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Affordable Housing
updated: Sep 04, 2012, 8:23 PM

By Edhat Subscriber

Yesterday I had an interesting conversation with a friend, who is in real estate. He purchases foreclosures with a couple partners, and then flips them. No real story, EXCEPT, he purchases "affordable" units (3 from the condos near the jail this year alone) at auction....and then they are no longer affordable. I asked him why the SB housing authority who is ALWAYS whining about the lack of affordable, isnt at the auctions to keep the properties affordable. He didnt know...so Im wondering why do we keep building and paying for more affordable housing...when the Housing Authority is not holding onto what it has. Does anyone know what the heck is going on???

Comments in order of when they were received | (reverse order)

COMMENT 316186	2012-09-04 08:32 PM
I don't have an answer but II suggest you ask to speak to one of the managers in charge of affordable housing in the City. Also talk with someone on the City Council, they are very approachable in person or via email. But be sure to talk with a council member on each side of the political spectrum, even the side you disagree with ... you may learn something you didn't expect.
COMMENT 316192	2012-09-04 08:46 PM
Ask your friend for more details. There's no way he's purchasing true affordable housing units that have been sectioned off for this purpose. He may think he is (or he may be exaggerating to you) or he may be purchasing old properties which were once part of affordable housing schemes but are no longer (they sometimes can expire, depending on what the developer's contract with the city was, usually after two or three decades.) You cannot purchase a property designated under this category and re-sell it at a profit unless you meet very, very strict guidelines. And being a real estate pro isn't one of them!
COMMENT 316197	2012-09-04 08:56 PM
192, Op here, Im sorry but you are incorrect. He is purchasing from the affordable housing (the condos) tract near the jail. The properties lose their affordable status when they go into foreclosure. Believe me, he is not in error, nor is he bragging. He also wonders why the housing authority isnt at auction to keep the properties affordable. These are properties that the Housing Authority sold to qualified applicants, who then lost the properties due to foreclosure....which the banks put at auction, and they are purchasable by anyone and lose the "affordable" designation. He has flipped 3 this year, and its all legal. Maybe you should check your facts....because on this one, mine are correct. I am wondering why the Housing Authority is letting this happen!
D8VANILLA	2012-09-04 08:58 PM
I know the answer. The affordables that were built near the jail were a 20yr lock-in. Meaning, if you could qualify to purchase one, then you would NOT be able to sell at open-market pricesfor 20yrs. If you wanted to get out before your 20yr lock-in time, then the owner would notify the City and the City had the option to buy back the property, or the owner can sell to anyone they want (that can qualify). But, the owner only gets the money they put into the place. Prinicple paid on the mortgage and the downpayment. I was told that they started a new program that the owner could also get expenses related to improvements to the property, such as new windows. ~~~~~ The new owner starts their 20 yr lock-in the day Escrow closes. ~~~~ Later, the City changed the lock-in to 25yrs, then changed in 2004 to 30yrs, and now the lock-in is 40yrs. Hope I explained everything clearly. ~~~~~~
D8VANILLA	2012-09-04 09:03 PM
The affordables by the jail have been there longer than 20yrs. ~~~~ But, one other thing... It's kinda weird, that in order to qualify, you could only make x amount of income, but if you only made x amount of income it would be almost impossible to afford the mortgage !!! At least that was the case when I looked at those by the jail. And, they were tiny apartments.
D8VANILLA	2012-09-04 09:06 PM
Just email or call the person in charge of the program. Here is his name and contact info:::: Let us know what he says... ~~~ David Rowell DRowell@santa barbara ca.gov 805.564.5461 x4578
COMMENT 316203P	2012-09-04 09:12 PM
There are two condo properties "near the jail" with affordable units. Forte Ranch had some affordable units and the first units were not ready for occupancy until ~early 96. So they have not reached the 20 year threshold. OP- Did your friend claim any units is this development?
COMMENT 316206P	2012-09-04 09:28 PM
Interesting. Is there a list anywhere of all the developments/units that the city has subsidized? Those who've lived for 20 years in the early subsidized units are coming up for a nice windfall.
