SR 12-12-2017 3D
City Council Report
City Council Meeting: December 12, 2017
Agenda Item: 3.D
1 of 4
To: Mayor and City Council
From: Andy Agle, Director, Housing and Economic Development, Housing Division
Subject: Funding for Affordable Housing In Venice
Recommended Action
Staff recommends that the City Council:
1. Approve the one-time use of Federal Community Development Block Grant funds
not to exceed $500,000 to rehabilitate 14 affordable apartments, located at 102
Navy Street in Venice, targeted to persons experiencing homelessness, including
persons from the Santa Monica Homeless Service Registry; and
2. Authorize the City Manager to negotiate and execute any documents necessary
to complete the transaction.
3. Authorize budget changes as outlined in the Financial Impacts and Budget
Actions section of this report
Executive Summary
The City Council in 2015 established taking a leadership role in regional efforts to
address homelessness as one of its five Strategic Goals. Partnering with nonprofits to
facilitate affordable housing opportunities outside Santa Monica as opportunities arise
facilitates a broader, regional approach to housing persons experiencing homelessness.
Venice Community Housing (VCH), a nonprofit affordable housing provider, has
requested approximately $500,000 to cover the total cost of rehabilitating 14 existing
affordable apartments targeted to persons experiencing homelessness. The property is
located at 102 Navy Street, one block south of the Santa Monica/Venice border. As a
condition of receiving the Santa Monica funds, VCH would agree to set aside three of
the apartments for persons from the Santa Monica Homeless Service Registry.
Background
Santa Monica’s investment in solutions to address homelessness include financing
housing in the City to serve people experiencing homelessness in Santa Monica and
financing housing outside of Santa Monica to collaboratively address regional needs.
2 of 4
To date, two affordable housing developments located outside of Santa Monica have
been financed with City funds:
In September 1995, Council authorized a loan of $400,000 in federal HOME funds
to New Directions, Inc. for the development of a 156-bed transitional shelter for
homeless veterans on the grounds of the West Los Angeles Veterans
Administration. The New Directions development is also a regionally funded project,
receiving funding from United States Department of Housing and Urban
Development (HUD) and the cities of Los Angeles, Beverly Hills, and Culver City.
In September and October 2007, the Housing Commission and Social Services
Commission, respectively, each met and voted unanimously to support an Upward
Bound House development in Culver City with 18 (converted motel) apartments for
homeless families. Financed with a $400,000 loan from City Federal Community
Development Block Grant (CDBG) funds to purchase, rehabilitate, and repurpose a
motel for emergency housing, the development was jointly financed by the cities of
Santa Monica, Culver City, Beverly Hills, and Los Angeles, as well as the County of
Los Angeles and the State of California. The emergency housing does not include
a specific set aside of apartments for families who became homeless in Santa
Monica.
Additionally, the City currently commits funding to nonprofit service organizations that
are located outside City limits, such as St. Joseph’s Center, which serve people who are
homeless on the Westside of Los Angeles, including Santa Monica. The City provides
annual grants to St. Joseph Center totaling more than $900,000 to provide services
delivered both in Santa Monica and at locations outside the City to benefit eligible Santa
Monica participants.
Despite the City’s extensive resource investment for housing, programs, and services,
the 2017 Santa Monica and Los Angeles County homeless counts reflect a significant
increase of homeless persons – 26 percent and 23 percent, respectively – from the
previous year. Most of the persons experiencing homelessness (74 percent) are
unsheltered, as Santa Monica and the larger region do not have sufficient temporary
3 of 4
and permanent housing resources. With 921 homeless people counted in 2017, Santa
Monica represents only one of 88 cities in Los Angeles County, which has over 57,000
homeless people. The scale of the regional homeless crisis has pushed Santa Monica’s
local homeless system beyond its capacity to meet growing demand.
Discussion
Venice Community Housing is a nonprofit organization founded in 1988 which provides
affordable housing and support services to communities in Venice and the Westside of
Los Angeles. VCH currently owns and operates 15 affordable housing properties
totaling 216 apartments, located primarily in Venice and Mar Vista. VCH also provides
social service programs including job training, life-skills coaching, youth development,
and family services.
The Navy Street property completed construction in 1994 as 14 new apartments and
was ground-leased by the City of Los Angeles to VCH for 55 years at $1 per year. Five
of the apartments are studios and nine are one-bedroom apartments. The construction
was financed by loans from the City of Los Angeles ($692,000) and the State of
California ($398,500), and tax credit equity ($428,247). The building is now 23 years
old and in need of rehabilitation, with a total cost estimated at approximately $500,000.
The main scope of work includes a new roof, boiler, electronic access system, exterior
doors, the installation of solar panels and attic insulation, exterior painting, and
replacement of bathroom and kitchen cabinets, flooring, fixtures, and equipment.
The Housing Element, Consolidated Plan, and Council Strategic Goals all identify
permanent housing for homeless persons as an established need and a priority issue.
Additionally, both planning documents indicate that preservation and rehabilitation of
existing special-needs housing is an identified need and priority concern. CDBG funds
have traditionally been targeted for the preservation and rehabilitation of existing
housing occupied by low-income households. Therefore, the proposed use of CDBG
funds for the Navy Street rehabilitation would be an eligible and appropriate use of the
funds.
4 of 4
In exchange for the City providing rehabilitation funding, VCH would set aside three of
the 14 apartments for persons from the Santa Monica Homeless Service Registry. The
set-aside would last for the remainder of the existing affordability covenant period,
which is 2049. The cost-benefit opportunity of the investment equates to approximately
$167,000 per apartment ($500,000 / 3). The cost compares favorably with the
$400,000 to $600,000 per-unit cost of subsidizing the acquisition and rehabilitation of
existing apartments in Santa Monica, or the $300,000 to $400,000 per-unit cost of
subsidizing newly constructed apartments.
Commission Action
At its October 19, 2017 meeting, the Housing Commission considered the funding
request from VCH for the 102 Navy Street property. The Commission voted to support
the proposed one-time use of CDBG funds, not to exceed $500,000, to rehabilitate the
property and set aside a minimum of three apartments for persons on the Santa Monica
Homeless Service Registry.
Financial Impacts and Budget Actions
The CDBG funding to be provided to Venice Community Housing is for an amount not
to exceed $500,000. Funds of $404,163 are available in the FY 2017-18 budget in the
Housing and Economic Development Department. Award of the funding requires an
additional FY 2017-18 appropriation of $95,837 from restricted cash account 19.120571
to account 19264.577723 to provide the entirety of the funding.
Prepared By: Barbara Collins, Housing Manager
Approved
Forwarded to Council