Living the posh life on a loft budget
Jesus Chavez stood on the second-floor balcony of his Montecito townhouse, reveling in the million-dollar view before him.
Facing west, as far as the eye could see, tall trees and exquisite landscaping surrounded mansions and haciendas on properties the size of parks. A few feet below him stretched quaint Isabella Lane, a narrow street lined with seven large Spanish Colonial homes and eight townhomes that make up the complex where the nursing student lives.
“I feel like we won the lottery!” said Chavez, 33, as he pointed out the development’s private leafy park anchoring the multimillion-dollar homes.
Actually, he and his wife, Estela Chavez, 35, did win a lottery. The couple, along with seven other low- to moderate-income families, were among a pool of about 90 qualified applicants selected by lottery to live affordably among the ultra-rich in the sumptuous seaside community.
The Chavezes are not alone. From San Diego to Santa Barbara, a growing number of builders, large and small, are setting aside affordable units, or even whole buildings, for lower-income residents in high-rent districts.
Figures are not available on the exact number of these complexes in upscale Southern California neighborhoods, but housing experts say their numbers are rising as builders have come to realize that including affordable units in new developments often is the only way a project can win city approval.
The low-income renters who benefit from the arrangement aren’t complaining.
“This is a palace!” said Brian Walsh, a high-energy, tattooed decorative artist who resides with his cat, Babu, in an airy one-bedroom unit filled with art at the Los Altos Apartments.
The upscale, historic building was constructed in 1925 near the old-money Windsor Square neighborhood of Los Angeles. Rents at the complex run from $570 a month for lower-income residents like Walsh, to $5,000 for the “Hearst” apartment, a huge, wood-paneled unit with high ceilings, which William Randolph Hearst had built for his mistress, actress Marion Davies.
Walsh, 43, passed by the construction site for weeks while the historic building was under renovation. Then he tracked down the owners to see how he could qualify for one of the individually designed, affordable units. He applied through the city’s housing department and, in 1999, was among the first to move in.
Never mind that this stretch of Wilshire Boulevard lacks basic amenities for a single guy, such as restaurants or nightlife, or that when he first moved in he got the cold shoulder from some renters paying full freight. Those tenants are gone now, he said.
Today, when he steps into the meticulously refurbished building, the artist soaks up the aesthetics of the lobby’s original tile floors, antique light fixtures and mahogany doors with brass and nickel trim, and he counts his blessings.
“The owners gave people like me, who couldn’t normally live in a place like this, the opportunity to do it,” Walsh said.
That’s exactly what developers Allen Gross, 32, and his wife, Arax Harutunian, 32, hoped for when they took on the Los Altos project in 1995. The abandoned building, home to Betty Davis, Douglas Fairbanks Jr. and Ava Gardner during Hollywood’s heyday, was slated for demolition.
This was an unthinkable prospect to Gross, who is in the business of refurbishing historic buildings. Seeing the potential of the structure, and in favor of including lower-income units, the couple plunged into the arduous process of lining up financing for the project.
They received some funding assistance from the city’s housing department after guaranteeing that about 20% of the building’s 67 units would be set aside for low- to moderate-income renters. Financing in place, they went to work re-creating the grandeur of the building, down to the doorknobs.
“It was a labor of love,” Gross said. “We needed $1,000 or more [a month] per unit for the rehab, but we charge only $500 for many of the units, so we did a lot of begging” for tax-exempt bonds to get the project done. It was completed in 1999.
Shopping out of the area
Anna and Charles Brown, both 79, enjoy the occasional chamber concerts and fashion shows that take place in the lobby. Nonetheless, the couple, who spent the previous 35 years in a West Adams district apartment, have not found convenient shopping nearby, so they drive to Baldwin Hills for clothes, haircuts and line dancing, Anna’s hobby.
“At first we didn’t want to live here, because there isn’t easy access to my friends and activities,” said Anna Brown, a tall, impeccably dressed community volunteer, seated comfortably in her decorated two-bedroom, two-bath apartment. “But I take the bus and walk everywhere now, and like living here.”
Santa Monica, Pacific Palisades and Irvine are among the Southern California cities where housing department officials, desperate for lower-income housing units, are pressing developers to include affordable units in their apartment buildings. Los Angeles County has gained 306,000 people since the 2000 census but has added only 35,300 housing units in that time.
Among the incentives cities, counties and the federal government offer are bond financing, Housing and Urban Development funds for very low-income units and “density bonuses,” city funds awarded to developers who set aside a percentage of units for low- to moderate-income renters, said Ralph Esparza, assistant general manager of the Los Angeles Housing Department.
“These projects generally are built in areas that can generate higher rents,” said Peter Mezza, housing authority administrator of Santa Monica. This offsets the losses owners incur from collecting rents well below market value on the 20% to 50% of lower-income units.
That is the outcome the Quinta Isabella developers are counting on in Montecito, where available land is at a premium and affordable, multifamily housing barely exists.
In 1993, Jim Daub, 55, and Wright Watling, 52, began the application process for a small parcel of land where their 15-home project now sits. The property, in the heart of Montecito, was originally three acres and zoned for one residence.
The pair were told by the county that they could develop high-density housing on 1 1/2 acres of the land and get financial assistance for it if they agreed to set aside 50% of the residences as “affordable,” an unusually large concession.