COMMENT 316208P	2012-09-04 09:39 PM
They have them all listed on the City website. You just have to search around a little to find that list. ~~~~ I know a couple people that will make the mark in about 6 years, but they still won't be able to afford anything decent in this City. So, they feel like they are stuck, unless they move out of Santa Barbara.
COMMENT 316213P	2012-09-04 09:53 PM
I owned one of the affordable units near the jail and lived there for 10 years. Loved my condo--lots of oaks and wildlife around. Got married, and sold my place within the affordable framework. What's truly amazing is that the county (that development is a county program) didn't write into the rules that if a unit forcloses, it stays in the county affordable program. I'm not versed in the real-estate legal aspect of things, but surely the county could have gotten a first right of refusal if someone went bankrupt. I think the county is trying to be really careful now when they oversee an affordable transaction (like someone remodelling their one bedroom into a two bedroom and trying to get the higher rate of sale), but they really blew it on the foreclosure side. A terrible pity. And yes, when I was trying to find a buyer, the restrictions on income are so tight that few people qualified for a mortgage.
COMMENT 316235	2012-09-05 06:39 AM
Housing Authority has nothing to do with the requirements placed on certain developments, especially those applying for zoning amendments, to provide an allotment of "lower income units" within the development. These lower income units are not in the range that gas attendants or waiters can afford but they are within the mortgage range of a middle class professional. As said above these units cannot be flipped and sold off at market values for a specified period. BTW, the local housing office is not so flush with cash they can influence the housing market.
COMMENT 316236	2012-09-05 06:41 AM
As a local appraiser I can tell you that the OP is correct and her friend is able to purchase these affordable units that fall into foreclosure and then resale them at market rate. I just recently had a conversation with the lady who handles the county affordables and she too does not understand why these units are not being bought back by the affordable programs; county, city of SB or city of Goleta. The Goleta affordable program is the worst as the owners are getting away with whatever they want and the dept does no monitoring. Fyi - David Rowell does not handle the county affordables, but works for the city of SB's affordable program. Great employee but not the one in charge of what they buy back. It is a bummer to see these units fall out of the program, when affordable housing is needed.
COMMENT 316244	2012-09-05 07:01 AM
Because the people who are paid to make sure affordable housing is created want to keep their jobs. If we ever had "enough" affordable housing (who gets to decide this? I say we have plenty), those people wouldn't have jobs. It is just like the "homeless, inc." industry here in Santa Barbara.
COMMENT 316248	2012-09-05 07:14 AM
All the more reason to say "no" to new "affordable housing" developments and programs. As this Q&A demonstrates, these programs never achieve their goal of make housing cheaper, rather, they just cram more people into an already crowded space.
COMMENT 316252	2012-09-05 07:22 AM
When we were looking for a home we were shown two units at that condo complex near the jail that had been foreclosed on and were now privately owned. So it happens. Who knows what the affordable housing people are doing. Does anyone remember the story about 10 yrs ago about doctors and lawyers using the program to buy houses and condos in Ventura as investments and then renting them out? At the time the director said there wasn't any way to stop it because he didn't have the staff to verify the income and status of the applicants. Very similar to the abuse of the homeless shelter in Lompoc; if government can't afford to do the necessary audits and enforcement then they shouldn't be spending the money in the first place.
COMMENT 316259P	2012-09-05 07:37 AM
Thank you, 208P. I lucked out, putting in the proper search term on the first try and came up with this, Affordable Housing Information and this .pdf list of affordable housing units. Amazing - I had no idea there were so many!
COMMENT 316265	2012-09-05 07:43 AM
Taking RDA money forced Santa Barbara to use a good part of it building "affordable" housing units which brought the total of such subsidized units to 17% of the city's entire housing stock. At least that RDA nightmare is now over. Taking HUD grant money also comes with strings demanding we continue to increase the numbers of low-income housing units in order to get federal money for feel-good enabling social agencies that have turned this city into a vagrant magnet. Know this when you elect your next city council who will continue to sell Santa Barbara's future to outside forces, or those who want Santa Barbara to live within its own resources and not be dictated to by outside money.
