CARLSBAD — An affordable housing project was approved for a $4.25 million loan from the city Tuesday during the City Council meeting at City Hall.
Affirmed Housing will provide 50 rental units in two buildings on Oak Avenue and Harding Street for military veterans, their families and the homeless. The resolution passed 3-1 with Councilman Mark Packard voting no and councilman Michael Schumacher absent.
Packard said he does not support the model, especially the financial concerns, and said the models used and proposed enable those battling homelessness and addiction issues. He stressed several times, though, his support to assist veterans and said any assumptions otherwise is “totally erroneous.”
His three counterparts, meanwhile, applauded the project, although Mayor Matt Hall and Councilpersons Keith Blackburn and Cori Schumacher (no relation to Michael Schumacher) each had concerns about safety, assimilation, cost and the number of studio apartments, which constitute half of the project.
“Being in the service, my heart goes out to them,” Hall said, referencing his own time in the military. I appreciate the fact you are trying to help.”
The total cost of the project comes in at about $21.4 million, with Carlsbad’s slice at about 20 percent, and Affirmed Housing will be pursuing its own funds plus state and federal money to cover the difference.
Per the city’s report, Blackburn questioned why it costs about $427,000 per unit plus only two, three bedroom units and 25 studios. He said if he were asked to invest, he would pass because of the high rate. Nevertheless, Blackburn supported the resolution because he said it helps a struggling population in the city.
“I am concerned about the cost,” he said, “but this project is not about investment. It is honorable and needed.”
As a result of the approval, the city will enter into a 55-year agreement with Affirmed Housing, with specific conditions the properties must remain for low and very-low income individuals and families.
Debbie Fountain, housing and neighborhood services director, said the city has never had a defaulted loan. She said the funds would come from the Housing Trust Fund, which has about $13 million in its account.
In addition, Fountain said the two current units on those sites will be demolished and rebuilt new in two, three story buildings with ground level parking.
When questioned about “skin in the game” by Packard, Lindsay Quackenbush, vice president of development for Affirmed Housing, said his company is providing a needed service and the rate of return is negligible since the project isn’t for-profit.
He said the company has put down $3.2 million to purchase the properties, which he said was a “smoking good price” considering the proximity to the beach, and the lack of upside as no revenue is coming out.
The money, he said, goes back into the upkeep and services provided by Escondido-based Interfaith Community Services and the property management team.
“There is no upside,” Quackenbush said of profits. “There is no revenue coming out.”
Interfaith, meanwhile, will provide health and human services to the residents as they transition off the streets and back into normal life. The nonprofit will assign two case managers, who will assist with job preparation, bills, adapting to home life and many other challenges for residents.