Middle-Class Condo Project Clears Planning Commission Hurdle
The 48-unit Los Portales project now needs the approval of the Santa Barbara City Council.
A proposal to build a price-controlled condo development for the middle class on industrial Montecito Street came a big step closer to reality Thursday with the Santa Barbara Planning Commission giving its blessings.
The 5-1 vote in favor of the 48-unit Los Portales project means that, after four years of wrangling, developer Jeff Bermant’s proposal just needs to pass muster with the Santa Barbara City Council to get started. The council is scheduled to consider the plan Sept. 10.
Although the project is price-controlled, this is Santa Barbara — where the median cost of a home is more than $1 million — so the qualified applicants still would need a pretty good income.
Under the proposal, residents would need a family income of $100,000 to $140,000.
The appreciative value of the homes would be capped at 2.5 percent annually. By comparison, market-rate condos have increased in value by an average of about 9 percent annually since 2000, officials with Bermant’s company said.
On Thursday, Bermant said he’s not in this for the money. “I’m very passionate about this project,” he said. “This should be an inclusive community, not an exclusive community. I feel we have left a whole bunch of people out of our plan.”
The 1.8-acre project would be split into six buildings, with the tallest reaching 42 feet. The project would include eight market-rate units, which would help subsidize the 40 below-market rate units. The proposal would flip on its head the city’s inclusionary housing ordinance, which requires developers of projects with at least 10 units to set aside 15 percent of the units for middle-class housing.
However, Bermant’s definition of middle class involves a higher-paid family than the city’s definition.
One sticking point with city staff and the commissioner who voted against the project — Charmaine Jacobs — was the relatively small gap between the price of below-market-rate units and the actual median cost of a market-rate condo around town.
The cost of the Los Portales below-market rate units would range from $495,000 for the most-affordable two-bedroom unit to $645,000 for the most-expensive price-controlled, three-bedroom unit. City officials say the median cost of condos in Santa Barbara is $575,000 for two bedrooms and $710,000 for three bedrooms.
“We feel the proposed project is too close to market value,” housing programs supervisor Steve Faulstich said.
Bermant officials didn’t dispute the city’s numbers for median market-rate condos, but countered that the city’s figures were skewed because they include many condo units that were built in the 1960s and earlier. Brand-new three-bedroom condos, Bermant officials said, still would fetch $800,000 to $900,000.
City staff members also opposed Bermant’s request for the freedom to increase the price of the condos by 3 percent every year until they are completed to keep pace with the rising cost of construction.
Ultimately, the Planning Commission sided mostly with Bermant, but compromised a little by reducing Bermant’s 3 percent request to 2.5 percent.
The matter needs approval from the City Council because it involves altering the zoning to allow the condo developments in an area zoned for light industrial.
The project is a stripped-down version of its former self. When originally proposed in 2004, it included 90 units. It met stiff opposition from neighbors concerned about the size, bulk, scale and blocked views. On Thursday, no opponents spoke against the project to the commission, and the audience was sparse.
“When the room is empty something positive is happening, as far as community feedback is concerned,” said Commissioner Harwood “Bendy” White.
But Jacobs said the project reminded her a little of a large condo complex on Chapala Street called Paseo Chapala. That project, too, was approved with little-to-no opposition, but controversy erupted later, as it was getting built. Now, the building is widely credited as a major inspiration for the organized effort to lower height limits in the city.
“The decision to change how Chapala Street looked was one we all liked a lot, and the benefit was housing,” she said.
The business model for the project is unique. The land was purchased for $3.5 million by the Housing Authority of Santa Barbara. This alone is atypical, given how that department generally focuses on working with low-income housing.
To better make the payments, the Housing Authority received a loan from the Santa Barbara Foundation. The project would be policed by the city’s Community Development Department.
Among the rules to be enforced is the stipulation that at least one family member work in the city of Santa Barbara. Also, the residences must be occupied by the owners; they cannot be rented out. In addition, the units can’t be sold at market value.
Meanwhile, Bermant has capped his maximum profit on the project at $2 million, an amount he is referring to as a developer’s fee.
Commissioner John Jostes was absent.
Noozhawk staff writer Rob Kuznia can be reached at .
» wrote on 08/22/08 @ 10:59 AM
I absolutely love the fact that we’re finally using public funds to help those in need. I can see no better use of our tax dollars than to spend it on those who cannot afford to live here. I recommend the city council double Mr. Bermant’s developer’s fee to $4 million as a reward for being so good to those less fortunate.
