City of Santa Barbara to Loan School District $1M for Employee Housing at Former Parma School Site

A decades-vacant piece of school district property on Santa Barbara's Eastside is moving closer to becoming workforce housing for the very educators who have struggled to afford living in the city where they teach.

The City of Santa Barbara is poised to loan $1 million to the Santa Barbara Unified School District to help build 30 units of employee housing at the site of the former Lawrence M. Parma School at 915 East Montecito Street, according to the Santa Barbara Independent. The city's Finance Committee approved the loan this week, and an ordinance authorizing it is scheduled for the City Council's consent calendar next Tuesday — the final step before the funds can flow.

Why the City Is Stepping In

The loan would buttress a partnership between the district and the Santa Barbara Housing Authority, which will develop and manage the 30-unit project and serve as the de facto landlord. The money comes from the city's HOME Entitlement and Program Income Funds left over from prior years, and carries a 30-year term with a 3 percent interest rate, according to city documents cited by the Independent.

In exchange, the development must keep its affordability restrictions in place for 90 years — an extraordinarily long commitment that would not expire until 2116. Units will be designated for low-income district employees earning between 30 and 60 percent of the area median income.

The need is well documented on the district's own surveys. When school staff have been polled in past years, more than half identified as low-income or very-low income, and officials found the greatest housing demand came from smaller households rather than large families — a detail reflected in the project's unit mix.

What the Project Looks Like

Plans call for a three- and four-story apartment building containing 10 one-bedroom units, 12 two-bedroom units, and eight three-bedroom units, along with a community space, per the city staff report.

The project has been several years in the making. Superintendent Hilda Maldonado, speaking at the project's first community meeting in 2024, said maintaining a vacant building was a waste of land, time, and money for the district. Rising rents citywide — and hardships teachers voiced during contract negotiations — have kept workforce housing near the top of the district's priority list.

"We are deeply grateful to the City of Santa Barbara for supporting our educators who take care of our children every day," Maldonado said in a statement. "Housing affordability is one of the greatest challenges facing our staff. Through this approval to develop workforce housing at the Parma site, the City is taking care of our educators who deeply deserve to be valued."

A Site With History — and Neighbors With Questions

The Parma School closed in 1989 and operated as a children's center for a few years afterward, but has sat vacant since — a stretch of more than three decades for a parcel sitting across the street from the Trader Joe's on Milpas Street in one of the city's most walkable Eastside corridors.

The location is a selling point for supporters and a sticking point for some nearby residents. Neighbors have raised concerns about impacts to traffic and street parking, familiar worries in a neighborhood where curb space is already tight. The Housing Authority has told the community it takes pride in being a "good neighbor": although parking is not required for affordable units, the project will include 40 parking spaces, and a traffic analysis will be conducted.

The project is currently working its way through the city's permitting process, with construction expected to be completed by May 2029, according to city documents.

A Warm Reception at City Hall

The proposal drew notable enthusiasm from councilmembers. Councilmember Wendy Santamaria called it exactly the kind of project the council wants to see.

"We have so many of our teachers and educators and other education staff that just cannot live anywhere near the schools that they are serving and the children they're educating," Santamaria said.

That sentiment reflects a broader problem across the 805 region: school districts from Santa Barbara to Ventura have wrestled with recruitment and retention as housing costs push educators to long commutes or out of the area entirely. Teacher housing proposals have increasingly been floated as a practical fix, and Santa Barbara's use of leftover federal HOME funds gives the city a relatively low-cost way to lever a city asset into long-term affordable units.

If the council signs off Tuesday — the item sits on the consent agenda, meaning it is expected to pass without extensive debate absent a pull for discussion — the loan ordinance would clear the way for the district and Housing Authority to continue pushing the project through permitting toward a 2029 completion.

For Eastside neighbors, the next opportunities for input will likely come as the traffic analysis proceeds and the permitting process advances. For district employees, the vote represents something more concrete: a path, however gradual, toward living in the community they serve.

"Through this approval to develop workforce housing at the Parma site, the City is taking care of our educators who deeply deserve to be valued," Maldonado said.