HUD Expected to End Dispute With Builder : Housing: The agency might release $145,000 in frozen funds to the county’s largest developer of low-cost homes. Planning for nine projects had been halted or slowed.
A dispute with the U.S. Department of Housing and Urban Development that has threatened to cripple Ventura County’s only large private builder of housing for the poor is near resolution.
A decision by HUD, expected this week, apparently will prompt the release of $145,000 in federal grants to the Cabrillo Economic Development Corp. in Saticoy, said Rodney Fernandez, the company’s executive director.
The money, frozen since last July, is nearly 40% of the annual budget of Cabrillo, which has gained national attention for innovative farm-worker and “sweat-equity” housing projects. Its controversial Rancho Sespe farm-worker housing project near Fillmore opened last weekend.
“We’ve been under an enormous cloud for nine months,” said Fernandez, 44, who helped create Cabrillo in 1976 while a county official and became its top administrator in 1978.
The funding freeze has slowed or stopped planning for nine new projects of nearly 700 dwellings for families and senior citizens, Fernandez said. And Cabrillo’s eligibility for nearly $200,000 in grants for the fiscal year beginning July 1 has also been left unresolved, he said.
“The point we’ve made with HUD was that not only would they cripple Cabrillo, but that a negative ruling would have national implications,” said Fernandez, who is chairman of a statewide low-income housing association and a director of two national boards that promote low-cost housing.
The HUD grants are essential, Fernandez said, because with elimination of many other federal subsidies in the 1980s, the grants have become the only stable source of income for most private, nonprofit groups that build dwellings for the poor.
The funding dispute centers on whether Cabrillo uses the grants for what HUD defines as administrative purposes instead of actual project development. An adverse ruling would in effect prevent local cities and Ventura County from passing along HUD community development grants to Cabrillo.
A maximum of 20% of such grants can be used for administration, and local governments, which oversee distribution of the funds to social service agencies, usually claim the full 20% for administration. That means that all the money that goes to agencies, such as Cabrillo, has to be spent on activities not classified as administrative.
Scott Reed, a HUD spokesman in Los Angeles, said Friday that the department’s decision on the Cabrillo case is expected this week. He declined further comment.
Marty Shaw-Halloway, the county administrator who for months has argued Cabrillo’s case to HUD, said last week that federal officials seem to have decided in Cabrillo’s favor. “But we haven’t received that in writing yet,’ she said.
To try to force an end to the dispute, Cabrillo this month appealed to three levels of HUD administration, Fernandez said.
Attorney David Kirkpatrick, of the National Economic Development and Law Center in Berkeley, recently gained an informal favorable opinion from the national HUD official charged with interpreting the department’s block grant rules, the lawyer said.
“The problem is that if HUD stops supporting the nonprofits, these low-income projects will never happen,” Kirkpatrick said. “These block grants pay for the staff time to put the projects together.”
In Ventura County, even with some assistance from HUD community development grants, the construction of low-income housing historically has been hit-and-miss--and limited almost exclusively to government housing authorities and Cabrillo.
Large housing authorities in Ventura and Oxnard, the countywide Area Housing Authority and Port Hueneme’s small public agency own and operate a total of about 1,900 dwellings. But they have waiting lists of between two and five years to get their projects built, said Carolyn Briggs, director of the Area Housing Authority.
Cabrillo, which has built or is building 450 dwellings in five local communities, is the only private, nonprofit agency to have survived and flourished with the lean government subsidies of the 1980s.
Many Mansions, which assisted Thousand Oaks in building 29 apartments, is the only other private developer to have constructed any low-cost dwellings in the county, Briggs said.
Cabrillo was founded as the Cabrillo Village Cooperative 14 years ago, when it saved the houses of 80 Saticoy farm workers that were scheduled for demolition. All the houses have since been rehabilitated and enlarged, and about 80 new dwellings have been built around a new community center building.
Expanding its horizons, Cabrillo helped complete a 128-home project in Santa Paula in 1983, where houses were sold for $43,500 each. It began a 62-unit low-income “sweat-equity” development in Moorpark in 1988, where owners have helped build their own homes at a cost of about $65,000. And it completed the first 50 houses in the 100-unit Rancho Sespe farm-worker project just a week ago.
Cabrillo has been successful, Briggs said, because “they have a vision and they’re tenacious. They don’t just talk about housing projects, they make sure they actually get built.”
Perhaps more important, Cabrillo has emphasized design and aesthetics in dwellings for the poor. They do not look like slums.
“You can go out and do a drive-by any day and they’ll look good,” Briggs said. “That’s not the whole picture, but that’s a large part of public perception.”
New homes at Cabrillo Village won state and national recognition for their design in 1989. However, some neighbors of the Rancho Sespe development consider it an eyesore and have dubbed it “Rainbow City” because the houses are colored bright pink, yellow, green and gray.
Recent changes in federal subsidy programs, and a nationwide trend away from large public housing projects, have increased confidence in private developers such as Cabrillo, said bankers who do business with such companies.
“We’re not seeing 600- and 700-unit housing bunkers for the poor as much as we were,” said Steven Hall, vice president of community affairs for Wells Fargo Bank, which helped finance the Moorpark project.
Unlike public housing authorities, which must provide dwellings exclusively for poor people, nonprofit groups such as Cabrillo can gain state and federal tax credits by building “affordable” dwellings for middle-income families along with low-income dwellings. Those credits can be transferred to for-profit partners, helping to lure investors into projects that would otherwise be unattractive.
Such a project is Cabrillo’s proposed 150-unit senior citizen project in Santa Paula, where only about half the units would be for low-income residents.
A new Cabrillo project, a 21-condominium development in central Ojai, is expected to receive another type of subsidy--$250,000 from redevelopment property taxes that state law required the city to set aside for affordable housing. The project concept and the funding tentatively have been approved by the Ojai City Council, City Manager Andrew Belknap said.
Seven other projects are being discussed with officials in five cities, Fernandez said.