All us rich folks can do our part by volunteering to pay more than our fair share of taxes. I for one am planning on paying twice the property tax that I am assessed. This way maybe the city can buy the Miramar and build and operate its own hotel. We all know that government knows best.
» wrote on 08/22/08 @ 12:01 PM
I guess as a secretary in a law firm I would NOT qualify for one of these condos. Being single and below middle-class (according to the family income required) has squeezed me out. I love Santa Barbara, but I could never afford to own real estate there. I moved to Oregon 4 years ago to buy a home next to a creek in a small town. That is the choice I made, although I still would love to be back in Santa Barbara.
I do give Mr. Bermant kudos for putting this project on the table and I can see that it will help a lot of people to buy a home, although there is still a need for the working sector that are not convicts.
» wrote on 08/22/08 @ 01:03 PM
I agree we need more affordable housing in Santa Barbara, but I also agree that the price of these units is too close to the median condominium price. And...$100,000-$140,000 is defined as the middle class? According to a recent LA Times article discussing Obama’s and McCain’s tax plans, anyone making over $117,535 is in the wealthiest 20% of our nation (http://www.latimes.com/news/nationworld/nation/la-082108-na-taxplans-g,0,5489162.graphic). I know this is a federal statistic, but $100,000 is a lot of money, even in Santa Barbara. I think the City should be spending their $3.5 million for property investments to provide housing for people in the very low income categories, rather than for people in the wealthiest 20% of our nation! I applaud Charmaine Jacobs’ vote against this plan.
» wrote on 08/22/08 @ 02:17 PM
This project is breaking a lot of rules for setbacks, mass, bulk, scale, car parking, and especially zoning. Therefore, it needs a lot of public benefit to justify that as a discretionary action by City Council. The basic policy question is whether those selling prices are low enough to be considered such a public benefit that justifies all the usual rules being broken. The broader implication is that this project is a test of how affordable can new housing become even with the highly creative and innovative private-corporate partnerships involved, as apparently has been exercised for this project. Can Santa Barbara really build truly affordable housing anymore, unless it is subsidized from an even bigger unaffordable housing project that typically yields 5 unaffordable luxury housing units (usually for non-resident retirees) for every one moderately affordable unit exacted from the same project???
The City Council should vote NO and call their bluff. I am all for truly affordable housing and this site is one of the most practical locations for it all issues considered, but is this particular project really affordable enough??
» wrote on 08/22/08 @ 04:26 PM
This project looks like a boondoggle. Wow Jeff you really are a man of the people, what with only taking two million in “developer’s fee”. With the real estate market already saturated with condos does the CIty really need to be supporting housing for people making over $100,000 a year? No, epecially across the street for La Casa De La Raza. Housing money should be spent for housing for the working class, not the upper middle class.
» wrote on 08/22/08 @ 10:37 PM
Affordable housing may well be an oxymoron in a strip of land that has the best climate and arguably most beautiful geography in the world. Many people, with LOTS of money, would like to live here. Having said that, one must admire the continuing efforts of some diehard truebelievers to make affordable housing happen. This is a novel approach, partnering government and private resources. If Jeff can pull it off, given the nature of SB activists to try to stop virtually anything that smacks of development, he deserves at least $2 million. My only question is: why should employees of non-profits get special consideration? Non-profits own some pretty impressive property in Santa Barbara - seems to me they get enough favorable treatment.
» wrote on 08/23/08 @ 01:15 PM
I agree, affordable housing may just be an oxymoron in SB, but condos in that price range are NOT plentiful in our market, we need the housing options, and that location is an under-utilized site near public transit, workplaces, stores, ALL GOOD. I too applaud the efforts of those involved. Those who are so ready to criticize--can YOU produce a better blueprint? ...I thought not.
» wrote on 08/23/08 @ 09:15 PM
Jeff’s a good guy. He takes a lot of crap from the obstructionist in town, but he’s always trying to do what’s right. It’s to bad he couldn’t get the original project through but it wasn’t suburban enough for most and anything at all is too much the N3 crowd.
» wrote on 08/27/08 @ 10:23 AM
Perfect...the City working hand in hand with developers to create housing for a selected few. More of my tax dollars funneled to government programs.