In the News

Affordable units — a different view

Originally posted on Santa Maria Times

The Santa Barbara County Board of Supervisors was recently asked to consider an application from my organization for a $1.4-million loan toward building 40 units of affordable housing for seniors.

An unfortunate misinterpretation of the construction costs of Sierra Madre Cottages led the board to believe each home would cost in excess of $600,000 to build. This understandably, gave way to some robust observations regarding the affordability of such a project, and even suggestions that it would make much better sense to just buy market-rate housing.

Although the project will still cost $350,000 per unit to develop, this mixup has provided an opportunity to bring awareness to the challenge of building affordable housing in a market-rate economy.

Peoples’ Self-Help Housing has, for almost 50 years, been building homes coupled with site-based services for working families and vulnerable populations. Operating as a nonprofit, we own and manage 52 developments in the tri-counties area, providing safe and stable housing for over 5,000 residents.

Given the scarcity of land, the cost of construction and the price of labor, I am often asked how we can build so affordably. The simple answer is we can’t, and we don’t. Just like commercial developers, when we begin a project, we seek out and bid for land, we pay market rate for materials and we vie for a pool of much-sought-after contractors. Because we rely on a mix of public and private capital to fund our projects, along with those challenges, we face even more.

For example, when The Davis-Bacon Act comes into play, we pay federal prevailing wages, and to score highly enough to secure low-income housing tax credits (LIHTC), we must show proximity to schools, near a bus route and recreational opportunities, and be in the vicinity of hospitals, grocery stores and public parks. Unfortunately, when a site has all of those desirable attributes, not only does it score highly for tax credits, it’s usually similarly highly-priced.

In addition to proximity requirements, to secure public and LIHTC funding, our projects must include community rooms, play areas for children, be adaptively designed for seniors and the disabled, and be ecologically constructed and environmentally sustainable above and beyond building code requirements.

While there is no question that many commercial developments are also well-designed, often set amid attractive landscaping and conveniently located, they very rarely come with amenities such as professionally-staffed learning centers, dedicated social workers, or accommodate ready access to an extensive network of community resources.

These site-based services are the reason why Peoples’ Self-Help Housing communities have negligible eviction rates, experience virtually no crime, and since opening our after-school programs can boast an almost 100-percent high school graduation rate for students in the program, and zero teen pregnancy. This relieves pressure on public agencies like police, hospitals and schools, and enriches our community with a skilled workforce.

For nearly five decades, we have helped families flourish, have provided welcoming environments for the disabled and the formerly homeless, and at communities like the Sierra Madre Cottages, have created spaces for seniors to age in place with dignity.

With all of these extra services and construction costs, how can we possibly describe our housing as affordable to build and develop? That adjective can only apply after a ribbon-cutting and after our residents are warmly welcomed into their new homes. When rent is determined by ability to pay, typically 30 percent of income, a benefitting resident can call it affordable. Affordable housing isn't affordable to build, it only becomes affordable once someone moves in.

When the Board of Supervisors approved the loan for the Sierra Madre Cottages, members were given the development cost per unit. Even the misrepresented number did not deter them, which makes their decision to invest in area seniors even more impressive. Thank you for your vote, and thank you for your confidence in the transformative power of affordable housing.