Santa Barbara Houses Homeless
through a Tax Credit Project

Photo: El Carrillo Spanish-style buildings
El Carrillo provides high quality permanent housing for the homeless. Its location near the heart of downtown Santa Barbara enables residents to easily walk, bike or bus to work, shopping and entertainment destinations.

The Housing Authority of the City of Santa Barbara won the National NAHRO (National Association of Housing and Redevelopment Officials) Award of Excellence in 2007 for their work on El Carillo, a development that houses formerly homeless people.

Acting as land owner, developer, and now operator of this project, the Housing Authority recognized a critical need and responded. However, to accomplish this project the PHA created strong partnerships with the City of Santa Barbara along with its Redevelopment Agency and Planning Commission. The Redevelopment Agency and City provided needed subsidy financing for the land acquisition and subsequent funds to cover a portion of the construction costs in the form of a residual receipts loan.

The Housing Authority of the City of Santa Barbara acquired the property in 2002. The site was previously underutilized with a parking lot, taxi dispatcher and an older vacant building that was used as an architect's office. The completed El Carrillo development is a Low-Income Housing Tax Credit project. The project also uses HUD Section 8 funding.

It is comprised of 61 studio units, a 2 bedroom manager's apartment, a community room and a program room for service delivery. The studios are small at 254 square feet. For a city of Santa Barbara's overall scale and old age, the project is considered large, relatively dense (122 units to the acre.) It demonstrates how to best capitalize on in-fill housing opportunities, taking full advantage of a rare and precious downtown resource - developable land.

El Carrillo is a beautiful project comprising several building connected by pleasant courtyards and walkways (or paseos). The buildings' various shapes, sizes and orientation on the site, and decorative details help conceal the project's high density. The open layout of the units, their ample light and air circulation and their direct placement along open courtyards and paseos make the small units extremely livable. All of the units are affordable to very low income households with maximum incomes and rents as follows:

Units Income Limits
One-Person Household
Max. Rents *
7 units 30% of average median income (AMI) ($13,830) $345
7 units 35% of AMI (16,135) $403
47 units 40% of AMI ($18,440) $461
*Section 8 HCV and Shelter Plus Care subsidies to reduce rents to 30% of income available to qualified tenants

El Carrillo is a Low-Income Housing Tax Credit (LIHTC) Development. Created as part of the Tax Reform Act of 1986, and made permanent in 1993, the Low Income Housing Tax Credit (LIHTC) under Section 42 of the Internal Revenue Code is designed to help meet a growing need for affordable housing in the United States. Nearly one million affordable housing units have been created through the use of the credit since it was enacted. Unmet demand for such housing continues to far exceed the supply.

Under the LIHTC program, each state receives a specific tax credit per person residing in the state. Individual states determine how the credits are allocated, based on a plan adopted by a state's housing agency. Qualified new construction and substantial rehabilitation projects are eligible for either a 9 percent or 4 percent tax credit; based upon eligible project costs each year for 10 years. El Carrillo is a 9% tax credit project.

The LIHTC program is attractive because it can be leveraged with private capital to finance new construction, or for the acquisition and rehabilitation of existing affordable housing. Furthermore, the tax credit enables properties to be operated at below market rents and still produce competitive returns that attract investment.

The success of El Carillo development will be featured on Huell Howser's "California's Communities" show. It will air on two Thursday nights in July - the 9th & 30th. The shows will air at 7:30 pm on KCET.

The show is devoted to the El Carrillo residents. The thoughts and experiences of these formerly homeless folks who now live at El Carrillo is focus of the program. The show will help demonstrate how developments like El Carrillo can help end homelessness.

Congratulations to Robert G. Pearson, Executive Director/CEO, Housing Authority of the City of Santa Barbara and his staff for this successful project.

Content Archived: August 17, 2011