Funds Often Go to Home Buyers Rather Than Poor

Many city redevelopment agencies in Ventura County spend scarce housing funds not to build homes for the poor, but to fund loans for first-time home buyers.

The decision reflects a growing political reality: Building new housing for the poor is less popular than helping people of modest means buy existing homes. Also, at a time when land prices are increasing rapidly, money to build new housing doesn’t go as far.

Whatever the cause, the result is the same: less new housing for the county’s poorest residents.

“It’s not meeting the greatest need,” said Dan Hardy, executive director of Many Mansions, a Thousand Oaks-based organization that finds affordable housing for the poor. “The first priority should be housing people. The second priority should be giving them ownership.”

The housing money at issue is part of the property tax revenues collected by redevelopment agencies. Under state law, the agencies must spend 20% of the tax revenues within the redevelopment area on affordable housing. The rest is spent on such things as remodeling blighted commercial zones. The county’s 10 redevelopment agencies had about $32 million in housing funds last year, making it the largest affordable housing program in the area. Statewide, redevelopment agencies collected nearly $1.5 billion in such funds in the last fiscalyear.

Some redevelopment agencies put their housing money to creative uses. In Santa Paula, city officials spent $163,000 last year on sewer drains. This year, they’re spending $100,000 to renovate an apartment above a historic railroad depot.

Santa Paula, however, was an exception. Most redevelopment agencies spent the majority of their housing funds on loans to first-time home buyers, or to rehabilitate existing housing.

The Port Hueneme Redevelopment Agency spent all its housing set-aside funds over the last two years, about $900,000, on its first-time home-buyer program. In Oxnard, the redevelopment agency spent $2.1 million on a similar program last year, far more than it spent on new construction. The Fillmore Redevelopment Agency has also made first-time home-buyer support a top priority, spending nearly $1 million on the program in the last three years. The agency spent less than $100,000 on construction projects in the same period.

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The political problems interfering with the construction of new low-income housing were demonstrated by the August battle in Oxnard over a planned 94-unit affordable housing development. When dozens of people showed up to protest the project, the City Council reversed its planning commission and rejected the plan on a 4-to-1 vote. The council cited technical grounds, but a group suing the city claims that politics was the deciding factor.

Some affordable housing advocates say they understand the political realities, and have accepted the need to work within them. “As more and more opportunities for building housing at any level are being limited in the county, the way to provide for low-income families is to designate some of our existing housing stock for them,” said Lynn Jacobs, a longtime affordable housing advocate and Ventura planner.

But others worry about the long-term consequences of the decisions being made by redevelopment agencies. Eileen McCarthy, staff attorney for California Rural Legal Assistance, said first-time home buyer assistance is problematic because it serves only a segment of the population.

“The question is, in doing that, which groups of persons are you reaching?” McCarthy asked. “That’s a real tough question when what you leave is significant numbers of very low-income persons in very bad housing conditions.”

Emphasizing loans to first-time home buyers is often the approach taken in suburban counties, where community opposition to new low-income housing can be extreme, said Jan Breidenbach, executive director of the Southern California Assn. of Nonprofit Housing.

“They’re doing what’s permissible and what’s politically acceptable in their communities, but it’s the easy way out,” Breidenbach said. “First-time home-buyers’ assistance and senior rent subsidies will almost always gain acceptance.”

By contrast, she said, redevelopment agencies in urban areas, including Los Angeles and the San Francisco Bay Area, concentrate on housing construction.

City planners say other factors are at work besides political opposition. Dulce Conde-Sierra, the deputy director of housing and special projects in Simi Valley, said the shortage of available land is also causing redevelopment agencies to rethink their priorities. She believes loans to home buyers, rehabilitation and subsidies are as important as new construction.

“I think that they’re equally important,” she said. “You can’t just create new housing without preserving what you have on the ground right now.”

Last year, Simi Valley’s redevelopment agency budgeted $300,000 for two housing projects for low-income seniors, $300,000 for home rehabilitation and $248,000 for a long-standing senior rental assistance program.

But the city, like most others in the county, is still falling short of its housing goals. Last year, it built just four of the 261 low- and very-low-income units that it needs to meet its own targets.

Conde-Sierra said local officials recognize the need for affordable multifamily housing, but she said no new programs have been proposed so far. In the end, she said, a land shortage is the biggest barrier officials will face.

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Many Mansions, a well-respected affordable housing developer in Thousand Oaks, has worked around the shortage of affordable land by concentrating on buying and rehabilitating aging apartment buildings.

Dan Hardy, executive director of the nonprofit group, said high land values often push the costs of new construction above $150,000 a unit, far more than the $100,000 it is spending on total rehabilitation of the aged Island Village Apartments in Thousand Oaks.

But neighborhood opposition to housing for low-income families, not cost, is often the deciding factor in whether affordable housing gets built, Hardy said.

Thousand Oaks Housing Services Manager Olav Hassel agreed that spending decisions have been influenced by community values.

“Every city will continue to have problems meeting the needs,” Hassel said. “There isn’t enough land or money or political will. What we can do is work away at the need as creatively as possible.”

But Hardy is the first to admit that even rehabilitation projects, while often popular enough to garner neighborhood support, only address part of the need.

“We are creating affordable housing, but we’re decreasing the number of market-rate apartments,” he said. “Ideally, new construction is the way to go.”

Oxnard Housing Authority Director Sal Gonzalez admitted that home ownership, which has been a national and city priority, can also come at the expense of rental housing. Balancing the two has been difficult, he said. “We’re trying to achieve both ends of the spectrum,” he added.

An additional problem is the difficulty of monitoring the way redevelopment agencies spend their money. While the spending of set-aside housing funds is subject to independent annual audits, illegal or unauthorized spending is very difficult to catch, said Peter M. Detwiler, staff consultant to the state Senate Local Government Committee.

“One of the structural and institutional problems we have with this program is there isn’t any effective independent oversight and there aren’t any easy ways to raise issues with local officials about their spending practices,” Detwiler said.

“When a local group believes a city has spent its money inappropriately, they don’t have many choices,” he said. “One choice is to complain. The other is to sue.”

In one high-profile suit in 1991, a San Diego attorney sued the Poway Redevelopment Agency over improper spending. A Superior Court judge eventually ordered the agency to pay back $235,000 it spent on road improvements and other public works projects; the judge also ruled that the agency improperly spent $17 million on a performing arts center, park and Olympic-size swimming pool.

Catherine Rodman, the attorney who won the Poway case, agreed that oversight is a major problem for the set-aside program.

“No one in the state is keeping an eye on those agencies,” she said.