‘It’s like winning the lottery’: Mountain View residents spend years waiting for affordable housing

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When Hilina Tekie was handed the keys to her new condominium, it was one of the proudest moments of her life. She had been working towards that day for years, living frugally, accumulating savings and keeping meticulous financial records so that she and her three children could put down permanent roots in Mountain View.

“Unless I hit the jackpot, I’ll never move out. Why would I?” Tekie asked, laughing.

Tekie’s story is not a common one in Mountain View. She is one of the few who has managed to leverage the city’s housing resources to purchase her own home – an exceedingly rare opportunity for low-income households.

Not that long ago, Tekie was on the verge of leaving Mountain View, despite having spent years working as an instructional assistant for the Mountain View Los Altos High School District. She was divorced and living with her three children in a one-bedroom apartment, just 600 square feet in size.

It was all Tekie could afford in a city known for its expensive rents. Then, a colleague told Tekie about the city’s Below-Market Rate housing program.

The goal of the BMR program is to provide affordable units within new housing developments, requiring that market-rate developers set aside at least 15% of their units for low and moderate-income households. These affordable units are distinct from fully subsidized projects, including how the lottery is administered.

Right now, there’s just a challenging environment for any type of residential development, whether that’s market-rate or market with BMR units or affordable housing.”

Wayne Chen, Mountain View Housing Development Director

At the time, Tekie was only looking at rentals. She wanted to stay in Mountain View where she worked and her children attended school. So she filled out a BMR housing application and, by luck of the draw, was selected about a year later to move into a two-bedroom apartment.

This was in 2020, and it cost $1,817 per month not including utilities, plus a $300 deposit, Tekie said. It was a huge discount relative to rents across the city, which exceeded $2,800 at the time despite protections under rent control.

“It was like the best thing that ever happened to us because it’s one of these luxurious apartments, and the rooms were bigger and we got two bathrooms. It was perfect for me and the kids at the time, and we were very happy,” Tekie said.

Waiting for affordable housing

Tekie joked that she would only leave Mountain View if she won the jackpot, but in many respects, she already did when she got into a BMR rental and then later on, when she purchased a condo.

There are 216 BMR units in Mountain View’s existing housing stock, the vast majority which are rentals, according to the city. Demand for affordable housing far exceeds the supply, and it’s not unusual for applicants to wait much longer than a year to get off the waitlist.

It took Mountain View resident Sandra Esparza about six years before she and her mother got into a one-bedroom rental. Her sister had been on a waitlist for eight years, Esparza said, noting that there were some complications with her application.

Malia Pires, another Mountain View resident, was on the waitlist for about three years before she and her four children were accepted into a two-bedroom BMR rental, she said.

According to the city, three years is the average amount of time to get into a BMR rental, with more than 4,000 households on the waitlist – which operates as a kind of interest list for applicants.

Once people get into a BMR unit, they tend to stay in it. Since 2021, the average turnover has been seven units a year from the existing housing stock. The number of available units increases significantly, however, when new market-rate developments are built.

This past fiscal year, there were 1,742 applications for 14 BMR units, according to the city. The previous year, there were 833 applications for 46 BMR units. The supply was higher, as 35 of these units had come onto the market as new housing.

In another much-needed boost, Mountain View recently added 30 BMR units to its housing stock. Still, the supply is not keeping up with demand for affordable homes.

Building affordable housing

Mountain View has kept track of its housing units since the BMR program got its start in 1999. At the time, developers were required to include 10% of their units as affordable, but most opted to pay in-lieu fees instead.

About five years ago, Mountain View raised the threshold for developers to designate at least 15% of their housing as affordable and increased the in-lieu fees.

Very few BMR units were built during the program’s first two decades of existence. Rental units were non-existent until 2015, and there was just a smattering of ownership units getting built for buyers, according to data provided by the city.

In recent years, the supply has increased, particularly of BMR rental units. There are now 202 rental units and 14 ownership units, with many more in the pipeline.

Last December, the city presented data showing that there are seven anticipated rental projects that are expected to create 2,167 units, with 298 slated as BMR units, or 14% of the total share.

The number of BMR ownership units, while substantially less than rentals, is expected to increase six-fold. There are nine projects in the pipeline that will create 458 units with 84 slated as BMR units, or 18% of the total share, according to a city update.

These figures do not include projects that are subject to different program requirements, like those that fall under builder’s remedy or housing in North Bayshore, which are expected to create more affordable housing opportunities.

Still, while Mountain View is planning for more BMR units to get built, larger economic forces are a factor. High interest rates have been an issue for builders, raising costs and contributing to a slowdown in housing construction, according to a state budget report in May.

“Right now, there’s just a challenging environment for any type of residential development, whether that’s market-rate or market with BMR units or affordable housing. And from our understanding, interest rates are just a huge driver,” said Mountain View Housing Development Director Wayne Chen.

But this could change, as the Federal Reserve slashed interest rates by half a percent in September, possibly spurring future housing growth, according to industry trade reports.

It’s also important to take into account the city’s wider context of housing affordability, Chen said. Mountain View has a strong track record of supporting all-affordable housing projects, which are separate from the BMR program. These projects tend to serve lower income levels and typically are built by nonprofit developers who have experience providing support services for special needs populations. They also tend to receive funding from the city, unlike market-rate developments.

Taken together, the city’s total affordable housing, which includes BMR units, will create nearly 1,700 units by the end of the decade, Chen said.

“(This) is a pretty big achievement for a city of 12 square miles because it took a while to get to the 1,700 existing units. In a much shorter period of time, we would be doubling that amount,” he said.

Navigating affordable housing

For many Mountain View residents, the wait is not the only problem when it comes to affordable housing. So is learning how to navigate the bureaucracy of the BMR program.

