Santa Monica Seniors Get Big Rent Break for New Year

By Hector Gonzalez
Special to The Lookout

January 4, 2016 -- Dozens of low-income seniors in subsidized apartments on Nielson Way in Santa Monica will have more money in their pockets in the new year after renewing lease agreements calling for rent decreases instead of increases.

All of the 75 senior residents of Neilson Villa, an affordable housing community at 3100 Neilson Way, live on fixed incomes.

Their estimated median income is $909 a month, and most were paying 40 percent to 50 percent of that on rent, said Housing Authority spokesman James Kemper in announcing the completion of the new lease agreements last week.

Because the development was due to convert to market-place rents this year, Neilson Villa residents, whose average age is 78.5 years -- although several are 90 and older -- were facing the prospect of substaintial rent increases, said Kemper.

The property's owner had already informed the City of its plans to pay off its federally backed loan and raise rents by $70 per month, making living at Neilson Villa unaffordable for the majority of tenants, he said.

Under the new agreement, however, tenants will now save about $215 per month on average, which translates to a 50 percent increase in their discretionary income, he said.

Under the new deal, HUD established a process in which tenants' former enhanced vouchers were converted to Section 8 vouchers attached to Neilson Villa and administered by Santa Monica Housing Authority.

The so-called Project-Based Vouchers remain with the property, not a particular tenant, “and provide more affordability than enhanced vouchers,” Kemper said in an August staff report.

“Any tenant who is paying in excess of 30 percent of their income toward rent would likely receive a rent reduction with a Project-Based Voucher.”

The result of the conversion was “big savings for the seniors,” which will help them to better afford food, clothing, medical costs, transportation “and other basic household needs,” he said.

Resident couldn't believe they were actually receiving rent decreases, said Igor Kokarev, chair of the Neilson Villa tenant association.

“Until that moment (when leases were distributed), no one believed 100 percent that it was going to happen,” said Kokarev. “People met me in the backyard and asked ‘Igor are you sure the City will do this?’ When they saw the rent decreases in the new (lease) agreements, they wanted to celebrate.”

Kokarev said he wrote two letters to City Councilmember Kevin McKeow “with gratitude from the tenants.”

It took several years of negotiations to complete the deal, said Kemper.

Housing Division officials worked with the U.S. Department of Housing and Urban Development, property manager Goldrich & Kest Industries, LLC and Shapell Properties Inc., the property owner, to develop the new agreement, he said.

Neilson Villa's Section 236 mortage with HUD, originally financed in 1976, had been scheduled to expire earlier this year. That providinged an opportunity for Housing Authority staff to develop the long-term affordability plan for the property and the residents, said Kemper.

In late August, Santa Monica City Council approved the agreement to secure 55 years of affordability, establish an affordability reserve, and proceed with rehabilitation of the Neilson Villa complex, he said.

In October, City staff qualified 75 households at the complex, and the property owner processed new leases, he said. The Legal Aid Foundation of Los Angeles worked with the tenants throughout the process, answering questions and addressing concerns, he said.

“The City of Santa Monica is proud to participate in this partnership,” said Housing and Economic Development Director Andy Agle. “As a result of our efforts, seniors living on very-low fixed incomes are getting a break on rents and the property is guaranteed to remain a community resource for another 55 years.”

Rents will remain affordable in the future, since vacancies at Neilson Villa will be filled from the City's waitlist, said Kemper.

“Our goal to retain affordable housing at Neilson Villa was met through the hard work of our staff at G&K Management Co. Inc. and the dedicated staff at Santa Monica Housing Authority,” said Michael E. Drandell, CPA, Chief Operating Officer at Goldrich & Kest Industries, LLC, a Culver City real estate firm founded in 1956.

“This agreement allows existing and future residents to benefit from the HUD subsidies, and helps the City of Santa Monica meet its low income housing goals,” Drandell said.

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Santa Monica Seniors Get Big Rent Break for New Year