News

Council OKs growing bill for housing project

More backing needed to win subsidy for affordable apartments

The City Council on Tuesday approved an additional city subsidy of up to $4.4 million for a 51-unit affordable housing project downtown that was approved last year.

Developer ROEM corporation said an additional subsidy of $2.2 million is necessary to help the project compete for a lucrative tax credit the project was unable to receive last year. If the project does not win that tax credit, the council approved up to a $4.4 million additional city subsidy to make the project feasible.

The Council voted 6-1 to release the funds, with John Inks opposed. The move brings the city's costs for the $23 million project to $12.5 million, or $245,000 per unit. The four-story building will be located at the corner of Franklin Street and Evelyn Avenue.

Responding to a proposal by Gov. Jerry Brown that would take redevelopment district housing funds and use them for schools and other local services, the City Council also approved a last-minute move to spend $8 million of the Downtown Redevelopment Authority's "housing set aside funds" on the project instead of Below Market Rate housing funds as previously proposed. In a presentation on Brown's proposal at the end of the meeting, City Attorney Jannie Quinn said city staff are concerned about losing $11.2 million in "set aside" funds, and that the proposed state legislation could be passed within weeks that would seek to retrieve such funds spent after January 1, 2011, potentially creating legal battles across the state over the funding of such projects.

Worth the cost?

While more costly than some market rate projects at $450,000 per unit, Mayor Jac Siegel and others have touted the project's quality, which will make it undetectable as affordable housing. That appeases downtown neighbors who have complained that the project would create a slum in their neighborhood and lower their property values.

Inks, who has said he'd prefer a housing policy that makes all housing cheaper, said that he had been "talking to market rate developers building projects cheaper than this one."

"I don't see how spending more money really helps low-income people in Mountain View anymore."

Council member Laura Macias defended the project, saying it would meet the council's long time goal of building affordable housing downtown, while providing a safe place for low-income residents. Several members noted that much of the subsidy would return to the city in loan and lease payments, with better interest than most financial investments.

Council member Tom Means noted that an affordable housing project in Palo Alto will cost $588,000 per unit. "We're a little cheaper at $450,000."

In June the council approved the project with a 65-year lease of the city property it would sit on.

In competing for the tax credit last year, the project ranked lower than two other projects in San Mateo County and Santa Clara County because its 36-percent city subsidy was not high enough, a city staff report says. This year the project is up against another from Palo Alto that is 57 percent, but there may be enough funding for two winners, the report says.

The project's units will be divided equally among three groups, those who make 30 percent, 40 percent and 50 percent of the area median income, which is $96,000 a year for a family of four. Applicants who qualify are chosen in a lottery.

Depending on a family's income level and the size of apartment needed, rents will range from $563 to $1,600 for one-, two- or three-bedroom apartments, saving residents from $215 to $1,157 compared to a market-rate apartment of the same size.

The money is to come from the substantial housing funds that the city has accumulated, now totaling $25.6 million. Council members have complained over the years that the city has not been able to effectively spend that money for affordable housing, which has led the city to make $12 million of it available in a new "Notice of Funding Availability" process to encourage affordable housing developers to come forward and make use of it.

Comments

 +   Like this comment
Posted by Know-It-All
a resident of Old Mountain View
on Mar 9, 2011 at 6:28 pm

According to N.Y. Times Style Guide, "Council OK's growing bill..." should be "Council OKs growing bill..."


 +   Like this comment
Posted by DCS
a resident of Old Mountain View
on Mar 9, 2011 at 9:12 pm

@Mr. Debolt - Don't put words in other people's mouths, the design DID NOT appease the neighbors of this project.


 +   Like this comment
Posted by WhatIsWrongWithSacramento?!
a resident of Blossom Valley
on Mar 9, 2011 at 11:16 pm

Arguments for and against this project aside, what in the hell is the logic behind rewarding cities that provide greater subsidies for affordable housing? Shouldn't they be encouraging private investment? I'd rather the state reward those projects that are able to pull off affordable housing with LESS city money!


 +   Like this comment
Posted by Andrea Gemmet
Mountain View Voice Editor
on Mar 10, 2011 at 10:09 am

Andrea Gemmet is a registered user.