Reyna Dominguez has lived in Mountain View for more than 20 years and for most of that time, has struggled to find affordable housing. Her family was displaced twice from rent-controlled apartments on Rock Street, Dominguez said. On both occasions, the apartments were redeveloped into rowhouses.

About two years ago, Dominguez learned about the city’s BMR program and applied for a two-bedroom apartment, but her number was “skipped,” she said. Initially, Dominguez did not understand why, but later learned that her family did not qualify because of their income level.

In Mountain View, market-rate developers are required to set aside rentals to be affordable to those making between 50% to 120% of the region’s median income. In some cases, developers have gone lower offering rentals at 30% AMI. For ownership units, it is 80% to 120% AMI, with some upward adjustment in the BMR requirement for rowhouses and townhouses.

In Santa Clara County, the area median income for a household of four is $184,300.

Dominguez works as a nanny and her husband is a janitor. They did not qualify for the rental because it was for households earning 50% to 80% AMI, or those who made at least $90,000 a year – much higher than what her family earned, Dominguez said.

Knowing what programs she is eligible for is not the only challenge for Dominguez. Applying to affordable housing also requires technological proficiency. It’s not always clear to Dominguez how to submit the required information online or how to upload documents, a situation that is particularly difficult for her, as English is her second language. 

“Many people like me don’t know how to deal with the Internet,” Dominguez said, adding that she relies on her children for help a lot of the time.

Administering affordable housing

Three years ago, Mountain View partnered with HouseKeys, a third-party provider, to help with the administration of its BMR program.

HouseKeys occupies a particular niche in the affordable housing landscape. It doesn’t set policy or build or price homes. Rather it works with cities and developers to help them meet their affordable housing commitments. But its primary focus is getting people into affordable homes.

“Our number one concern at all times is always the household, just helping the household navigate all the cities in our platform, across region and jurisdiction and different projects, whether it’s ownership or rental or finance,” said HouseKeys CEO Julius Nyanda.

From the applicant’s perspective, the process starts with the HouseKeys online portal, which has them set up an account with their household information. They then receive an application ID and are able to enter drawings for housing opportunities.

You have to deal with the city, you have to deal with the builders, you have to deal with your bank, you have to deal with HouseKeys, there are different people you have to deal with so the process takes longer.”

Hilina Tekie, Owner of BMR Condo

When a unit comes on the market, an applicant is notified by email and can enter the drawing, although they only are eligible for one drawing at a time. They then receive a ranking based on a random lottery and city preferences. In the case of Mountain View, applicants who live or work in the city receive priority and can move up the list. Files are reviewed according to ranking order and if approved, the applicant is offered a contract for the available unit.

Nyanda described HouseKeys as “the voice of reason” that helps applicants navigate the different eligibility requirements and selection standards for each city.

But while program administration is the primary touchpoint that connects people to homes, it tends to be an afterthought, Nyanda said. It rarely gets the same amount of attention as housing policy, production or preservation. People just don’t get excited about it, he said.

Still, HouseKeys has made inroads in the Bay Area. It got its start in Morgan Hill in 2015, and since then has expanded to 19 other jurisdictions. Over the years, it has improved its software and services, making it easier for people to find and apply for affordable homes. But it still has a long way to go, Nyanda said.

Applicants need a lot of support, education and counseling, especially when navigating BMR programs for the first time. With just 22 staff members, customer service is always an issue, Nyanda said.

“What people most complain to the cities about, what we get the most input and feedback about what we should improve is essentially customer service, outreach, more resources, more people to pick up the phone. That is program administration,” Nyanda said.

From renting to owning an affordable home

For Mountain View resident Hilina Tekie, the process of getting into an affordable rental was fairly straightforward. It just required some waiting, she said. But it was an entirely different experience when she applied to become a homeowner of a condo.

“You have to deal with the city, you have to deal with the builders, you have to deal with your bank, you have to deal with HouseKeys, there are different people you have to deal with so the process takes longer,” she said.

The impetus to apply for the BMR ownership program came from Tekie’s changing family circumstances. Her children were growing up and their two-bedroom apartment was starting to feel cramped. There were few options for a three or four-bedroom rental in Mountain View so Tekie decided to try her hand with ownership opportunities instead.

Compared to BMR rentals, there are far fewer ownership units on the market. The vast majority of new residences, about 80%, are built as rentals, according to Nyanda.

The demand for home ownership is not quite as high either. In Mountain View, there are about 3,000 households on the waitlist for BMR ownership units, as compared to about 4,000 for rentals, although there is some applicant crossover, Nyanda said.

Initially, Tekie felt well-prepared to apply for the BMR ownership program, as her paperwork was in good order. What she did not anticipate was the lack of response from everyone else involved in the process, which held up her condo approval numerous times, she said.

“When one person replies, the next one doesn’t. And that day goes by, two days, then a week, that matters to families,” Tekie said, noting that she had to submit a loan extension and pay late fees because of the delays.

Tekie also took on a second job to accumulate more savings, which was another stress point, she said. The program requires that applicants put down 3% to 5% of the purchase price from their own funds. It required a lot of discipline, Tekie said, noting that she also had to apply for a loan and report all of her transactions leading up to the condo sale.

Now that Tekie has been through the process, she has some thoughts on how to make it easier for others. Her number one recommendation is that HouseKeys and the city communicate better with applicants. 

They also can prepare the paperwork for selling a home ahead of time, even before selecting households. What could have happened in four months took a year, Tekie said. 

For those seeking a BMR home, Tekie emphasized the need to be proactive. She said she called her loan officer nearly every day, asking about the status of her application, as well as the next steps to finalize the sale.

The process is the challenging part, and it’s a long wait to get into an affordable home, Tekie said. “But once you’re in it, that’s it. You don’t have to deal with anybody. You just live your life.”

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