Housing - Through the Looking Glass
by Lisa Knox Burns, AICP
Senior project manager of the Santa Barbara County Housing Element (1980)

The Price of Paradise
Written, Produced & Directed by
Lisa Snider, Santa Barbara County Housing & Community Development Department (2006)
DVD; 42 minutes

Thirty or more years ago people noticed that Santa Barbara was a great place to live, since Los Angeles and Orange County kindasuck. Also there were people who after “making it in New York” – if you can make it there you can make it anywhere – decided to retire at 50 in Santa Barbara. The http//www. tech revolution made living in a backwater like Santa Barbara a more feasible, and the Hollywood set found it’s only 100 miles from LA. Transferring equity to Santa Barbara/Montecito gave a royal boot to housing prices. Following suit, realtors, land speculators, and developers began the process of bidding up prices. Voila – housing crisis.

Looking back, it’s hard to believe that a house costing $300,000 was considered out of the range of the local workforce to purchase. Have incomes really changed that much in 30 years? Well, no. Then why is the cost of housing so high here, you ask?

Land speculation and flipping (as it is known in the trade) helped fuel prices to sky-high limits. Housing was not so much a place to live, but something to own – like stock – in hopes of appreciation. So far the economists have been right. Average annual returns are positive. The question is whether the appreciation of housing is greater than in other investments. Maybe not. That’s possibly why foreclosures have increased recently.

So what can the government do for you? Well, they can create laws that require that there be housing for “all economic segments of the community”. Housing is supposed to be available for its workforce. At a very minimum the county should provide housing for key employment groups: police, fire, teachers, and administrative support personnel. That’s the subject of The Price of Paradise.

It’s a really great movie. But the problem is that the Santa Barbara County does not appreciate the publicity.

Santa Barbara woke up about thirty years ago and found that it was world-class when it comes to the demand for housing. This is a place that people want to cash out and retire to after they’ve made it somewhere else. Demographically speaking, the population profile has two humps, colloquially referred to as the “newly wed and nearly dead”; as ex-students associated with the University of California at Santa Barbara hang on to enjoy being single and work part-time, mostly in service industry jobs, like restaurants serving empty-nesters. Typically, the south coast of Santa Barbara does not have people in their middle ages – those middle-management types looking to start a family and buy a home - because of the cost of real estate here. Real estate pundits say that housing is an investment. But in Santa Barbara where the average tract home costs over a million dollars, that is taken to the extreme as house hunters hit up relatives, consider investment partners, and put everything they have into the deal, hoping (yes, hoping), that the price of housing will go up. Did I say hoping that the price of housing will go up? Yes, that’s how people have coped in Santa Barbara. They suffer and scrape together everything they have to enter this high stakes poker game and bluff their way along till one day they cash in their chips and move out of town; hopefully with a little money from housing appreciation.

To illustrate this, the manager of the city’s affordable housing policy (Housing Element) bought a million dollar tract home a few years ago. How did he do that on his salary? Well, he sold his prior home for $1.5 million and put $500,000 in the bank. That’s how you do affordable housing in Santa Barbara. What is the working class missing to enter the housing game? A foothold. One bit of sunshine is coming from major industries and public service agencies, such as the University of California, and Cottage Hospital because it’s clear that they may not be able to find employees to replace the positions held by existing locally housed employees who are retiring.

To solve the housing problem, the existing housing stock needs to be redistributed to households who work here; or new housing that is targeted for the local workforce needs to be built. These are extreme measures. Unfortunately, the starting point to increase the amount of affordable housing has to do with increasing residential densities. Density bonuses have been effectively used to write down the cost of land per residential unit. But the bottom line is more traffic. People who live in Santa Barbara chant a mantra of “smaller, quieter” and hate increased density because it uses open space, creates visual impacts, and adds traffic.

So are we any farther in the debate between the people who need housing because they have jobs, and the people who are already well housed and are against new development? This movie begs the question.