PART III: A Roadmap for Affordable Housing & Positive Change

In this, the last part of the series, I wanted to focus on certain hopeful, albeit early, steps that the Council, our award-winning city Housing Authority, and downtown property owners have taken to build affordable housing and improve the downtown corridor. Together these folks believe in a soaring State Street future and are spending real dollars to prove it. 

I sat with our Housing Authority CEO Rob Fredericks to gain his insight. You see, in a 2023 op-ed he wrote: “Relying on the building of expensive, new market-rate-housing projects with only 10-20% affordable units won’t help our lower income local workforce –  nor is it a realistic long-term solution.” In our discussion, he pushed back a bit on his written words but did grant that increased density helped to energize the affordable mandate, saying “we can’t just use a hammer approach” and should also provide “incentives.” 

What everyone agrees on is that the 10% affordable mandate has not fulfilled its promise, and I believe the reason can be found in a commissioned analysis last updated in 2019 by Keyser Marston & Associates. KMA is a respected firm so it’s curious that their assumptions were so absurd, ultimately, leading them to conclude that the 10% mandate was “feasible.” This conclusion was based on the very flawed idea that developers would work on a 5% Return on Cost (ROC) profit margin. Speak to just a few experts and/or do a smidgen of research and you’ll find the real-world ROC target – its universal – is 10%. Fact: If KMA had used a 10% ROC it would have revealed what years of reality has verified, that a 10% mandate was NOT a singularly scaled solution. Numeric games and wasted time. 

Anyway, Mr. Fredericks proposed innovative solutions to permanently fund the construction of 100% affordable units including adding just $7.50 to a $250 hotel room (3% TOT increase) or creating an Enhanced Infrastructure Finance District. These are solid ideas but require a Council that finds consensus and doesn’t default to “NO.” Priorities! 

In 2024, our Council approved a Local Housing Trust Fund. First introduced in the 1980s, the genius of these funds can be found in their ability to multiply each city dollar (if CA helps) by 8x. Establishing the Fund was innovative but now comes the hard part; finding sustained funding that doesn’t include raiding our Reserves, which four of seven councilpersons recently voted to do. Financial planning requires, well, PLANNING and building housing requires the fiscal leadership of a Council majority. I sat with our impressive Finance Director Keith DeMartini, who can provide solid advice. Fact: Budgets are about choices – let’s make some because our much-maligned private sector alone ain’t getting it done! 

November 2026 will be a consequential month in our city’s history as we will need to fill three open/termed-out Council seats and decide on our next mayor.

Another positive change is the public-private partnership between the city and our 386 downtown property owners, the Downtown SB Improvement Association (DSBIA). This nonprofit will find funding through a mandatory property assessment and is dedicated to supporting the downtown business district with a focus on homelessness, safety, and cleanliness where 70% of their more than $2M annual budget will be spent. Because the City, the County, and the Housing Authority are property owners, they too will be assessed albeit not at the level of the owners who will be contributing the lion’s share. The truth is that it costs more to keep a fully closed State Street clean than the city budget envisioned. Many of these owners are multi-generational with a deep pride of ownership and genuinely want to see things shine. Me too!

November 2026 will be a consequential month in our city’s history as we will need to fill three open/termed-out Council seats and decide on our next mayor. These seats carry five-year terms so to all my vitamin D complacent friends I say, “GET INVOLVED.” The Council needs to exhibit professional collaboration because our once world-class town is facing huge challenges. We need to stretch for “EXCEPTIONAL” and build a vision where everyone is elevated. Forget your individual world view (no one cares!) and solve issues. Good luck!  

Jeff Giordano,
Santa Barbara County resident