Condominium ownership at a future $23.9-million low-income housing development off Cloverfield Boulevard and the 10 freeway is no longer an option.
Instead, the 45, three-bedroom units at High Place East will more likely be available to rent, dashing the hopes of aspiring first-time home buyers in the depressed Pico neighborhood but pleasing others who see the need for more reasonably priced housing in Santa Monica's pricey rental market.
The City Council voted unanimously Tuesday night to back the project as rentals and gave its stamp of approval for the developers to apply for up to $18 million in tax-exempt bonds from the California Statewide Communities Development Authority.
Nonprofit Community Corp. of Santa Monica said it was unable to find lenders willing to back the project's construction because, reportedly, they were doubtful that buyers—in this case, families of four earning less than $65,500 annually—would be able to secure mortgages that would ensure the eventual sale of the condos.
There could be, however, financing available through the California Statewide Communities Development Authority, a public agency offering tax-exempt financing programs for so-called affordable rental housing.
"That banks are unwilling to lend for this kind of housing is outrageous.... They seem to have lent for every other form of housing,” Councilman Bobby Shriver said. “It would have been nice if the banks stepped up and enabled people to develop equity in these types of houses.”
High Place East was approved by the city in 2005. It will occupy nearly one acre of land and is part of a larger development that also includes High Place West, another so-called affordable rental project with 47 units.
The projects were born out of community meetings in the Pico neighborhood hosted by the Community Corp. of Santa Monica in 2003. At the forums, residents said they wanted to see affordable homes built and targeted to first-time buyers.
The city has approved subsidizing High Place East to the tune of $13 million. City staffers said Tuesday that the city will not issue the bonds it approved Tuesday night. Additionally, it will not be responsible for their repayment.
“We have an opportunity … to get built very much needed multi-bedroom affordable housing,” said Councilman Kevin McKeown.
City Council members Pam O’Connor and Robert Holbrook were absent from the meeting.