Amid Concerns About Funding, Santa Monica Opens List for Federal Housing Subsidies

Example of a rent-controlled apartment building
Older “dingbat” apartments like this one rent for less than newer apartments, but with demand going up in Santa Monica and relatively few new units being built each year, even older buildings like this one are out of reach of lower- and middle-income households without assistance from programs like Section 8. Photo by Sirinya Matute

For the first time since 2011, the Santa Monica Housing Authority will open the wait list for federal Section 8 rental assistance this Tuesday.

The reopening of the waiting list — people can sign up online from 8 a.m. to 8 p.m. on January 31 — comes after the city had successfully petitioned the U.S. Department of Housing and Urban Development (HUD) to increase the subsidy available to lower-income renters through the Section 8 voucher, citing rising rents in Santa Monica.

“Federal housing subsidies provide a thin safety net for our most vulnerable people to prevent them from becoming homeless. It was not their choice to be in need. Economics and factors like age and disability lead them to where they are,” said Barbara Collins, housing manager for the city’s Department of Housing and Economic Development.

Section 8, officially called the Housing Choice Voucher Program, is the principal HUD program for assisting low-income people to find “decent, safe, and sanitary housing.”

Unlike Santa Monica’s nonprofit housing developers who build permanently low-cost housing, Section 8 provides a subsidy to eligible households to be used to rent privately-owned housing within Santa Monica.

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However, with a new presidential administration that is openly hostile to federal spending on safety net programs like Section 8, the future of the program is uncertain. And with more than 30,000 people on the list and skyrocketing rents in Santa Monica, it is more vital than ever.

“I think it would be foolish not to be terrified,” said Collins. “It’s very scary. Most people we serve are on fixed incomes.”

Many of the approximately 1,200 very-low income Santa Monica households (i.e. a single-person household earning annually) that receive Section 8 assistance are elderly or disabled people, Collins said, adding “We have no idea what that’s going to look like [if their benefits are cut].”

One option, she said, is it to look to the recently-passed Measure GS and GSH, a small sales and use tax increase which will generate money for affordable housing and schools. The expected amount of money generated for affordable housing annually is around $7 to $8 million.

Some of that money could be used as a stop-gap measure in the event that Section 8 funds evaporate, Collins said.

In the last years of the Obama administration, Collins and her department worked with HUD to strengthen the Section 8 program and the city adopted new proactive measures to help get property owners to consider accepting the vouchers.

A graph showing the increase in median market-rate rents in Santa Monica. Image via City of Santa Monica.

In 2015, the city sought permission from HUD to extend the period of time people seeking housing with a Section 8 voucher to find a willing property owner to rent to them because the scarcity of housing in Santa Monica had put many apartments out of reach of the people who relied on Section 8.

Recently, Collins said, the city won a major victory by successfully petitioning HUD to increase the maximum subsidy available to low-income renters in Santa Monica. For example, the maximum subsidy for a one-bedroom apartment (the subsidy varies depending on the size of the apartment) used to be $1,352 a month. Now, it is $1,930 a month.

The City Council also recently adopted the Housing Opportunity Utilizing Subsidy Enhancements (HOUSE) pilot program.

Part of the program includes aggressive outreach to property owners in order to get them interested in participating in the program. The Council even approved offering property owners a one-time $5,000 bonus for every unit they rented to a Section 8-reliant renter for the first time.

“We’re hoping that landlords who were previously adamant about not participating” will reconsider, Collins said. She is confident that once they do participate, they will discover that the program isn’t as onerous or risky as some property owners believe.

The city is also very clear about prioritizing certain renters. According to Santa Monica’s Housing and Economic Development website, priority is given to people who:

  • will be/have been displaced from housing in Santa Monica due to the Ellis Act, owner-occupancy, code enforcement, disaster (fire, flood, earthquake, etc.) or domestic violence; or
  • live or work in Santa Monica

And within those categories, further priority is given to veterans, people who are elderly, living with a disability, employed full time, families with minor children in Santa Monica schools, and households that spend more than half of their total income on rent and are not already in subsidized housing.

Santa Monica once had one of the strictest rent control laws in the country. Until 1999, the vast majority of property owners renting units in buildings built before 1979 could not raise the rents except for minimal increases permitted by Santa Monica’s Rent Control Administration. In 1999, a new state law kicked in that allows property owners to raise rents to market-value in controlled units once they are vacated. The rents on the units are once again controlled when a new tenant moves in, but this time at the new, higher rent.

That combined with increasing demand to live in Santa Monica and a low annual increase in new housing has pushed rents in Santa Monica increasingly upward.

In 2016, Santa Monica approved 380 new units. The vast majority of them, 318, were part of one project that took several years to negotiate and will likely take several more years before they come online. The project, 500 Broadway, included 249 market-rate units and 64 deed-restricted affordable units located a couple blocks away.

To get an idea how tough it is for renters in Santa Monica, it’s important to look at the rental vacancy rate.

According to the U.S. Census Bureau’s American Community Survey (ACS), over the last five years, the vacancy rate for rental units in the city has averaged about 2.8 percent, meaning that at any given time in the city less than three percent of rental units are on the market for new tenants. The rest are either occupied or have been taken off the market for other reasons.

By comparison, San Francisco’s vacancy rate in 2014 was 2.5 percent, Los Angeles’ was 3.4, and Detroit was 7.5, according to the ACS.

A recent report by the California Department of Housing and Community Development noted that communities that resist new housing growth are driving up levels of inequality throughout the state.

The lack of housing growth makes it harder and harder for lower-income people to find housing in jobs-rich areas like Santa Monica without some sort of assistance like Section 8. And given the uncertainty in Washington, that soon may not be an option.