The City has implemented a comprehensive program to encourage the preservation and construction of affordable housing. Santa Barbara's housing program consists of several activities. Through most of these activities the City provides financial and/or land use incentives to a developer in exchange for a recorded agreement that some or all of the housing units will remain affordable to a certain income group (for example, "low-income" or "moderate-income") for a specified number of years.
The program solicits and evaluates proposals involving requests by developers for financial assistance from the City for the construction of new housing units or the rehabilitation of existing housing units. This result in the creation of housing that is affordable to low- and moderate-income people and that will remain affordable for 90 years pursuant to an agreement recorded against the title.
The City primarily provides direct financial assistance to nonprofit housing developers. (For-profit developers generally participate in the density bonus program described below.) The City generally provides gap financing that is the last portion of financing that enables the developer to create a project with rents and home prices low enough to be affordable by low- and moderate-income households. Financial assistance generally comes in the form of a 30-year, three percent loan.
Through the City's density bonus program the City allows development of a greater number of units than would normally be allowed under the existing zoning. As a tradeoff, some or all of the units on the site are subject to rent restrictions or resale controls which provide for continued affordability to low income renters or moderate income purchasers for at least thirty years. Since the beginning of the City's Density Bonus Program in the early 1980s, the Planning Commission has approved 58 projects with density bonus. These projects contained approximately 415 bonus units and 961 affordable units.