July 28, 1998

Honorable Frank J. Ochoa, Presiding Judge
Santa Barbara County Superior Court
1100 Anacapa Street
PO Box 21107
Santa Barbara, California 93121-1107

Subject: Response to the 1997-98 Grand Jury Interim Final Report on the

Affordable Housing Process in the County of Santa Barbara

Dear Judge Ochoa:

The Housing Authority commends the Grand Jury for investigating the county’s affordable housing programs. Although our agency is incorrectly identified as an affected county agency in the interim final report, it is important that we provide the following information in response to certain findings and recommendations:

Finding 1 -There is a very narrow range for qualified buyers. Buyers must earn enough to qualify for the loan, but not so much that they fail to qualify as low-income buyers. This factor results in a high percentage of last-minute disqualifications which are expensive to the county and to the developer, since the process must be restarted following each disqualification.

Response – We disagree. The narrow range for qualified buyers has not caused a high percentage of last-minute disqualifications and the process is not restarted. However, the number of disqualifications could be significantly reduced if developers pre-screened interested buyers.

Response to the 1997-98 Grand Jury
July 28, 1998

Page 2

Finding 4 - The 60-day income certification term limit results in eligible buyers having to be re-certified which creates delay and added expense for buyers and the county.

Response – We agree with the finding.

Recommendation 1 - In the South County area, the number of very low-income houses for sale should be minimized as is done by the City of Santa Barbara. This restriction would limit the market to prospective buyers whose incomes better fit the cost of the affordable houses, and so produce fewer disqualifications. [Finding 1]

Response – The recommendation should be implemented. Our research and experience the past 57 years indicates that it is unrealistic to assume that ownership units for persons of low-income are always preferable over rental units. Furthermore, unreasonably high subsidies must be built into very low-income ownership units. Leveraging available resources could provide significantly more units, benefiting more low-income households, including renter households, than the current system of deep subsidies per unit.

Recommendation 2 - The county should require buyers to show evidence of pre-qualification for a loan in the amount necessary to purchase the affordable house at the time they enroll in the lottery. This requirement will discourage casual enrollments and reduce the number of disqualifications. [Finding 1]

Response – The recommendation should be implemented.

Recommendation 4 - The duties of the Affordable Housing Director should include the tracking and monitoring of affordable units to insure that affordable status is maintained after a resale or foreclosure. The county should require that escrow officers notify the Director when a title transfer of an affordable is taking place. Random checks should be made to insure that affordable units are owner-occupied. There should be sufficient staffing to perform these functions. [Finding 3]

Response – The recommendation that a clearly defined system for compliance monitoring be established should be implemented. However, the recommendation requires further analysis to determine a stable, continuing funding source for performance of the tasks. Compliance monitoring is critical to long term success and support for these programs.

In closing, we offer comments on Finding 2, even though we are not the affected agency. Finding 2 notes: "The county has no central affordable housing office that is responsible for all aspects of affordable housing. For this reason buyers and developers frequently feel they are getting the run-around when attempting to comply with county procedures."

Response to the 1997-98 Grand Jury
July 28, 1998

Page 3

We agree that either a single unit in the county or entity in Santa Barbara County should be responsible and accountable for administration and financing of the county’s affordable housing program. The Housing Authority of the County of Santa Barbara is prepared to assist the county in identifying that single unit or entity.


Karen A. Weitzel
Executive Director

Cc: Tim Putz, 1997-98 Grand Jury Foreperson
      Michael F. Brown, County Administrator