Affordable housing production in Santa Monica. Challenges and opportunities. Tara Barauskas, Executive Director Community Corp of Santa Monica

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1 Affordable housing production in Santa Monica Challenges and opportunities Tara Barauskas, Executive Director Community Corp of Santa Monica

2 Community Corporation of Santa Monica Established in 1982 Over 1,700 units of AH in Santa Monica, over 4,000 people served Vertically integrated-property Management, Services, Development Variety of product types-new construction, rehab Close to 6,000 people on waiting list

3 Rehabilitated properties and new construction

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5 Developing in SM todaychallenges and opportunities Property acquisition challenges Scarcity, expense of sites Many sites have people living in them, don t want to relocate Highly competitive, requires short timeframes and cash offers Landmarks process can take time and pose risk Cost to acquire existing buildings to rehab approx $450K-$650K per unit (just acq)

6 Property acquisition challenges Scarcity, expense of sites Address List Price Sale Price Units Land $/unit Sold Grand View Blvd, W.LA $5.6M $5.7M 50 $112K Yes Lincoln Blvd, SM $5.8M Not sold 36 $161K No Downtown (two lots), SM $12.25M Not sold 75 $163K No Michigan Ave, SM $6.6M $6.62M 38 $175K Yes 14 th Street, SM $7.8M $7.8M 39 $200K Yes 6 th Street (one lot), SM $6M Pending 30 $200K No Venice lots $7.6M Not sold 36 $211K No The Arroyo $16.4M $16.4M 64 $256K Yes

7 Developing in SM today-challenges and opportunities (cont) Property acquisition opportunities City-owned land (purchase or lease) Adaptive reuse/redeveloping sites with other uses More nimble acquisition fund or process could help

8 Developing in SM today-challenges and opportunities (Cont) Project design and land use challenges Infill sites with parking onsite are expensive Architectural bells and whistles are expensive City code requirements can add cost Building permit process is lengthy Zoning in many areas is a limitation; could build more units with higher density/far allowed Parking requirements drive cost and reduce number of units developed

9 Developing in SM today-challenges and opportunities (Cont) Project design and land use opportunities Administrative approval is a significant tool in developing AH; could be enhanced further Could look at density and parking requirements on commercial corridors or near transit Could look at streamlining Landmarks and ARB processing for 100% AH projects Could look at less traditional/more innovative housing types to reduce costs-modular, ADU etc

10 Developing in SM today-challenges and opportunities (Cont) Financing challenges Projects developed are governed by funding regulations-ahpp (Unit sizes, rents), TCAC (deadlines, requirements), City requirements (timelines, limited funding) TCAC funding is very competitive, we compete with all LA County projects; tiebreaker competition Not many other funding sources to leverage All funding sources value cost efficiency and local matching resources Consultants and contractors don t give discount to AH; we pay market. Some fees are aived, others not (permit fees); around $15K/unit Prevailing wage adds 15-30% cost Resources for services funding (special needs)

11 Past Projects-costs High Place East, Completed June 2014 Address: 2401 Virginia Ave. Units: 44 Total Cost: $23,944,782 Price/unit: $544,199 Parking: Subterranean High Place West, Completed November 2012 Address: 2345 Virginia Ave. Units: 47 Total Cost: $23,605,039 Price/unit: $502,234 Parking: Subterranean 2602 Broadway, Completed October, 2012 Address: 2602 Broadway Units: 33 Total Cost: $19,567,593 Price/unit: $592,957 Parking: Subterranean 2802 Pico, Completed June 2013 Address: 2802 Pico Blvd. Units: 33 Total Cost: $20,080,701 Price/unit: $608,506 Parking: Subterranean

12 Developing in SM today-challenges and opportunities (Cont) Financing/development opportunities Additional funding resources, timing, reduction of cost Additional county funding for services and rental subsidies Streamline permit and construction processes Could review prevailing wage requirement or create alternative

13 Developing in SM today-challenges and opportunities (Cont) Other challenges and opportunities Community doesn t always embrace AH in their community; also issues with density, height and parking. Associated issues with market rate development. Can work to build more supporters for the mission; some already exist AHPP program is a great tool, could be further refined. Onsite versus offsite options.

14 LIHTC funding basics Two programs 9% and 4% Two rounds a year Must have ALL entitlements and approvals except building permit to apply (burden to developer) Highly competitive-precision is critical Likely only 1 9% projects a year would get allocated in SM

15 9% projects must pick a housing type and set-aside at application Housing Types Large Family (65% goal) Special Needs (25% goal) SRO (typically overlaps) At-Risk (typically overlaps) Seniors (15% goal) (for 62+) Setasides Nonprofit (homeless priority with certain funding-must be 50% homeless) Rural At-risk Special needs/sro

16 Questions?