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Cost of Rent Subsidies for Poor Elderly Tenants Delays Santa Monica Program
Santa Monica Real Estate Company, Roque and Mark
Roque & Mark Real Estate
2802 Santa Monica Boulevard
Santa Monica, CA 90404
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Harding Larmore Kutcher & Kozal, LLP  law firm
Harding, Larmore
Kutcher & Kozal, LLP

Convention and Visitors Bureau Santa Monica

By Niki Cervantes
Staff Writer

November 28,2016 -- A small but ground-breaking pilot program to save impoverished Santa Monica tenants, most of them elderly, from eviction by using City rent subsidies has been delayed again as City officials grapple with a rattling new finding:

Some cases in the proposed “Preserving our Diversity” program are all but hopeless -- and would drain money for subsidies from others who also badly need the help, a new analysis of the program found.

Despite the subsidies, some tenants would barely be able to financially survive.

They would still be living on “a dog and cat food diet,” said Council Member Kevin McKeown.

The analysis of the impact of the $200,000 in subsidies disturbed some council members, and prompted a postponement of the one-year pilot program at the council’s meeting last Tuesday.

Instead of focusing on subsidizing rents, the council asked City housing officials to look at using the program’s funding to increase how much tenants live on after rent.

The program, already delayed once, now goes back to the drawing board ("Santa Monica Program to Help Poor and Elderly with Rent Halted Before Starting," September 28, 2016).

The council will re-examine the program in about three months.

McKeown expressed concern with the delay. “There are people out there who desperately need this program,” he said.

City governments rarely get involved in offering rent subsidies, leaving such issues to other levels of government.

But Santa Monica is testing the waters in the midst of an ongoing housing shortage. Although sky-high rents are impacting many income brackets, the elderly living on fixed incomes are being particularly hard hit, officials say.

The City’s subsidies "of last resort" are meant for those who are using at least half of their income for rent and have lived in rent-controlled units at least a decade.

A City survey this summer found most were elderly (the average age is 69) and lived alone. Although their rents were far less than market rate, the tenants were barely making ends meet, the study showed. They reported not receiving any other subsidies.

It also found the average monthly rent was $954 and average monthly income was $1,144, or $13,728 a year.

But the proposed rent subsidies, staff acknowledged, were so costly that only 21 households could be included, far fewer than the 74 households in dire financial straits the City hoped could be helped.

The City “is leaving 53 (households) to drown economically,” Michael Soloff, a City housing commissioner, told the council.

City officials are sacrificing “the many to help the few,” he said.

As now proposed, the City could potentially spend $21,319 to subsidize just two individuals, Soloff’s analysis found.

One of those households “would still have to survive each month on just $270 of after-rent income, and the other on just $300 of after-rent income,” Soloff said in his report, which he said represented his views and not those of the Housing Commission.

Removing ten of the worst cases, possibly by finding Section 8 units for those households instead, would “ensure that all 64 of the remaining pilot households will have at least $550 per month in after-rent income,” he said.

“The proposed program design helps too few households in too uneven a manner,” Soloff said. “An alternative design should allow the City to assist many more of our extremely low income neighbors remain in place with dignity for the same cost."

McKeown and Council Member Sue Himmelrich suggested increasing the project’s budget, although the discussion was brief and no action was taken.

Total funding for the program is $300,000, with a third paying administrative costs. It is part of the City's $614.1 million budget for the 2016-2017 fiscal year,

Originally, officials said the proposed subsidies would be about $611 a month, or $7,332 a year, with tenant’s share being about $343 monthly.

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