City Seeks to Diversify Senior Buildings

By Olin Erciksen
Staff Writer

August 29 -- For years, housing officials have wracked their brains figuring out how to build more racially balanced, senior affordable housing that benefits Santa Monicans. Now they may have found an answer: instead of asking for money from Uncle Sam, compete for private dollars.

This September, housing officials will find out whether they won a highly competitive bid for $3 million in grant tax credits to subsidize a new 7,500-square-foot, 20-unit building for seniors at 1458 14th Street in Santa Monica.

Those tax credits – awarded by the State, but considered private money – would allow the City to boost critically low levels of housing for the low-income elderly who face waiting lists as long as 20 years at some Santa Monica senior buildings, but without using federal funds.

“This is not the federal government giving money, but rather private equity purchasing this credit,” said Jim Kemper, a senior administrative analyst for the City working on the project.

Because they are private funds, the City can -- for the first time -- sidestep guidelines forbidding preferences for local residents and avoid a housing lottery system that local officials say gives an unfair advantage to groups that know how to work the system, Kemper said.

“The fact that they are not federal funds means there can be no lottery dominated by groups of very organized people like we have seen here in Santa Monica,” said Bob Moncrief, who manages the City’s Housing and Redevelopment Department.

Four years ago, Moncrief boycotted the grand opening of a new 65-unit, $9.5 million senior project he had worked on for six years because such tactics resulted in a building predominantly occupied by white tenants who were not residents of the city, which pumped $2.3 million into the project.

When the Menorah Housing Foundation opened near 4th Street and Wilshire Boulevard in May of 2002, 58 tenants selected through a HUD lottery were white. Many of them were immigrants from the former USSR who were organized by the bus loads to pick up applications before the building was opened. (see special report)

And there is evidence that other federally funded senior projects around Santa Monica have little diversity and are occupied by residents who moved in from outside the city.

If Santa Monica wins the bid in September, it will be the first new affordable senior housing project in the City since the controversial opening of the Menorah House, Moncrief said.

The City has even earmarked $3 million to help with construction, provided that that the bid is successful.

That could be a big if, though.

“It will be a very competitive process,” said Moncrief.

A number of factors will help determine which city receives the award, including the size of the senior population, geographic location and the number of units planned.

Other costs would be shouldered by Simpson Housing Solutions (SHS), a real estate investment and development group dedicated to affordable housing which has partnered with a non-profit to manage the proposed project.

It was SHS, according to Moncrief that suggested using tax credits, as opposed to federal funding for the project.

The company’s portfolio used tax credits to finance hundreds of family and senior dedicated affordable housing projects from Lompoc and Oxnard, California to Richmond Virginia, according to its website.

If successful, the project could serve as a model for other cities in the region that may be looking for a way out of the federal straitjacket, Moncrief said

“If we used local money and the tax credits, were hoping many more localities would invest millions of dollars in future projects,” he said.

Such projects, Moncrief said, could not come at a better time.

“There is such a high demand for affordable housing for seniors, many of whom are retired and live on fixed incomes,” he said. “These buildings are their homes, where they look for companionship.”