By Jorge Casuso
August 6, 2025 -- The City Council on Tuesday is poised to approve the balance of a $34.8 million loan to rehab a 76-year-old courtyard building in the Pico Neighborhood with 40 rent control units.
The $19,616,330 loan from the City's Housing Trust Fund (HTF) to Community Corporation comes after the affordable housing provider received a $15,183,670 HTF loan in January 2000 to buy and prepare to rehab the building.
Community Corp, which had hoped to develop the property that fall, is not expected to pay the full amount of the loan but is seeking other funding to lower the City's cost, according to a staff report to the Council.
The amount the housing non-profit is requesting as part of Tuesday's Consent Calendar addresses "any unanticipated costs," as well as a $2 million developer fee, staff said.
The use of HTF funds that have been tapped to help keep the cash-strapped City in the black highlight's the Council's efforts to preserve existing housing that is far below market rates.
Existing rents at the building located across from Virginia Avenue Park range from $587 to $1,056 per month in a City where the median going rent for a controlled unit is $2,683 ("Rent Control Rates Inch Up, Turnover Remains High," April 23, 2025).
But the cost of preserving the 24 one-bedroom and 16 two-bedroom units will be steep. The City will need to evoke its Local Emergency on Homelessness to exceed the HTF's per-residence loan limits, according to staff.
The amount per residence is $802,875, which exceeds the guidelines of $747,108 to buy and rehab one-bedroom units and $786,344 for two-bedrooms.
The City's loan amount "also assumes the allocation of up to 20 Santa Monica Housing Authority Project Based Vouchers (PBV) "in order to "help address future operating deficits due to existing low rents for returning tenants," staff said.
Of the total loan amount, Community Corp has budgeted $1,777,747 for tenant relocation costs, according to staff.
The money will be used for "paying the difference between the tenants’ current rent and rent at the temporary location," according to staff.
It also will pay for "assistance locating comparable housing, moving and utility transfer costs, and reimbursement of reasonable and necessary out-of-pocket costs associated with the relocation."
The City could potentially apply 21 of the 40 rehabbed units towards its State mandated target of planning to add 6,168 below-market-rate units by October 2029.
That's because City code enforcers found that those units had at least four code violations that make them "unfit for human habitation," according to staff.
"The City Council must also make determinations that the City’s financial commitment is necessary to preserve this housing stock from imminent loss for the existing residents," staff said.
The accompanying resolution the Council is expected to approve Tuesday will record a deed restriction "that will preserve the units as affordable housing to persons and families of lower income at affordable housing costs for at least 55 years."
