Building affordable housing can be anything but affordable for developers.
Developers often need some sort of subsidy for affordable projects to pencil out, given the fact that they will receive below-market rents. Yet, the arena for federal income tax credits is becoming increasingly competitive.
Projects are rated on a point system for the Low-Income Housing Tax Credit, which can cover up to 70 percent of hard and soft construction costs. Points are accrued based on matching local subsidies, project cost, energy efficiency and other measures.
“It is so competitive that you pretty much have to get 100 percent of the points,” said Detlev Peikert of RRM Design Group. “Leveraging local funding is important, but we had a significant amount of local funding that went away when the redevelopment agencies dissolved.”
Only around 50 to 60 percent of those who apply for the highest threshold of the LIHTC, or 9 percent credit, are approved, he said.
Peoples’ Self-Help Housing, the Housing Authority of the city of Santa Barbara and RRM have partnered to utilize federal tax credits for several projects like the 90-unit affordable senior housing development at 251 S. Hope Ave. in Santa Barbara.
“There is a lot of work being done, but we’re not coming close to meeting the need,” Peikert said.
The state and tri-county region have a woeful undersupply of housing, which handcuffs economic growth. More than 1.5 million of California’s lowest-income households (earning less than 50 percent of the area median income) do not have access to affordable housing, according to the California Housing Partnership Corporation.
There isn’t a single county in the state that has a sufficient number of affordable units for the lowest-income households, the CHPC found.
“Developers are scrambling to find different sources of funding,” Peikert said.
Pacifica Hotels debuted the newly renovated Oceanpoint Ranch in San Simeon.
Pacifica invested $4 million to renovate the 61-room “ranch-chic” resort on Moonstone Beach, formerly known as San Simeon Pines Seaside Resort.
A grab-and-go restaurant and landscaping upgrades are still to come in 2017.
For the past three years, Pacifica has focused on refining and growing its portfolio through strategic asset acquisitions, full-property renovations and transitioning branded properties to independent status.
Pacifica Hotels now owns and operates six properties along Cambria’s Moonstone Beach and 15 in the Tri-Counties totaling 34 hotels, most along the California Coast.
Serving the homeless
The Community Action Partnership of San Luis Obispo County broke ground on its new homeless services center at 40 Prado Road in San Luis Obispo.
The Central Coast community raised about 80 percent of the $5.4 million needed for the land and construction costs. They are shooting for a fall 2017 opening.
It will replace two existing homeless services facilities currently in operation: the aging Maxine Lewis Memorial Shelter and the Prado Day Center, which has a lease expiring in 2018. The center will combine the services of both facilities, streamlining current programs with significant cost saving over time, CAPSLO said.
New digs in Camarillo
Web design and search engine optimization company Blue Fusion Digital recently opened a new office at 360 Mobil Ave. in Camarillo.
Blue Fusion founder and President Shane Hampson started the company in San Diego, took it to Plano, Texas and recently moved the company back to his roots in Ventura County.
“The reason I started an office back in Camarillo is because I grew up in Ventura County, it’s where I have a lot of family and friends,” Hampson said. “I know there are many great local small businesses that we can help and we look forward to doing so.”
Oxnard industrial sale
A 40,000-square-foot industrial property in Oxnard was sold for $2.8 million.
Mercantile Instinct LLC purchased the building at 1278 Mercantile St. from a private seller, according to Marcus & Millichap, which coordinated the sale.
Granite Peak scales up
Santa Barbara real estate advisory firm Granite Peak Partners is moving to a bigger office at 310 E. Carrillo St., Ste. B.
The move from 133 W. De La Guerra St. will let the company add more employees and better meet client needs, the company said.
• Contact Alex Kacik at [email protected]