@Know-it-all:
Thanks for catching the errant apostrophe. You're absolutely correct, it's a typo and it should read OKs. It's fixed now.


 +   Like this comment
Posted by OMV resident
a resident of Old Mountain View
on Mar 10, 2011 at 2:53 pm

@DCS - Based on your comments here and on the article a few days ago, it seems pretty clear that your true concerns about this project are not about the design, nor the philosophy of BMR housing, but the impact (real or perceived) that this development has on your own wallet. You complain that the development was not disclosed to you when you bought your unit, and wish you could sue the seller's agent.

While I don't want to sound unsympathetic - I too have worked my entire life (starting at age 12 with a paper route and lawn mowing and going from there) so I know where you're coming from on saving - I have to wonder about the due diligence involved in your unit purchase. The City has talked about locating a BMR development on this site since at least 2005/2006, and had an affordable housing study done before that in 2002 that may have discussed this site. In addition, you had to look at the large, vacant, City-owned lot next door, with very temporary-looking signs on it, and figure that something would be built there sooner rather than later.

It also seems questionable to claim that this one pending development solely or mainly caused the drop in prices in your development - given what has happened to the overall economy and the real estate market the past few years, plus the uncertainty about high-speed rail nearby.


 +   Like this comment
Posted by Steve
a resident of Sylvan Park
on Mar 10, 2011 at 3:14 pm

I work hard, and I totally deserve to live in Woodside. I wonder if they have BMR housing available. Nothing fancy, perhaps just a small cottage. Or maybe they recognize stupidity when they see it.


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Posted by DCS
a resident of Old Mountain View
on Mar 10, 2011 at 8:12 pm

@OMV - I was a first-time home buyer, I had no idea who to talk to regarding development of the parking lot. I read through the 3 inches of documents that were given to me when purchasing (I was given 3 days only), and there was nothing in it that mentioned BMR, including all of the HOA documents from the last 5 years. I called the agency that manages the complex and they had no knowledge of the project either. Obviously I assumed that if anything was going to be built on that property I would have time to sell my unit and leave. In addition, there is a question on the disclosure documents, "is there anything that is going to be built nearby that could POTENTIALLY lower your property values." This was marked no, and there were no additional comments on the matter.

It never in a million years occurred to me that someone in this day and age would build a low income housing project, really the only development that sounds resonable to me is mixed housing - senior/low-income/regular. It seems archaic and overly-harsh to neighbors and the people living in the development to have a stigma of living in low-income housing attached to them.

When offers are rescinded because BMR was disclosed, and the seller accepts a lower offer, this directly lowers the price of other peoples condos in our community.

I hope this offers you some insight into what was going on at our little community.


 +   Like this comment
Posted by Neighbor
a resident of Old Mountain View
on Mar 11, 2011 at 3:06 pm

@DCS I understand your concerns, but I own property within a block of this development and I don't think that this BMR proposal or development has or is going to negatively impact our property values. The problem with property values is a national / international one with complex causes tied to a global real estate bubble. MV has been lucky it has not been hit harder. Unfortunately, condos tend to fall even more in a down market than do single family homes, so that is probably what you have experienced. On the other hand, I think this is a great location to own and the prices will rebound.


 +   Like this comment
Posted by DCS
a resident of Old Mountain View
on Mar 11, 2011 at 3:30 pm

@Neighbor - I hope you are right, and I hope the decline in our property values is temporary, but the facts are this:

offers have been rescinded because of BMR, and this lead to lower property sales, which lowers the property values of other condos in the complex.

Our property values have already taken a hit because of BMR, if BMR doesn't get built, I really don't have much hope that our values will normalize. In conclusion, I don't tihnk it matters either way if it gets built.


 +   Like this comment
Posted by curious
a resident of Cuesta Park
on Mar 11, 2011 at 5:19 pm

This is truly amazing. The City is running a $3 million deficit next year but the Council is spending like $4.4 million is nothing. They even promise to spend more if the developer asks for it. These people with the exception of Mr. Inks who voted against this give drunken sailors a bad name.


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