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Sized to Sell in Santa Barbara

Can Smaller Units Make Middle-Class Housing a Reality?


Thursday, June 25, 2009

Having studied the financial feasibility of creating more middle-class housing in Santa Barbara by building smaller units, a couple of consultants from Berkeley-based Strategic Economics delivered their verdict to a rapt audience of civic activists and architects on Wednesday night. For those who missed it, they will repeat the presentation tonight, Thursday, from 6 to 9 p.m., at the Faulkner Gallery in the central branch of Santa Barbara Public Library.

The existing standard for development in the City of Santa Barbara, Dena Belzer and Sujata Srirastara discovered, is 26 condos per acre, 22 of those luxury condos going for $1 million or more, and four costing $300,000 and geared for buyers with “moderate” incomes of $80,000 per year. Those four units represent the 15-percent-affordable requirement the city imposes for condo projects, and people enter a city-run lottery for a chance to purchase them. This mix typically nets developers a 16 percent net profit.

Belzer and Sririastara set out to see how much middle-income and moderate-income housing they could introduce into the mix and still make the project profitable enough that developers would build.

The winning scenario featured 62 units on one acre. It yielded a 15 percent profit, the only one that penciled out of the three hypothetical projects Srirastara and Belzer studied. None of its 62 units were luxury condos, but 38 were what the consultants called “standard” condos, costing up to $1 million, for buyers with incomes of $200,000 a year. Another 18 were called middle-income workforce housing - geared toward families making $120,000 a year and costing $800,000. Six were for moderate-income buyers. Parking was calculated at 1.5 spaces per condo instead of the usual two because it is “unbundled” from the units. Buyers can choose zero, one, or two spaces, with the condo’s cost adjusted accordingly.

Belzer and Sriristara were able to fit that many condos onto an acre by making the units smaller than normal, ranging between 1,000 and 1,400 square feet, except for the affordable units, some of which were as small as 925 square feet. Half were one-bedroom, half two-bedroom, all with ceilings nine to 10 feet high, conglomerated into either a layered four-story building, or a three-story building with a flat roof.

Following the presentation, a homeowner who lives near Cottage Hospital was among those expressing horror. She said that such a project would ruin her neighborhood. The unbundled parking would lead to more people parking on the streets, she said, and three- to four-story buildings are already killing the character of the Westside, where 100-year-old homes with large street setbacks are already being demolished. Among the fans of compact units who answered the critics was Eric Lohela, 28, who said that “everybody my age is leaving” the city. He argued that a vibrant community includes youth, and, after sharing the variety of living situations he has endured in Santa Barbara, said he would love to buy a smaller-sized condo. Santa Barbara city planner Betty Weiss said a project of this size would more likely be zoned for the city core than for Eastside and Westside neighborhoods.

The consultants said they were aware of examples of developments as dense as the one that they projected in San Francisco, Minneapolis, and Denver, but couldn’t cite any names or addresses on the spot. Some audience members sang the praises of exemplary ultra-compact developments in Santa Barbara - such as Casa las Fuentes, Garden Court, El Carrillo, and Casa las Granadas - as well as backyard granny units measuring less than 700 square feet, and very small attractive units in Vancouver and Victoria, Canada, that are reportedly “selling like hot cakes.”

One audience member noted that there are few one-acre lots in downtown Santa Barbara, a point the consultants conceded. They said they would have to go back to the drawing board and recalculate for smaller lot sizes. Also still unanswered, because the consultant’s floor-to-area ratio calculation method differed from the city’s, was how much garden space these projects might contain and how that compares to existing examples in Santa Barbara.

Following tonight’s presentation, the study of smaller units will next be reviewed by the Planning Commission at its July 23 meeting, as part of fleshing out Plan Santa Barbara, a precursor to updating the city’s general plan for the coming 20 years.

This story has been amended to reflect the true date for Planning Commission meeting at which this study is tentatively scheduled for review.

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