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Publication Date: Friday, June 22, 2001
"What we're trying to do with the trust is find a new way to finance projects that could create a new regional approach."
@dropname:Chris Block, executive director, Housing Trust of Santa Clara County
Council considers donation to housing trust
Council considers donation to housing trust
(June 22, 2001)
Fund, recently part of council controversy, gets support
By Justin Scheck
The City Council Tuesday discussed whether to contribute city money to the Housing Trust of Santa Clara County, a fund supported by public and private donors seeking to raise $20 million for affordable housing projects.
Council members voiced few objections to giving money to the fund. Mountain View is one of only five cities in the county that have not contributed.
The fund made headlines in Mountain View last month when Mayor Mario Ambra tried to take disciplinary against Council member Rosemary Stasek for allegedly soliciting Microsoft for a donation to the fund inappropriately.
According to Chris Block, the executive director of the trust, the fund has amassed $18.5 million in public and private donations since its founding in 1999.
"What we're trying to do with the trust is find a new way to finance projects that could create a new regional approach" to solving housing problems, said Block.
The council reviewed the item in study session, and therefore did not take action. But council members discussed making a pledge of $500,000 of funds that are already earmarked for housing.
These funds would most likely come from revenue earned from the city's below-market-rate (BMR) ordinance, which requires residential developers who do not include low-cost units in their developments to pay in-lieu fees to the city. Housing set-aside funds from the downtown redevelopment district might also be contributed to the trust..
A city staff report outlined four basic funding options the city could follow, all of them involving money that is projected to come in over the next year from a number of residential projects.
According to Block, once the fund reaches its $20 million goal it will start granting loans of up to $500,000 to affordable housing projects. A city can require that its donations be used to fund projects within its boundaries, and most of the cities that have contributed have made this stipulation.
Stasek said that despite these requirements the fund promotes a regional approach, because about two-thirds of the money comes from private industry and can be dispersed to projects around the county.
Block explained Tuesday that Mountain View's efficiency studio project, currently in the works, is the type of project the fund would favor.
Because cities that donate money have priority in receiving grants, a city could significantly leverage its donation through the housing trust fund. For example, if Mountain View made a donation of $250,000, and then requested the full $500,000 from the fund for the efficiency studios, the fund would likely grant the request, thereby leveraging the city's $250,000 into $500,000 for the project.
Block noted that he does not decide which projects are awarded the funding, but felt that the large size of the efficiency studio project would make it a good candidate.
Stasek said that by contributing to the fund the city could increase the amount of money it has for affordable housing development.
"If you look at it as seed money, it gives us a greater amount to start with," she said.
But Stasek said that before pledging money to the trust she would want to be sure that the money will be readily available to use for the efficiency studio project when the time comes.
"To me the question is, how do we make a contribution so that we can keep our commitment to the efficiency studios? That cannot be delayed," said Stasek.
Council members Ralph Faravelli and Michael Kasperzak suggested making an initial contribution to the fund, possibly of $250,000, and then a subsequent "challenge grant," which the city would donate only if the remaining four cities in the county that have not contributed decide to pledge money. Those cities are Los Altos, Los Altos Hills, Saratoga and Gilroy.
Kasperzak said Wednesday that the idea of the challenge grant is "the statement it makes. The other thing is that we've done a lot for affordable housing, and $500,000 might be a lot for us to give."
Block agreed that Mountain View has been one the county's more active cities in developing and preserving affordable housing, and commended the council for wanting to promote participation by all cities.
"I've never sensed any reluctance by the city of Mountain View to support the trust... [The council] has been focused on a lot of policy issues recently," Block said.
"The most important thing is that everyone, the city of Mountain View included, wants all the cities to participate," he added.
Council member Sally Lieber said she does not support the idea of a challenge grant because "the general rule to me is that you don't wait for other people to do the right thing."
"It's a large amount of funds, and we always have to look at what is the most responsible way to go with our BMR in-lieu fees that come in. But I feel that the $500,000 is really the right amount," said Lieber.
The council will revisit the question of how much money to contribute sometime next month. It will not decide until the projects scheduled to generate the in-lieu fees are sure to be completed.