Dear Editor,
$838,710 for a two-bedroom apartment? That is average cost of the 93 units of affordable housing planned for Jubilo Village in Culver City. Yet the approximate average value of a two-bedroom condominium in Culver City is $660,000.
Why is this so expensive? Affordable housing cannot be built if the city cannot afford it. It needs to cost less.
We all talk about the need for “affordable housing,” but we seem to be addicted to over-priced projects with market values way higher than similar properties on the market. This is grossly irresponsible.
In the February 24, 2025, council meeting, our budget challenges were made crystal clear. We have to tighten our belts and we have to ask those that are the beneficiaries of our public funds to tighten theirs, too.
Case in point–the Jubilo Village project. The project cost is estimated to be $78 million for 93 units. That comes out to $838,710 per unit. They are comprised of one, two, and three-bedroom units-so I am using the two-bedroom as the “average unit,” a fair assumption.
Federal funding cuts and the project’s inability to raise funds has led to a $16 million shortfall. In the council meeting, the developers asked the city to fund that shortfall with “loans” that the city finance office preferred to characterize as “grants,” as the money would not likely be paid back. We have a bit over $2 million remaining in our annual discretionary funding. The project developer asserts that they need $4 million committed on or before March 5 (although interestingly, they were OK with kicking the can down the road to the next council meeting, which isn’t until March 10). After that, the project executive asserted that an additional $12 million would be needed in 2027.
I don’t believe it will stop there. After all, we know that the fires and threatened deportations will significantly raise labor costs, and the likely tariffs will substantially increase the cost of materials.
This request is in stark contrast to the budget projections, which show that we are already eating through our reserves at an alarming rate–even without this project. Absent a new 0.25% sales tax (which the council seemed to be counting on), we will have nearly no reserve in ten years. We’ll be essentially broke.
Councilperson McMorrin, in a prior comment, asked that spending in each department be analyzed to look for ways to reduce costs. This is a laudable goal if done across the board, and the purpose of this letter is not to question her motivations (although I do). What was never mentioned during the meeting or the conversation with Jubilo Village’s director was looking for ways how to reduce that project’s cost.
If the average per-unit project cost were reduced to reflect the approximate average two-bedroom unit on the market, Jubilo Village would not need the $16m that they are seeking. At $660k/unit, the total 93 unit project would cost $61.3m-the need for $16m from the city would simply disappear (although, no doubt, increased costs and other overruns will lead to more funding requests). Is it really too much to ask that affordable housing project costs be in-line with the market cost of similar units?
Frankly, I am neither a proponent nor opponent of affordable housing. I live near Tilden Place and have no issue with it. What I do have an issue with is spending that approaches absurdity, particularly when we’re otherwise trying our best to keep our city’s finances in order.
We need to find a way to make this project, and others like it, far less expensive. Be it prefabrication, looking for creative ways to reduce land costs, more modest amenities, or larger-scale bids, we have to do something differently–and do it now to save this project. In the current environment, the federal government will not likely help, and the state’s financial troubles (no doubt exacerbated by the new administration), mean that California probably won’t be able to help much either.
Councilmember McMorrin’s comments about analyzing costs to look for savings are not wrong. But I’d assert that wringing savings from a project that has yet to break ground is likely politically and financially easier than seeking cuts to departments that compromise services provided to our taxpayers and current stakeholders.
If we want to save Jubilo Village, we need to ask its developers to figure out a way to make this affordable housing project affordable to the city and its taxpayers. We need to demand this level of fiscal restraint from the developers. We can’t afford not to.
Gary M. Zeiss