Daub and Watling agreed to the provision, knowing they could sell the market-rate homes for a high enough price to offset the losses on the affordable units. After four years of financing and city-planning roadblocks, they began construction on the seven two- and three-bedroom homes. The houses are 2,500 to 3,100 square feet, with private patios, custom steel French doors and tumbled-marble tiles. They cost $1.5 million to $2 million.
The development’s eight affordable rental units, whose exteriors resemble their luxurious counterparts, go for $800 to $1,500 a month and are 1,050 square feet. They are attached, have three small bedrooms and come with standard apartment-style interiors, such as linoleum floors and Formica counters in the kitchen.
Winning the ‘lottery’
The Chavezes, who moved there in June when the development opened, are paying about $1,500 a month for their unit, which is considered moderate by Montecito standards. They had lived in a $900-a-month one-bedroom condo in Santa Barbara for nine years before hearing about the Quinta Isabella lottery.
As much as they love the extra bedrooms, built-in appliances and safe neighborhood, there are some drawbacks to living in such a ritzy area.
“Who can afford to buy a loaf of bread here?” Jesus Chavez said, chuckling at the prospect of shopping at the pricey Village Grocery or The Village Cheese and Wine Store nearby. “We shop at Costco in Goleta and buy our clothes in Santa Barbara.”
The family of four accepts the rule about no noise after 8 p.m. but bristles a little at the restriction against barbecuing on the premises. “We grill at the park,” Chavez said.
The two children, Eric, 9, and Hugo, 5, are enrolled at Montecito Union Elementary School around the corner and are among the few Latinos attending the highly rated school, said Dick Douglas, superintendent of the Montecito Union School District.
They have begun making friends there but still feel a little out of place, their parents said. Nonetheless, the family wouldn’t trade their situation for anything, Chavez said.
‘Affordable’ stigma
While seven of the eight condos have been rented so far, only four of the seven homes have been sold at the high-end development, said Daub’s wife, Alison, 38. Some potential buyers attach a stigma to living near the affordable units, she said, despite the fact that the residents occupying the “affordables” earn between $40,000 and $70,000 a year.
“The word ‘affordable’ has a connotation in this community,” Alison Daub said. “It’s a barrier that has to be crossed.”
That barrier may be present in other communities too, but for the residents at Casa Gateway in Pacific Palisades, it is less apparent.
Their complex of 100 affordable condominiums and townhomes, 68 of which are set aside for lower-income seniors, faces the Self-Realization Fellowship Temple and Lake Shrine on Sunset Boulevard, a sylvan spiritual sanctuary.
The housing development is surrounded by multimillion-dollar homes and is about a quarter of a mile from the beach.
Driving by the lushly landscaped, Mediterranean-style three-story complex, no one would guess that the annual incomes of the residents living there range from about $33,000 to $37,000.
Thirty-two of the units are for low-income families.
Mary Breidenbach, 82, bought her condo in 1989 for $82,000 and pays about $500 a month for her combined mortgage and association fees. Today the affordable condo would sell for about $127,000, in a neighborhood where comparable condos fetch $400,000, said Casa Gateway manager Steve Barnard.
The retired secretary, a longtime Westchester apartment renter, had to be talked into the Palisades purchase by her son, who saw the one-bedroom affordable unit as a way to build equity and enjoy a more upscale neighborhood.
Breidenbach is grateful to live in such a plush setting, but she initially suffered some sticker shock. Pulling into the village gas station for the first time, ready to pump her own gas, she realized that all the islands were full-serve (and top dollar). And there was the trip to the local hair salon, where perms cost $100, just a tad high for her fixed income.
“Where I live, there are people struggling for their groceries and others rolling in money,” Breidenbach said. “There’s a little friendly kidding about which income group lives on which floor.”
Grand Tower in downtown Los Angeles is one of two Goldrich & Kest Civic Center developments where low- and moderate-income renters share floors with market-value renters. No one knows who pays $625 for a low-income studio or who pays $2,800 for a market-rate two-bedroom unit.
Regina Kirschenbaum, 35, a longtime Grand Tower resident who works downtown, saw an ad for the residence eight years ago, touting the building’s sauna, gym and swimming pool, and its location across the street from the Museum of Contemporary Art. A struggling student at the time, she called about a rental on a dare from a friend.
“I was told what the rents go for there and nearly fainted,” Kirschenbaum said. “After I regained consciousness, the leasing agent mentioned that they had some affordable units too, and I ran down there and signed a lease that day.”
She bemoans downtown’s lack of excitement -- it’s no Greenwich Village -- but feels lucky to pay only $700 for her one-bedroom apartment, which would cost $1,200 were she not eligible for the set-aside program.
“There’s not a lot of stuff going on here yet; they need a lot more housing and shopping downtown to make it a good neighborhood,” Kirschenbaum said. “But it’s unique to live in such a nice building and pay so little.”
As cities continue to push for lower-income housing in upscale neighborhoods, those who already benefit from such programs appreciate even the unexpected perks.
“After I moved into my condo, I went to an anniversary party in Santa Barbara,” Breidenbach said. “I was introduced by the [disc jockey] as ‘Mary Breidenbach from Pacific Palisades.’ Believe me, that wouldn’t have happened before.”
