The City of Santa Barbara has a plan to preserve 41 affordable housing units by deploying its housing authority to manage a mobile-home park on the brink of foreclosure.
The City Council approved a $75,000 loan pay down, matched by the Housing Authority, to prove good faith to the California Department of Housing and Community Development — which is owed $1.4 million by Green Mobile Home Park.
The city’s takeover comes with a new 90-year affordability covenant on the park, located at 1200 Punta Gorda Street.
The council passed the payment during its consent agenda, so most of the day’s discussion was held during the Finance Committee meeting.
The Department of Housing and Community Development agreed to restructure the debt, which began as $650,000 in principle. State Senator Monique Limón and the Housing Authority communicated with the department to avoid foreclosure and find an agreeable plan.
Four residents from the park were elected to a new park board, and residents voted 27-2 in favor of a change in ownership.
Councilmember Alejandra Gutierrez said residents were nervous about the future of their homes but opened up to change after hearing from the Housing Authority.
Laura Dubbels, Housing and Human Services manager, said the city has only lent money to two mobile-home parks previously.
“It is kind of a different scenario than what we normally do and in this case, it was just a definite case, I think, of mismanagement, possibly. But we are trying to cure that by actually having the residents now on the board and also with a good entity, as the Housing Authority is,” she said.
Affordability covenants are lost during foreclosure sales, so the city and the Housing Authority’s actions ensure the rates stay low at Green Mobile Home Park.
“This new affordability covenant, this proposed 90 years, runs with the land regardless of whether the loans are paid off or not,” the Housing Authority’s CEO and executive director Rob Fredericks said. “So the affordability is protected.
“And that’s what we want to see at the end of the day is protection for the residents that live there now and the future residents, so that we have this great community asset.”
Committee Chair Eric Friedman said the city is losing affordable units more often than it is building them.
“This is a big deal in that we’re able to keep 41 of our most vulnerable low income residents in their homes and extend the affordability covenants for 90 years. It’s a really big deal,” he said.
The committee unanimously recommended the loan pay down.