COMMENT 316270	2012-09-05 07:54 AM
One other important thing, both City and County Housing Authorities are focused on rental units, not sale units. The County often had limited- term affordable units(5 years, 10 years) while the city of SB has always had minimum 30-year affordability. This is a very complex issue. You should sit down with someone in the Housing Div. at the city or county to understand better.
COMMENT 316272	2012-09-05 07:57 AM
It is because the affordable restrictions, transfer and resale restrictions designed to avoid fraud, trafficking, profiting and speculation on affordable units DOES NOT APPLY WHEN THERE IS A FORECLOSURE. Once that occurs all of those limitations dissolve.
COMMENT 316291P	2012-09-05 08:40 AM
That the rules governing everything else do NOT APPLY WHEN THERE IS A FORECLOSURE is the key point here. Because we must protect the banks at all costs! And I do mean ALL costs! Silly me, I always thought the agency(ies) actually held the mortgages, not for-profit 3rd-party banks.
COMMENT 316310	2012-09-05 09:06 AM
6291P..... Until about 4 years ago it was inconceivable that property values would tank and thousands of new owners find themselves underwater with their mortgages during the worst recession since the Great Depression. It's hardly fair to blame local regulators for failing foresight when Federal regulators didn't see it coming either or didn't want to see it 'coz they were too attached to the idea of rational markets that would not act self destructively. And lets not forget our trusted leaders pushing for fewer restrictions on greed and excess and abuse too. But your point that our government is currently owned by the banks (as well as defense contractors) goes without saying.
COMMENT 316321	2012-09-05 09:20 AM
Our government is owned by the public employee unions who elect their own to sit on both sides of the bargaining table to dispense more and more goodies to themselves with our tax dollars. Take a look a the California state legislature if you want the most egregious example. All government employee puppets with the powerful CTA teacher unions spending more money getting them into office and influencing legislation than any other lobbying group in California. The public employee unions are behind the "banksters and defense industry" smokescreen because they don't want you to look too closely to what they have done to our state, our educational system and our intractable public debt going primarily for their own benefits.
COMMENT 316326P	2012-09-05 09:32 AM
The one big complaint about the affordable housing program, is that if you want to sell, you only get back your principal and down payment. They don't make any interest on that money. Which means, there is NO incentive to move-on, and NO incentive to pay off the property. I would rather the City set it up, so the person can, at least, make a little interest. And, give some incentive to move-on and let some other low-income folks have some relief in housing. There are defintily flaws in the system. ~~~~ I heard of a couple, husband-wife, no children living with them, got a 3 bedroom condo!!! Wondering if they lied on their original application and nothing was verified adequately. Giving a middle-age couple, NO kids, a 3 bedroom place is crazy!!!
COMMENT 316327	2012-09-05 09:33 AM
Not a smokescreen, pointing out the influence of the financial and defense industries is just as valid as the points you are trying to make.
COMMENT 316335P	2012-09-05 09:46 AM
I am amazed that anyone believes that public employee unions run the country. You have to be in a lot of denial to ignore the positive feedback loop of mega-tons of cash from multinational corporations buying legislators to write laws to allow the wholesale export of American manufacturing overseas...resulting in the decimation of private unions, the previous foundation of a healthy middle class. The only middle class we have left is public workers - it's difficult for small business to compete in a franchised cookie-cutter "free market." Public employee unions sent our jobs overseas? Reduced taxes on the 1%? Devised obscure financial instruments to spread risk to the public? Now we need to turn against ourselves and blame teachers, cops and firefighters? Really?
COMMENT 316338	2012-09-05 09:47 AM
Those units "by the jail" are Oak Creek. They are County of SB, not City.
COMMENT 316363	2012-09-05 10:33 AM
BIGGEST. SCAM. EVER
COMMENT 316366P	2012-09-05 10:34 AM
There are several Housing Authority's and not just the City Housing Authority. In this case it is the County Housing Authority that is responsible for those homes which has nothing to do with the City Housing Authority. The SB City Housiing Authority is very well run by very honest people!!!!
