Commentary: Rent hikes at Bethel Towers will hurt seniors

July 10, 2012|By Jean Forbath

The Daily Pilot's front-page story (Re. "Council approves tax-free bond to renovate Bethel Towers," July 7) about the $37-million tax-free bond raises many questions.

It stated that, thanks to this deal approved by the City Council, Costa Mesa's low-income seniors would be guaranteed affordable housing at Bethel Towers for 55 years. What it didn't point out is that the project's promise to keep only 20% of the 269 units affordable results in a loss of 215 affordable units!

What was the council thinking? Didn't they question how the units could remain affordable if, as stated in the article, the present monthly income of $80,000 would rise to $250,000? That's an increase of more than 300%, which could only be achieved by raising rents accordingly.

The construction of Bethel Towers was originally funded under Section 202 of a federal housing act, which restricted funding to nonprofits that wanted to provide housing for low-income seniors. Construction loans were given at 3% interest for 50 years. This allowed the nonprofit to charge seniors affordable rent.

If even that low rent was more than 30% of the senior's income, a subsidy under Section 8 would pay the balance. Bethel Towers has worked well for hundreds of Costa Mesa seniors for more than 40 years.

Bethel Towers has obviously been sold to a for-profit developer who promises to keep the complex affordable to low income seniors and yet, if the article is accurate, that would be impossible, except perhaps for 20% of the residents.

Did the council question what the developers determine is an affordable rent for what targeted income — low, very low, moderate? The statement, if the tenant can't afford the rent, the federal government will make up the difference is quite a questionable assumption.

Subsidies are based not only on the person's income but also on rental costs. Traditionally, Section 8 has had limits on the amount of rent someone could pay in order to get a rental subsidy.

Has the 300% increase in rent priced out Bethel Towers residents from a rental subsidy? What kind of magic subsidy is the new developer promising?

He said it was different from the existing subsidy, but there were no details given. Does the council know what the subsidy will be? Did they ask?

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