June 29, 2022 Breaking News, Latest News, and Videos

City Offers Loan To Santa Monica Housing Authority:

There are a handful of residents in Santa Monica who may face eviction if the Housing and Urban Development (HUD) Department, in light of the government shutdown, did not make their respective Section 8 payments.

Council members unanimously supported a resolution directing City staff to looking into making “available a loan from the City’s General Fund to the Santa Monica Housing Authority, if necessary to assure that no Santa Monica resident Section 8 voucher renters are evicted due to the cut-off of Housing and Urban Development Department funds as part of the federal government shutdown.”

The loan would be made “with the expectation the loan will be repaid once the HUD revenue stream is renewed.”

The council’s action was more of a resolution expressing support of the Section 8 program than a proactive decision to move forward with the recommended loan.

Indeed, no funds were actually released with the unanimous vote.

City staff would return to the dais with information about how any loan made to the Santa Monica Housing Authority would be structured and whether the City’s General Fund could and would be reimbursed by HUD.

Council members Gleam Davis, Kevin McKeown, and Tony Vazquez made the council recommendation.

During his presentation of the City staff direction, McKeown said HUD payments are at risk with government shutdown

“The funds haven’t run out yet and they probably won’t in the short term,” McKeown said. “But besides the threat of people being evicted, there’s also the question of whether our Santa Monica landlords could still trust this program. The federal shutdown has ensured there is at least the possibility in a blip of the payments.”

City Manager Rod Gould said the monthly voucher subsidy of the Section 8 payments runs between $1.2 million and $1.5 million.

“While the reserves would probably run through the end this month, they will certainly run out,” Gould told council members. “Whether or not the federal government would backfill Section 8 voucher payments for the time it suspending its business is unknown at this time.”

Still, Gould told council members City staff backed the council recommendation by Davis, McKeown, and Vazquez.

A concern was raised by the City Attorney about how the loan would be legally structured so HUD would be able to repay the loan.

During deliberations, council member Bob Holbrook said he was worried about the risk of the loan, if made, would not be repaid.

“I’m extremely concerned of us putting up money if there is no guarantee of reimbursement,” Holbrook said, adding he would be more supportive of the recommendation if he were certain any loan made would be repaid.

The loan, if approved, would come from the City’s reserves. As Gould stated, there is just enough in reserve to cover one month worth of Section 8 voucher payments to the more than 1,000 Santa Monica residents who rely upon federal funds to partially or wholly pay the rent each month.

According to a statement released by the Los Angeles County Housing Authority, more than 23,000 households rely upon Section 8’s financial assistance.

Council members hoped the resolution would, at least for now, indicate to Santa Monica landlords and tenants who rely upon Section 8 to maintain faith in the system.

City staff is expected to return to the dais at the next meeting to address the concerns raised on the dais.

Mayor Pam O’Connor was not present at last week’s meeting.

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