|
Getting your Trinity Audio player ready...
|
The Mountain View City Council has approved raising the income limit for the Mountain View Whisman School District’s employee housing project, in an attempt to increase the number of teachers and other school staff moving into the building.
The City Council voted unanimously at a Tuesday, June 24, meeting to raise the income eligibility cap for the moderate income units within subsidized housing project from 120% of the area median income to 150%. The council also approved giving tenants three years to vacate if their income later exceeds the cap, rather than one year.
“We should be proud that this project is going forward and that it’s been built,” Council member Pat Showalter said. “It certainly is a lovely building and it’s a great example of the positive collaboration that we can have between the city and the school district.”
With the 150% AMI cap, a family of four could now earn up to $292,812 per year and qualify for an apartment. For a single person, the limit would be $205,000. Roughly a quarter of the apartments will remain set aside as low-income units for those earning up to 80% AMI.
In an attempt to attract and retain employees, the Mountain View Whisman School District built 144 units of subsidized housing at 600 N. Shoreline Boulevard. Within the building, there are 123 units set aside for school district staff, another 20 for city of Mountain View employees and one unit for a property manager.
Tenants began moving into the apartments in February, but the building has only reached 34% occupancy, according to a council report.
The apartments are split into two income categories, with 37 units set aside for those earning up to 80% AMI and another 106 units available to those making up to 120% AMI. The change that the City Council approved on Tuesday won’t impact the 80% AMI units, but will convert the 106 moderate-income units from a 120% to 150% AMI cap.
The council’s decision was partially in response to data showing that finding employees to rent the 120% AMI units has been a challenge. There is a 93% vacancy rate for the 120% AMI units, compared to just 8% for the 80% AMI units.
While the council’s vote raises the ceiling on how much tenants can earn, it won’t change the actual rent prices, which are calculated based on the amount needed to cover the district’s costs.
Currently, there is a wide gulf in the rental rates between the 80% and 120% units. A one-bedroom apartment would cost someone $1,450 per month at the 80% AMI tier, compared to $2,900 at the 120% tier.
Superintendent Jeff Baier told the Voice that while the council’s vote won’t change the rents, it will increase the number of employees eligible to move into the units.
“We believe that one way to get at more completely filling the building is by expanding the pool of possible applicants,” Baier said.
He acknowledged that currently the rental rates may be challenging for those just above the 80% cutoff, but said that the district is seeking to address the issue.
Mountain View Whisman is in negotiations to potentially buy the land beneath the housing project, which it is renting from a real estate developer that is building an adjacent market-rate development.
While the district owns the building itself, it is currently on the hook to pay a $1.9 million annual ground lease. If the district buys out the land, and therefore doesn’t have to pay the ground lease, there’s the potential that rental rates could be lowered, Baier said.
Mountain View Whisman’s employee apartments are tied to the market-rate units that are going up next door. The real estate developer behind that project partnered with Mountain View Whisman so that the school district’s apartments would fulfill a city requirement for 20% of the project’s units to be below market rate. The school district used $88 million in bond funds to pay for the construction of the apartments.
The City Council approved the project in 2019, despite the plan not meeting some of the standard BMR requirements. Notably, the affordable units are in a separate building from the market-rate units, and there were units for incomes of up to 120% AMI, rather than the 80% AMI cap that existed at the time, according to the council report.
Since 2019, the city has updated its BMR program to include rental units of up to 120% AMI. Changing the limit to 150% will once again exceed the current maximum. However, the council report noted that because the project was originally approved with an “alternative mitigation,” the council could make modifications without conforming to the typical BMR rules.
That council report found that approving the increase to 150% AMI could expand the pool of qualified employees, including those who have a partner or roommate also earning income. A household’s total income is considered when applying for the units.
One caveat to the council’s approval of the 150% AMI limit and extended grace period is that it is meant to cover school and city staff, but not members of the general public. If the school district is unable to fill the units with its own employees, there is a “waterfall” provision that would ultimately allow the public to apply. If that were to occur, those tenants would still face a 120% AMI limit and one-year grace period.
