Coachella, in Shift, to Take Low-Income Housing Funds

Deciding not to look a gift horse in the mouth, the Coachella City Council has reversed itself and opted to accept $1.5 million in low-income housing funds from Indian Wells--money that the wealthier city didn’t want to spend within its own borders.

Among the issues was a philosophical one: Should a poor city--Coachella--agree to accept its neighbor’s largess for practical reasons, or reject it on the grounds that Indian Wells should use the money to build more affordable housing within its own exclusive boundaries?

Meeting Tuesday night, the City Council voted 3 to 2 to accept Indian Wells’ offer, reversing its 3-2 decision just a month ago to refuse the funds.

The money reflects profits generated by Indian Wells’ successful redevelopment projects--anchored by two opulent resort hotels and the city’s championship golf courses.

Under state law, 20% of such redevelopment profits are to be earmarked for low- and moderate-income housing projects within the city. However, a separate state law--which has never before been used and expires Friday--allows cities to give away some of their low-income housing money to other cities, if various conditions are met.

Indian Wells already has committed all the affordable-housing money it cares to within its boundaries--about $28 million on two apartment complexes for seniors--and wants to give away the maximum allowed: $1.5 million.

City officials said they would rather give it to Coachella than use it to build still more apartments in their city, which is better known for its gated, country club neighborhoods and which is, by some measures, the wealthiest city in California.

A majority of Coachella City Council members previously had voiced support for the money, but in November, a new council member was elected who opposed the gift, replacing a member who favored it.

On Dec. 1, the Coachella council voted to reject the gift, but Tuesday, its newest member, Rosanna Contreras, changed her mind and the council accepted the money, which is intended for low- and no-interest home improvement loans. Contreras could not be reached for comment Wednesday.

Coachella Mayor Sylvia Montenegro said she still opposes the transfer of funds because Indian Wells “is shirking its responsibility to provide housing in their own city for the service workers who tend to their beautiful homes and golf courses.

“Workers in Indian Wells need affordable places to live--in Indian Wells,” she said.

The Indian Wells City Council will meet today to approve the deal.

“We’ve always felt the merits of this program have been very good, and we’re glad to see that the city of Coachella wants to be a participant in it, to improve their homes,” said Troy Butzlaff, Indian Wells’ assistant city manager.

Before the money is transferred, the agreement must be reviewed by the state Department of Housing and Community Development to ensure that it complies with state law. Conditions are so strict that no other city has used the law to shift low-income housing outside its boundaries.

Indian Wells has long tried to transfer its housing money to other agencies--efforts that were criticized by some housing advocates who said the city was acting in a classist and racist manner, denying housing to many people--including waiters, gardeners and others--who work in the city.

Indian Wells officials countered that the money would go further and do more good in a city like Coachella than in their own city, where housing costs are high.