County prepares for major housing boom

Decisions loom on divvying up Measure A's low-income, homeless housing funds in county

Santa Clara County is moving quickly on a strategy to build thousands of new homes for the county's low-income and homeless residents. And while most of the county's new Measure A housing bond will go towards helping the neediest residents, one big question still remains: where do you put all the housing?

At the Feb. 7 Board of Supervisors meeting, county officials revealed a series of objectives they intend to meet with $950 million in bond funds, which voters approved last year. The goals set major priorities for building new units for people who are homeless or making less than 30 percent of the Area Median Income (AMI) -- $33,500 for a family of four.

The county will set out to build 4,200 units for these extremely low-income renters, said Miguel Marquez, chief operating officer for the county. These units include a mix of supportive housing designed to help both the chronically homeless and families who "fall" into homelessness but can get back on their feet relatively quickly.

Other objectives include 600 housing units for low-income families making between 31 and 50 percent of the AMI, and a yet to be determined number of "workforce housing" units for renters making between 51 percent and 120 percent of the county's AMI. Bond money will also be set aside for homelessness prevention programs, tenant-based rental assistance and assisting 1,000 first-time homebuyers.

Measure A proponents frequently refer to the bond as a "game changer" and a "shot to the arm" for Silicon Valley, where explosive job growth has far outpaced housing construction, leaving a housing shortage that has pushed the cost of living to historic highs. They point to evidence from the Bay Area's Regional Housing Needs Allocation, created by the Association of Bay Area Governments (ABAG), which shows that Santa Clara County as a region failed to build enough housing to meet the increase in demand from 2007 to 2014.

Some cities had a bigger housing shortfall than others. Palo Alto, for example, was tasked with building 2,860 homes over the seven-year period to meet new demand, but the city only issued permits for 1,080. The vast majority of the homes that did go up were market-rate, and only affordable for families making 120 percent of the median income or more.

Mountain View built enough housing to meet its allocation during the same period, but 90 percent of the 2,656 new units were market-rate or luxury apartments.

Up until now, these allocations have served as an indicator for what kind of housing the greater Bay Area needs to keep up with population and job growth, and cities have no obligation to meet their goals. But these housing allocations could play an integral role in how Measure A bond money is spent around the county.

The last of the seven objectives for the bond program explicitly calls for new housing development and rental assistance programs to be distributed throughout the county's 15 cities "in a pattern that approximates" the Regional Housing Needs Allocation.

Last year, the Board of Supervisors agreed to put Measure A on the ballot with prescriptive language on how to spend it, earmarking about 74 percent of the funding specifically to help extremely low-income residents. But supervisors were reluctant to give a city-by-city breakdown on who would benefit, citing a need to keep options open. Maximizing the number of new homes might be difficult, for example, if an inflexible number had to be built in Los Altos or Palo Alto instead of San Jose.

While the Regional Housing Needs Allocation might sound like an appropriate way to gauge where to put new affordable housing projects, it could end up being met with serious opposition. Residents in many cities across the nine Bay Area counties sharply oppose the housing allocations and ABAG in general, calling it an out-of-touch agency demanding more homes be built in spite of worsening traffic and compromises to residents' quality of life.

County Supervisor Dave Cortese, who serves on ABAG, said there's a tendency among smaller cities in the Bay Area to disregard the regional planning process, or contest jobs and housing growth projections as being either exaggerated or impossible to meet. He recalled being confronted numerous times by neighborhood associations in his own district telling him that local elected officials have essentially vilified ABAG as the sole agency responsible for high-density construction and traffic congestion.

Supervisor Joe Simitian said he was didn't want to get too invested in the ABAG figures because, as he put it, the housing allocations tend to provoke an "endless conversation that doesn't seem to produce a heck of a lot of housing." County Executive Jeffrey Smith agreed that the controversial relationship that exists between cities and ABAG may prove to be a problem when trying to size up where to build thousands of new homes.

"Certain jurisdictions have not made a commitment to utilizing (allocations) to improve the housing distribution ... and some flat outright just don't care about it," he said. "That is a problem, and will be a problem in our implementation of Measure A."

Cortese argued that focusing on housing needs as a small subgroup -- the 15 cities in Santa Clara County rather than the greater Bay Area -- might change the tenor enough that it will be a useful tool. Instead of firing off letters to San Francisco making collateral attacks on the whole process, he said, elected officials in neighboring cities are going to have to confront each other face-to-face and figure out how to best spend affordable housing money.

"The mayor of small city 'X' needs to talk to mayor of small city 'Y' across the table, and those two mayors have to talk to Mayor Sam Liccardo from San Jose who feels like he's doing a disproportionate amount of the affordable housing," Cortese said. "I wouldn't mind being a fly on the wall to see those mayors debate who should be taking, in our county, that distribution."

Beyond a broad allocation of homes by city, Smith said the implementation of Measure A will also have to overcome what he called the most difficult component of the process, which is finding suitable locations for new housing and overcoming any public opposition during the planning process. He pointed to an upcoming affordable housing project in Santa Clara, which calls for 200 micro-unit apartments on an empty lot, potentially made of repurposed shipping containers.

The county could look inward at its own land. Simitian said he's had "preliminary conversations" about possibly using land north of the Santa Clara County Superior Court in Palo Alto for affordable housing, which is currently home to the Kumli Resource Center. He called it a "rather dramatically underutilized" site that might be part of the housing solution in the North County area.

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20 people like this
Posted by Idea
a resident of another community
on Feb 20, 2017 at 7:37 pm

You can build a very nice, new mobile home for 100k. Divide 950 million
by 100k. That is a plethora of new homes. Put them all on the outskirts of Gilroy, where the available land is.

3 people like this
Posted by Idea
a resident of another community
on Feb 20, 2017 at 8:09 pm

That's 9500 high quality, state of the art family homes. All where there is lots of open land. No one complains about their neighborhood getting messed up. And beggars can't be choosers. 9500 times 4 family members equals housing for 38000 people.

15 people like this
Posted by Pada
a resident of another community
on Feb 20, 2017 at 8:38 pm

Sorry @Idea, Gilroy just passed an Urban Growth Boundary so there will be no new development on the "outskirts" (actually, fertile farming land that produces far more value than a new subdivision). I'd like to see a majority of these low income developments smack dab in the middle of Palo Alto, Mountain View, and Cupertino - communities that have received a far greater share of the tech boom benefits without pulling their weight to address this region's challenges. It's about time they step up to the plate or the State/Region/County will start deciding for them.

9 people like this
Posted by @Pada
a resident of another community
on Feb 20, 2017 at 9:11 pm

Let's say it cost 1 million dollars to build 1 house in Mountain View, for example. That means you could only build 950 homes instead of 9500. The numbers don't add up if you are really trying to help people.

3 people like this
Posted by Darin
a resident of Another Mountain View Neighborhood
on Feb 21, 2017 at 3:00 pm

Darin is a registered user.

Assuming that all of the $950M from the bonds goes toward constructing the 4200 housing units, and that none of it is consumed by the bureaucracy running the program, that leaves less than $227k per unit. That's enough for a mobile home in Mountain View, but less than half of what a 1-bedroom condo in Mountain View costs.

11 people like this
Posted by Jared Martin
a resident of Old Mountain View
on Feb 21, 2017 at 3:36 pm

Jared Martin is a registered user.

Construction costs are not the driving factor for housing costs in the Bay Area. If they build densely, the per-unit cost will end up far below that of a single-family home. On top of that, the future marginal cost for housing will be lower, since we'll have lessened the gap between housing supply and demand.

Sorry, but further commenting on this topic has been closed.

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