City looks at buying land for housing

In a move that would shift the way Santa Barbara provides affordable housing and work force housing, the city is pondering a plan to spend $2 million in reserves to buy land and save it for future projects.

Councilman Das Williams, who campaigned on a platform of providing affordable housing, proposed the idea. But it is being met with some resistance by the city administrator, finance staff and fellow council members Roger Horton and Dan Secord, who sit on the city's finance committee.

They contend the timing is wrong because the city is raising fees, cutting costs and spending reserves to balance a $35 million budget deficit next year.

"I think you've got a good idea, but it may not be time for that idea," said Dr. Secord. "I'm fundamentally concerned about the state of the reserves.

But Mr. Williams said he believes it is wise to buy rand now, before it gets more expensive.

Santa Barbara is proposing an overall $192 million budget next year, which includes an $87 million general fund. It has about $26.2 million in economic and disaster reserve funds.

But those funds are threatened. The state plans to take about $1.2 million in each of the next two years to balance its budget.

The issue of using reserves is touchy because the city is looking to make cuts in services and raise fees beginning in July. Maintenance at city parks, for example, will be reduced, and the city is looking to increase fees in the recreation and community development departments.

Buying the land with general fund money would allow the city to create work force housing for people who earn too much to qualify for federally subsidized housing but not enough to buy a market-rate home.

The city typically spends redevelopment money to help developers with affordable housing projects. But state and federal funding does not allow the city's redevelopment agency to spend money on workforce housing designed for people who earn between 120 percent and 200 percent of the area median income. That amounts to between $77,640 and $129,400 for a family of four.

Using general fund money would allow the city to build housing for that income category.

"The city has not been using the current redevelopment agency funds because they are waiting for something big, and in the meantime, the market is skyrocketing and we are getting left out of the game," Mr. Williams said. "It is imperative that as the market skyrockets, we get in now, instead of paying much more later on."

The concept is an interesting one, said David Fortson, executive director of the Santa Barbara County Action Network, which pushes for affordable housing.

"It is a fascinating idea, considering that the provision of affordable and work force housing is arguably the biggest issue facing the south coast," Mr. Fortson said. "I think these are the kinds of concepts that need to be kicked around."

Mr. Williams revealed his idea to the finance committee on Friday, and members told him to bring the idea up again in October. Dr. Secord asked that Mr. Williams in the next few months come up with piece of land that would serve as an example of something the city could buy.

Mr. Williams said that he doesn't know of any other communities that are spending general fund tax dollars to buy land, but that the idea came to him because he wanted to figure out a better way to spend reserves.

Under his plan, the city would buy the land at whatever the market rate is, and then sell it to developers for 75 percent of the market value in exchange for building lower-cost housing. Money from the sale of the land would go back into the property acquisition account He said doing it that way would mean the city would only have to spend reserves once and then the program would fund itself.

"I was trying to figure out a way to use our reserves without spending them, to address the need for affordable and work force housing," he said.

Councilman Roger Horton said he supports the proposal and that he would even someday be inclined to give more general fund money to start the land-banking program.

But like Dr. Secord he said it's not the right time.

"My problem is timing," Mr. Horton said. "My preference would be to not further tap reserves."