Mountain View City Council members gave a warm reception to a massive 716-unit apartment proposal Tuesday night, following a deal between the developer and the Mountain View Whisman School District to reserve a 144-unit apartment building on the property specifically for teachers, school staff and city employees.
The 4-0 decision -- with two council members recusing themselves and Ken Rosenberg absent -- caps off seven months of intense negotiations between the developer Fortbay, the school district and the city for a fairly unusual deal to get teacher housing built at 777 W. Middlefield Road. The roughly 10-acre site is currently the home of the 208-unit Village Lake Apartments.
Under the proposal, the project's required low-income housing units would be isolated on one part of the property and leased out to the school district in exchange for $56 million. With the district in full control of the 144 affordable units for at least the next 55 years, the income eligibility can be rejiggered to meet the needs of school staff who make too much to qualify for low-income housing but too little to make ends meet in the Bay Area.
Superintendent Ayinde Rudolph called the partnership a unique opportunity to build teacher housing -- likely one of the first of its kind in the state -- and that it could serve as a blueprint as other school districts seek to attract and retain teachers in a high-cost housing market. Rather than make the leap from educating students to building homes, Rudolph said the district is simply piggybacking on work already done by Fortbay.
"From a school district perspective, we are not proper developers. We would have to hire an outside firm to create affordable housing," he said. "This is so unique because it takes the onus off the school district to do all of that legwork for how to make that happen."
While it's a big real estate investment on the part of the school district, amounting to a public agency cutting a $56 million check to fulfill a developer's low-income housing requirements, Rudolph said told the Voice that the rental income should fully offset the costs over a 35-year term, with maybe $500,000 in excess income. If rent revenue starts to far exceed the cost of the loan, Rudolph said the district could look to decrease rents.
Surveys have shown that teachers and staff working in the school district are commuting long distances and paying huge portions of their paychecks for housing. Nearly one-quarter of employees surveyed said they travel 46 minutes or more to get to to work, and more than two-thirds said they are spending more than 30 percent of their paychecks on rent or mortgage, according to one 2016 survey.
Trouble is, the vast majority of those school employees make too much to qualify for low-income housing, which excludes residents making more than 80 percent of the Area Median Income (AMI). Housing constructed for people making between 80 and 120 percent of the AMI is virtually nonexistent, constituting what some city officials call the "missing middle."
The numbers appear to back that claim. Annual housing reports going back to 2007 show Mountain View needed to generate more than 500 "moderate-income" homes to meet the demand, but issued permits for only four units. The dearth of moderate-income housing is consistent across all cities in the nine county Bay Area, fueled largely by the lack of tax credits and subsidies.
Recent teacher town hall events held this year have given local elected officials a chance to hear personal stories from local teachers struggling to keep up with the high housing costs, driving long distances, sharing rooms and preparing to either leave the profession or the Bay Area.
Under the proposed framework for the Village Lake redevelopment, the school district would provide $56 million in exchange for a long-term lease for 144 of the total 716 units. The district would then give the city of Mountain View first dibs on 20 of those units -- in exchange for a to-be-determined amount of money -- before filling the rest with district employees. It's possible that employees from neighboring school districts could rent any empty units after that, but Rudolph said it won't be difficult to fill the apartments.
"In the event that we can't find people who want to rent, then we can open it up to other people who qualify within that area," he said. "But I don't think the concern is that we won't be able to fill it up."
In some ways, the three-way partnership may have saved the project. Perry Hariri, representing Fortbay, told council members that the cost of construction has increased so much in recent years, from $250 per square foot to over $400 since the original proposal, that the company would need to pony up what he said amounts to a $30 million subsidy for the 144 affordable units. Absent the funding from the school district, Fortbay's original project would be infeasible, according to a city staff report.
The rents at the proposed teacher housing complex aren't exactly dirt cheap. Average rents for the 36 designated "low-income" units would range from $1,409 for a studio to $1,811 for a two-bedroom apartment, whereas rents for the 108 moderate-income units would range from $2,630 for a studio to $3,381 for a two-bedroom apartment.
With little discussion, council members largely supported the proposed partnership and instead focused their concerns on parking. Fortbay is seeking to construct one parking space per affordable housing unit in order to make the project financially feasible, while providing 734 parking spaces for the remaining 572 units. This is much lower than the city's standard parking ratio, which has the potential to push cars into surrounding neighborhood.
Albert Jeans, who lives near the project, urged council members to consider more stringent parking requirements, and said that a total ratio of 1.8 parking spaces per unit would reflect the reality of the situation -- which is that plenty of city residents still have cars and drive. If the city misses the mark on demand for parking, nearby residents have little recourse to deal with overflow, Jeans said.
"I know we're trying to reduce the number of cars and everything like that, discouraging people from owning cars, but the reality is people still need cars to get around," he said.
Councilwoman Lisa Matichak said that it's great that the city is making progress in getting people out of cars, but the public transportation infrastructure simply isn't there to support such lean parking requirements -- at least not yet.
Mayor Lenny Siegel said the solution will come, in part, from the city's residential permit parking system, which could provide relief to current residents as the city clears the way for housing growth along Middlefield Road and the Terra Bella area.
"There will be many parts of town where there is a chance for spillover parking if we don't include residential parking as part of our transit demand management," Siegel said. "If we're going to become more of a car-light city over time, this is a good place to begin."
Saving Cooper Park
The Mountain View Whisman school board has been considering its options for a teacher housing project since 2016, leading to a feasibility study last year that concluded the district's best option would be to develop 9.5 acres of district-owned land at Cooper Park.
The idea may have made financial sense, but it prompted a firestorm of opposition from local residents who cherish the open space nestled in in the center of a single-family neighborhood and bristled at the idea of turning it into three-story townhouses -- even if it was for teachers. Even after district officials backed off of the idea, residents in the area were wary of the district's future plans for the property and kept green "Save Cooper Park" signs on lawns and at street corners long after the dust settled.
During the fallout of the feasibility study, Rudolph told the Voice that he began meeting with City Manager Dan Rich to figure out a partnership that could lead to teacher housing while at the same time preserving the open space at Cooper Park. After reviewing several properties, Fortbay's proposal at Village Lake came to the forefront as the best opportunity.
"It was the one that was the fastest approach, and the most unique approach," Rudolph said. "You have a developer that's already working on developing housing, they have their plans in place, they already have a carve-out for affordable housing, so a lot of the stuff was already down the road."
The "unique" part, Rudolph said, comes from the fact that districts typically build staff housing by repurposing district-owned land, which requires zoning changes and environmental studies that take up time and money. Rudolph said the district can avoid the headaches and get the teacher housing built much faster through the Fortbay project.
As a condition for the partnership between the district and the developer, city officials want an agreement in writing that the district would maintain the open space on Cooper Park and won't redevelop it into housing. The land would still be available for "another district purpose," but the district would need to consult with the city in advance.
"The city said what they're looking for is an affirmation that we're not going to develop Cooper Park for teacher housing, and that's essentially what we agreed to," Rudolph said. The district would seek to preserve the fields regardless of any future use of the site, he said.
Waverly Park resident Dale Kuersten, representing the Save Cooper Park group, said he believes the proposal and the guarantees laid out by the city to restrict future use of Cooper Park defuses the yearslong concerns about what might happen to the open space. Not only that, he said, the school district's deal with Fortbay includes 144 units -- more than the 82 townhouses envisioned in the feasibility study -- and opens the door for housing city staff as well.
The project is expected to go through another round of revisions and will come back to the council for approval, along with a detailed agreement between the city and the school district on the housing and Cooper Park.