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Publication Date: Friday, July 13, 2001

City makes pledge to housing trust City makes pledge to housing trust (July 13, 2001)

$500,000 in city housing fees to be paid over next two years

by Justin Scheck

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The Mountain View City Council this week committed to give $500,000 over the next two years to the Housing Trust of Santa Clara County, a non-profit investment fund that combines public and private funding to finance affordable housing developments in the county.

The $500,000 will be advanced from the city's general fund, which will be replenished by Below Market Rate (BMR) in-lieu fees, which the city will get from housing developers whose projects do not include below-market-rate units.

The city will give $250,000 for fiscal year 2001-2002, and another $250,000 for fiscal year 2002-2003.

These funds have already been earmarked for the city's efficiency studio project, a low-income housing facility that is currently being developed, and the city has not changed its plans for the money. But by putting the funds into the housing trust with the mandate they be used in Mountain View, the city hopes to get more than the $500,000 back from the fund.

At a June 12 study session in which the council and Chris Block, the Trust's executive director, discussed Mountain View's options for a donation, and explained that, because two-thirds of the nearly $20 million in the housing trust comes from private sources, it is possible that, after giving the first $250,000 this year, the city could get $500,000-the maximum grant from the trust for a single project-to use for the efficiency studios.

The remaining $250,000 in city funds allocated for the efficiency studios could then go to the housing trust and be used at a later date, likely with additional funding from the trust, for another affordable housing project.

One option discussed at the study session, a so-called "challenge grant" that Council members Michael Kasperzak and Ralph Faravelli found appealing, would have had the city contribute an initial $250,000 and withhold the rest until Saratoga, Los Altos, Los Altos Hills and Gilroy-which join Mountain View as the county's only non-contributing cities-make donations.

The housing trust's board did not like this idea, and the council did not pursue it.

The council was unified in making the decision, and council members pointed out a number of reasons for favoring the trust.

Council member Ralph Faravelli said he likes the Trust because it attacks the housing problem on a regional basis.

"We want to build (affordable housing) here, and we've tried, but we just don't have the land," said Faravelli. "But there's plenty of land in San Jose, Gilroy, Saratoga."

Council member Sally Lieber said she had planned on making a pledge to the trust and following it with payments of BMR fees as they came in, the approach recommended by city staff.

"But it seemed to make more sense advancing the money from the general fund," she said.

Council member Rosemary Stasek said she was glad to "get the money to the trust fund sooner, rather than wait... I just think it was really important that Mountain View contribute to the fund. I don't think there was any debate about Mountain View continuing its leadership role."


 

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