CARLSBAD — Solutions for Change has forfeited ownership of 16 low-income apartment units to the city after changes to state funding rules made the nonprofit’s original goal of turning the property into drug-free housing for homeless individuals unattainable.
The nonprofit, which provides services to homeless individuals and families, including housing, counseling services, parenting and finance classes, job skills training and work experience, had owned the property at 945 Chestnut Avenue since 2014.
At the time, the city gave Solutions for Change a $3.1 million loan to rehabilitate and turn the property into permanent, affordable housing for homeless families who had graduated from the Solutions Academy.
As part of the agreement, the city required Solutions for Change to obtain additional funding by the end of 2019 to plan, design, and obtain permits for the much-needed rehabilitation of the property.
Since the nonprofit bought the building, the state has changed its funding model to require homeless programs to use the Housing First approach.
Under Housing First, service providers quickly connect individuals experiencing homelessness to permanent housing without entry barriers like sobriety, treatment or service participation requirements.
Solutions for Change adamantly opposes the Housing First approach and requires its participants to be drug- and alcohol-free and to participate in workforce training. Due to this, the nonprofit could not obtain state funding or fulfill its goal with the Chestnut Avenue property.
The Solutions for Change board decided to turn the property over to the city in exchange for having its loan forgiven. The nonprofit agreed to continue to run the property until December.
According to Chris Megison, president, chief executive officer and founder of Solutions for Change, 945 Chestnut Avenue is the fifth piece of real estate the non-profit has had to give up over the last three years because of the Housing First state funding requirement.
“This Housing First law is decimating the city and a lot of cities around San Diego County,” Megison said at the May 21 council meeting. “I’m sorry we couldn’t get this done.”
The property will continue to include at least 15 affordable units, with the 16th unit serving as an on-site manager’s unit.
With the City Council’s unanimous approval, staff will request proposals to find a new owner to acquire the property and either rehabilitate the 16 existing affordable apartment units or demolish the project and develop a new 100% affordable housing project with potentially more units.
Staff expects to present proposals to the City Council in September. If the city doesn’t find a new owner before Solutions for Change is released in December, it will be responsible for managing and renovating the apartment complex.
Some council members expressed worry that whatever proposals come forward would seek to turn the property into another Windsor Pointe, located near the Chestnut Avenue property.
Windsor Pointe, a 50-unit low-income complex, has been a growing headache for the city and residents alike due to reports from neighbors about high rates of crime, drug use and mental health concerns there.
Windsor Pointe’s developer, Affirmed Housing, could not secure state funding for a veterans-only site, prompting the builder to seek other resources.
Eventually, the company secured $10.1 million from the No Place Like Home program, which requires the apartment complex to be barrier-free and to provide housing for people with serious mental health illnesses like major depressive disorder, schizophrenia, bipolar disorder or post-traumatic stress disorder.
Councilmember Melanie Burkholder asked staff to avoid any proposals that followed Housing First or sought funding from programs like No Place Like Home.
Housing and Homeless Services Director Mandy Mills assured the City Council that such programs would only seek those funding models if they served special populations like those experiencing homelessness, which is not true for the Chestnut Avenue property.
“This is a straightforward, affordable housing complex with existing low-income tenants,” Mills said. “We are not looking to change the population; we want to serve the people currently living there, so there’s no need to seek that funding.”
That was good news for Burkholder.
“I could not physically take — probably mentally at this point — another Windsor Pointe, so it makes me feel good to know this is affordable, and we can market it as affordable,” she said.
Burkholder and Mayor Keith Blackburn also praised Megison and expressed their shared frustration and disappointment with the Housing First approach.
“It’s a shame, it really is,” Megison said.
