When Is the City Going to Repay Money to the Housing Trust Fund?

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(Editor’s note: This is the first in a series that looks at the controversies from last night’s City Council Meeting’s first look at the 2023-2024 budget and the five year forecast.)

At the start of the pandemic in the Spring of 2020, the City of Santa Monica declared an emergency (as did most every municipality in the country). Using its emergency powers, the city tapped into revenue generated by voter-approved taxes and fees designed to create housing, address homelessness and clean water to maintain city services during the economic downturn. In 2021, the city stopped drawing on those funds, and advocates for increased housing were hopeful that the city’s budget for next year would include a detailed plan detailing how and when that money would be restored.

They were disappointed, but some of the city’s largest political players showed up at City Council last night to demand that these monies be returned quickly.

The first speaker in public comment on the budget was Sue Himmelrich, the former Councilmember who served as Mayor from 2020 through 2022. Himmelrich oversaw votes to tap into those funds during the crisis, the vote to promise to repay the funds and the vote to stop tapping into the funds and resume the normal budgeting process. Himmelrich also authored ballot measures on the November 2022 ballot that raised new funds for affordable housing construction.

And while Himmelrich’s tone was pleasant, she clearly wasn’t happy that a firm timeline to repay funds into the city’s affordable housing trust fund wasn’t in the budget.

“We’re trying to solve a homelessness crisis. You solve a homelessness crisis with more housing,” Himmelrich told the current Council. “I want to remind you that there should be a commitment in our budget to repay the (GS and GSH) funds that were diverted.”

Himmelrich was joined by representatives for the Santa Monica Democratic Club and Santa Monicans for Renters Rights (SMRR) who submitted a letter outlining their concerns with the absence of a repayment plan in the city’s budget. 

“By diverting these funds without a binding plan for repayment, we risk undermining the values our residents hold dear,” testified Jon Katz, the president of the club. Katz linked funding for new housing to the city’s core values: providing shelter for the homeless, equitable education opportunities for people of all economic circumstances, and being able. to build and nurture a diverse population.

When it was time for the Council to ask questions of the staff, Councilmember Caroline Torosis wasted no time and asked City Manager David White about the plan to refund the city’s housing trust fund.

White replied the city does have a strategy to restore those funds, and those of the water fund and the worker’s comp. fund; however the timeline is uncertain. First, the city is pursuing litigation against insurance companies that didn’t fund the city as expected during the crisis. Second, the city is selling off some of its publicly owned land and the proceeds of which will restore funding to the various trust funds.

Responding to a follow-up question, White stated that the city is not stalling on any planned affordable housing projects because of missing funds and is moving forward with the “Little Berkeley” project, the replacement of Parking Structure 3 and projects on Wilshire Blvd are about to go out to bid to developers.

While it’s good news that the city isn’t missing housing opportunities because of the housing trust fund funds that were used for something else during the pandemic, White’s response falls short of what advocates were asking for: a firm timeline on when funds will be returned.

Damien Newton
Damien Newton
Damien is the executive director of the Southern California Streets Initiative which publishes Santa Monica Next, Streetsblog Los Angeles, Streetsblog San Francisco, Streetsblog California and Longbeachize.

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