After 30 years, rent restrictions are ending on 64 apartments in the Santa Fe Ranch complex in La Costa because the building owner has paid off the tax-exempt bonds and is no longer required to provide affordable housing.
Residents in those units were notified a year ago that beginning June 1 they would have to pay the market-rate rents for their one- or two-bedroom apartments. That means an increase of $200 a month or more, and additional utility costs that average $50 to $60 a month, they say.
“It’s very disruptive and expensive,” said resident Mary Lucid, a retiree on a small pension and Social Security. “I moved here because I thought Carlsbad had secure affordable housing.”
A city housing official said the residents are in a unique situation, but that the property owner has more than complied with local and federal regulations for low-income housing.
“Everyone on staff completely understands how disappointing this is to the residents,” Carlsbad Housing and Neighborhood Services Director Debbie Fountain said in a letter sent to residents and later to The San Diego Union-Tribune. “We do know that it puts many residents in a difficult position.”
It’s up to each resident to try to find new affordable housing, or to pay the higher rents.
About 2,500 low-income apartments have been built in Carlsbad since the mid-1990s, Fountain said by telephone last week, but there’s still not enough for everyone who qualifies.
Every development with low-income housing has a waiting list of applicants, she said, and it can take a year or longer to get in. Also, when an opening is announced, the applicant has a limited time to accept and move in, and that can cause difficulties.
Carla Hunt, a Santa Fe Ranch resident for about four years, moved out Oct. 1 after receiving the one-year notice last June. She had been on multiple waiting lists for years, and when something finally opened up she took it.
Now her old landlord is demanding $2,000 for having broken her lease, she said, and she’s getting help from an attorney to settle the issue.
“It really hit me hard,” said Hunt, who lives with her autistic son. “It was like a bomb dropped on me.”
Santa Fe Ranch property manager Elliott Bickle declined to comment on the situation and referred calls to the management company, Pinnacle Living. A Pinnacle spokeswoman in Texas emailed a brief response confirming that the low-income program was expiring, but said the company would have no further comment.
Both Lucid and Hunt are Section 8 housing recipients who receive vouchers from the federal program that cover more than half of their rent.
The amount of financial assistance depends upon a recipient’s income, family size and other factors, and can vary widely.
Lucid, a 70-year-old retiree, said she pays $413 a month in rent for a one-bedroom apartment with a market rate of about $1,200. She will continue to get the Section 8 housing voucher, but her share of the rent will increase by $245 a month after June 1. She said she can’t afford it.
Plenty of other residents, especially seniors on fixed incomes like hers, are in similar situations, she said.
About half the low-income tenants at Santa Fe Ranch are not in the Section 8 program, and they will have to pay the full market-rate rents after June 1. All the tenants there get a slight discount on the rent if they sign a six-month or one-year lease. The Section 8 participants can take their housing subsidy to any apartment in the state that qualifies for the program.
Fountain, the Carlsbad housing official, said the conversion of affordable-housing units to market-rate units is unlikely to occur again any time soon in Carlsbad.
The 320-unit Santa Fe Ranch complex was built more than 30 years ago with tax-exempt, multifamily housing revenue bonds, Fountain said. The bonds could have been paid off five years ago, but the owner received an extension.
“We don’t have any other projects that are nearing their expiration dates,” Fountain said.
Most of Carlsbad’s low-income housing has been built since 1993, when the city approved its “inclusionary” housing ordinance. The ordinance requires builders of multi-unit apartment complexes to include low-income housing and to keep it that way for 55 years, which is generally considered the life of an apartment building.
Also, Fountain said, at the end 55 years the city has the option to purchase the low-income units and keep them as rent-restricted properties. Another possibility, Fountain said, is that by then the property will need significant improvements, and the owner will take another tax-free loan to pay for the work and that would require them to continue the rental assistance program.
The owners could repay the loans or bonds early, she said, but there’s no incentive to do that because the owner would lose the tax benefits that come with the debt.
Fountain said she understands how the Santa Fe Ranch residents feel about the rent increases, but that there’s nothing the city can do because the federal Internal Revenue Service controls the program, not the city.
Anyone who switches to a different rent-restricted apartment can be confident they will keep it for years, she said.
“This was the only one,” she said. “We don’t have any others that are pending."