CARLSBAD — The City Council approved a loan for $3.1 million to Solutions for Change, a nonprofit that aims to provide permanent solutions for homeless people throughout the county.
The loan will help officials from Solutions for Change purchase and rehabilitate the 16-unit apartment complex, Chestnut Villas on Chestnut Avenue, to provide affordable housing to homeless families.
Solutions for Change has five years to pay off the loan at no interest. After that, the loan goes to a low interest residual receipt loan at 3 percent interest.
The money is coming out of the city’s housing trust funds, which is earmarked for affordable housing for low-income families. Currently the balance is $15.1 million and comes from market rate developers, credit purchases for affordable housing and loan repayments, according to Debbie Fountain, Housing and Neighborhood Services Director.
Part of the loan includes a $454,000 grant as part of the Federal Community Development Block Grant Funds, which do not have to be paid back. The grant was from the U.S. Department of Housing and Urban Development.
Fountain said the 39-year-old building still has about 20 to 30 years of economic life left in it.
Chris Megison, CEO of Solutions for Change said the company aims to get homeless people off welfare assistance and into permanent jobs so they can become a functioning member of society again.
During his 15 years working with the homeless, he said the most difficult thing for people getting back on their feet is finding a decent place to live.
“The one problem that we’ve had is not enough affordable housing,” Megison said. “We can solve a lot of problems for these families, we can get them jobs, we can get them higher education, we can get them healthy but the one thing we can’t do because there’s not enough of it around here, is affordable housing.”
Currently the nonprofit is working with 135 families and 323 children in the North County area.
The families that will be housed in the apartment complex will have already had $30,000 worth of services invested into them by Solutions.
They’re given 1,000 days in the affordable housing and by that time, Megison said, a lot of families are able to move to market rate housing in order to make room for other families. The families are not limited to only 1,000 days, according to Megison. Some may stay for up to three or four years, as long as they’re still employed and sticking with the program.
The motion to loan the funds passed three to one, with Mayor Pro Tem Mark Packard voting against.
He thought the cost for the low income housing per unit was too expensive compared to the city’s past investments.
“We could get approximately three times as many housing units for the same city contribution as we are being asked to do for this,” Packard said.
Councilman Michael Schumacher voted to approve the loan because the funds would be paid back.
The next step is to evaluate whether the current tenants meet the low-income qualifications.
If so, they’ll be allowed to stay while Solutions moves into the relocation phase, to help them find similar housing elsewhere to make room for graduates of their “Solutions University.”
Current tenants who do not meet the low-income qualifications will receive a relocation package to help them find similar housing, as required by law.
