By Jorge Casuso
December 12, 2025 -- The City fund that helps subsidize affordable housing construction in Santa Monica ended the fiscal year with some $14.5 million, enough to subsidize 122 affordable units on City-owned sites.
The City's Housing Trust Fund (HTF) is stretched even thinner when the housing is built on private land, with the fund supporting only 53 homes, according to a staff report on Tuesday's City Council agenda.
The data, which is required to be released under State law, offers a look at how stretched the HTF fund is after being tapped to help keep the cash-strapped City in the black.
A red flag was raised during a special meeting in March focused on balancing the City's budget. Councilmembers Dan Hall and Jesse Zwick pushed for selling City properties as a "last resort" to pump money into the housing fund, which has been used to help pay $230 million in sex abuse settlements.
The publicly owned land includes the former site of Parking Structure 3 Downtown, where the Council approved a 122-unit apartment building for the homeless in April 2024 that is estimated to cost more than $1 million per unit.
The City is also seeking proposals for a prime site in the heart of Downtown at 4th and 5th streets and Arizona Avenue to "provide a minimum of 362 affordable residences" or, if not financially feasible, consider "alternative scenarios to maximize the number of affordable apartments."
The 2.57-acre site is one of three City-owned sites -- which also include Downtown Parking Structure 1 and The Bergamot Station Arts Center -- the Council designed in February as "surplus land" to pave the way for a total of 1,880 affordable units.
"The use of City-owned land for affordable housing provides multiple benefits including maximizing the value of the HTF as most of the (funds) loaned to affordable housing organizations are used to acquire land," staff wrote.
"By contributing land it already owns, the direct cost of acquiring land is eliminated and the City can stretch its HTF’s further to increase the supply of affordable housing."
The monies in the HTF could be needed for affordable housing pre-development costs and/or closing the construction gap for affordable housing developments on City-owned sites, staff wrote.
Based on the six most recent affordable housing developments the City has funded, the average subsidy for those costs was $119,072 per affordable unit, while an average City subsidy for land acquisition was $155,198 per unit.
"Total average City subsidy, including pre-development, construction gap, and land acquisition costs, was $274,270 per affordable residence," staff wrote.
But the City subsidies can be much higher. The City Council in August approved a $19,616,330 loan from the housing fund to Community Corporation to rehab a 76-year-old courtyard building in the Pico Neighborhood with 40 rent control units.
The amount the fund subsidized -- which included an earlier $15,183,670 HTF loan to buy and prepare to rehab the privately owned building -- was $802,875 per unit.
Community Corp, as is the case with all housing trust subsidies, is not expected to pay the full amount of the loan but said it is seeking other funding to lower the City's cost, according to a staff report for the August 12 Council meeting.
To ensure monies in the Housing Fund are spent in accordance with State law, an independent financial audit of the Fund must be conducted annually within six months of the end of the fiscal year on June 30, according to City staff.