Barbara Planning Commission on Thursday. (Courtesy rendering)

Some housing projects in Santa Barbara are controversial, but not this one.

A proposal by the Housing Authority of the City of Santa Barbara to build a four-story, 63-unit housing project near downtown Santa Barbara won 6-0 approval Thursday from the city Planning Commission.

“We haven’t had any negative comments on this project from any community member,” Commissioner Lesley Wiscomb said, “and that’s really rare.”

The project at 400 W. Carrillo St. would be 100% rent-restricted, a break from the array of market-rate apartment buildings approved during the past few years in the city.

The units would be offered to moderate-income families earning between 80% and 120% of the area median income and middle-income affordable renters earning between 120% and 160% of the AMI.

The area median income is about $101,000. The project would include 39 one-bedroom units, 19 studios and five two-bedroom units.

The site is used as a downtown commuter lot and is covered by a canopy of trees. The project calls for the removal of eight king palms, one jacaranda and 15 tipu trees.

City leaders have backed the project because it is run by the Housing Authority, which has a record of managing affordable housing projects successfully for decades. It has acquired or developed more than 1,500 units in Santa Barbara and distributed more than 3,000 Section 8 vouchers.

Traditional affordable housing projects for low-income individuals quality for government tax incentives, grants and loans, but there is no dedicated funding mechanism for projects that serve middle-income workers.

This project aims to help people who earn too much to qualify for low-income affordable housing, but don’t earn enough to qualify for a loan to buy a home.

“This will help us with what we call the missing middle,” Commissioner Donald DeLuccio said. “The key here is that it is income-restricted.”

Dale Fathe-Aazam, director of real estate and technology for the Housing Authority, said government funding systems don’t exist for middle-income workers, so the Housing Authority had to get creative.

“There is no established financing vehicle for missing-middle housing,” Fathe-Aazam said. “We had to turn over a lot of stones to try and solve this riddle.”

He said the Housing Authority has found a “private, altruistic investor” who is willing to accept a “reduced yield of 5% for a community benefit project.”

It’s not the first version of the project. In July 2020, the Housing Authority proposed 103 units, but it was rejected by community members because of the size and lack of parking.

“We have a good opportunity here to probably do more,” Commissioner John Baucke said. “Unfortunately, the neighborhood didn’t quite respond to your prior project back in July of 2020. I would have preferred a more intense project than the one you are doing, but I understand why you are here with this project.”

Notwithstanding the original project, the commissioners strongly supported the current project, with Devon Wardlow absent. The official vote was to state that the project was exempt from the California Environmental Quality Act. Next, it goes to the Santa Barbara City Council.

“This is clearly the kind of housing we need,” Commissioner Sheila Lodge said. “I am fully supportive of it.”