COMMENT 316376	2012-09-05 11:06 AM
Public employee unions run California. Stick with the argument and stop trying to confuse it with your "bank-sters" and spend more time worrying about STERS (and CALPERS) which is robbing our future with its bloated promises to the largest group of public employees in our state, the teaching industry - all CTA union driven. CTA buys the legislators (hello Das Williams,Hannah-Beth Jackson and Lois Capps) and the legislators union tools then suck up tax dollars for CTA benefits in return. Then back even more tax initiatives like Prop 30, and hold your kids as hostages to their demands. Voters have a chance this November to undo this real gridlock in Sacramento. Stop voting for tax and spend union-backed candidates (see above). It is that simple to starve them out of the system.
COMMENT 316405	2012-09-05 12:08 PM
Toss up whether it was the state teachers unions or the state prison guard unions who did the most damage to us these past decades. But it was the public employee unions, working alone or in concert that dumped California into the scrap heap. And we elected the very people to do this to us and got nothing for ourselves in return. We now have some of the worst schools in the nation and crime is invading every neighborhood. You just don't keep re-electing people who did this to you nor do you keep passing initiative sponsored by these very unions who care only about themselves and not the state and the rest of us who get stuck with the bills and the poor results. California deserves better than this. But we let ourselves get choked by public employee union driven gridlock and are quickly going over the cliff.
COMMENT 316508	2012-09-05 03:21 PM
Where did all this public employee unions come from? If they were really running the State they would make decent money to be able to support their families and not have to live paycheck to paycheck without benefits for their families. Until you know the whole truth, don't speak on it.
COMMENT 316544	2012-09-05 04:17 PM
Since they are now getting way more than most everyone else, we no longer want to support their lifestyles. The free ride on other people's back is over. You want a raise? Dump your union and keep that $1000 a year extra in union dues first and show taxpayers you mean business. Then convert to defined-contribution retirement plans. Don't demand for automatic increases in health insurance. And make it far easier to terminate unproductive employees. Unions no longer will be getting a blank check from the taxpayers because they abused the public's good will. Government employees should get good salaries so they less vulnerable to corruption. But they also need to be fired more readily when they don't do the job.
COMMENT 316582	2012-09-05 05:31 PM
544 this post is about affordable housing..not unions. I have noticed that you continually hijack threads to spew your anti union rhetoric. Getting back to topic....and if everyone else would ignore the anti union jibe.....my friend bought 3 of the nice condos near the jail..not the old apartments. I appreciate those in the knw for verifying what I wrote about.......thank you..its a huge loop hole to explore further as foreclosures continue.
COMMENT 316600	2012-09-05 06:00 PM
The SB Housing Authority needs to be audited by the SB Grand Jury. You can not believe how many cases of fraud are occurring in this taxpayer supported machine.
COMMENT 317035	2012-09-06 05:07 PM
I would like to clarify that the two local housing authorities, the Housing Authority of the City of Santa Barbara and the Housing Authority of the County of Santa Barbara, do strictly rental housing and serve primarily very low income seniors, veterans and the disabled. The project in question was under the County Housing and Community Development Department with no involvement from either Housing Authority
COMMENT 336774	2012-10-29 01:28 PM
Affordable housing? We moved into the Towbes group's Willow Springs on August 9, 2012, a 2bd, 1 bath, for $1649 monthly, a 25% reduction from "normal rate." On Oct 5th we were informed that their "proud participation" in affordable program was ending, as of August 31, 2013. In spite of 2 angry letters to Towbes group, a manager STILL HAS NOT communicated with us, putting us on hold. We would NOT have moved here if we had known this.... It's a horrid apt, to begin with, and now, this will cost us MONEY. (I'm angry.) And now, this morning, I learn from the internet (Noozhawk) that we can, at least, opt out of our lease early.... (They could not be bothered to tell us even this much, in the letter, or 2 subsequent e mails. Can anyone enlighten me on the Towbes Group? And their "proud participation" in this affordable housing program?? And, who should I contact?

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