Last October, the city created the Housing, Opportunities, Preservation and Equity (HOPE) Fund and set aside $2.8 million.
For the past seven months, the City Council, city staff and members of the public have gone back and forth on how to proceed.
Some people want the money to be set aside in a housing trust fund, with the dollars restricted to affordable housing. A trust fund would make the city eligible for funding from the State of California.
Others have suggested a public-private partnership in which the city could partner with developers and developers could apply for funds. But under that type of scenario, affordability restrictions and covenant lengths would vary.
Councilwoman Kristen Sneddon pushed heavily for the city to create a trust fund at a recent workshop on the topic.
“I think we are all in agreement that housing is a necessary human right,” she said.
She said creating an affordable housing trust fund would establish credibility with the community with a dedicated funding stream to assist those most in need.
Santa Barbara, like most coastal communities, is struggling with a housing shortage and jobs-housing imbalance.
About 15,000 people commute in and out of Santa Barbara from the North County and Ventura County, with those coming from the latter having to deal with choking gridlock on Highway 101 that is exacerbated by freeway widening projects in Montecito and north of Ventura.
Elected officials for decades have talked about the need to build affordable housing for low-income workers, and most recently for the “missing middle,” those who don’t qualify for government subsidies but still can’t afford to buy a home in Santa Barbara.
The city in 2014 approved the average unit-sized density incentive program, which allowed developers greater density. However, most of that housing has been rented at market-rate levels, which is still out of reach for most.
According to data from the city, the median rent in Santa Barbara is $3,475 for a two-bedroom apartment, $3,500 for a three-bedroom and $6,600 for a four-bedroom.
To afford a two-bedroom apartment in Santa Barbara, a family would have to earn about $139,000 a year to qualify, according to the city.
In March, the median price of a house in Santa Barbara was $2.1 million. The median income for a family of four in Santa Barbara is about $100,100, according to statistics the city showed at the meeting.
The Housing Authority of the City of Santa Barbara has a strong record of building affordable housing.
Skip Szymanski, deputy executive director and chief operating officer for the agency, said the money should go to the Housing Authority and other affordable housing developers.
“We do affordable housing,” he said. “We know affordable housing.”
Szymanski said he doesn’t want to see a scenario in which anyone can apply for the money to build housing unless it is specifically for below-market rents for permanent affordable housing.
“Our intent is to ensure that there is a fund and, hopefully, it will lead to a future fund that will have an ongoing amount allocated to affordable housing,” he said.
“Do we have the right to, say there are abandoned properties or blighted properties, do we have the right to use eminent domain to acquire those properties?” he asked.
City Attorney Sarah Knecht said eminent domain can be used to acquire private property for a public use, but that does not apply to affordable housing, and the city would have to pay just compensation for it anyway.
Gutierrez also noted that the city owns land that it could sell and then use the proceeds to build affordable housing.
“So things like the golf course, just for example, I am just talking out loud, the golf course, or, correct me if I am wrong, we also own the land to Paseo Nuevo, but not the buildings,” he said.
In response, Knecht explained that land banking is a good strategy, but that it usually involves banking vacant land.
“This fund could be used for property acquisition for land banking,” she said.
Gutierrez followed up with further explanation.
“I am just trying to figure out how we can use the land we do own to generate the money to buy those to build on,” he said.
The ordinance committee will tackle the issue again later this month.