Looking to boost the city's affordable housing supply and tap into county funds to pay for it, the Mountain View City Council voted 4-3 last week to pursue an 84-unit apartment complex with an eye-popping $88.7 million price tag.
The proposed project at the corner of Shoreline Boulevard and Montecito Avenue has the highest per-unit cost in the city's recent history by a large margin, boosted by larger family units that are a rarity in many of the city's affordable housing projects, according to the nonprofit developer Charities Housing. Rather than pack small studios onto the one-acre property, the five-story project would have 21 two-bedroom units and 21 three-bedroom units.
In order to manage the high cost, city officials and Charities Housing sought to share the burden, with $18 million coming from Mountain View and $16 million from Santa Clara County's $950 million Measure A bond. But council members ultimately decided to swap the dollar amounts -- meaning Santa Clara County would pay $18 million and the city would pay $16 million -- even if it meant the county could end up taking ownership of the property in exchange for kicking in the larger share of funds.
The idea won a bare majority, with some council members worried about ceding the land to the county just to save $2 million in affordable housing money. But Councilman Lucas Ramirez said the two agencies have the same goals in mind, and that there's plenty of important priorities for affordable housing funds.
"In my opinion that money would be better spent delivering more projects," Ramirez said.
Charities Housing, which owns two other affordable housing projects in Mountain View, bought the property last year for $9.5 million with intent to demolish the office building and replace it with housing. If built, it would neighbor the Bailey Park Plaza shopping center and the Shorebreeze apartments, another affordable housing project. Revamping the property to build 84 apartments would require a rezoning for high density, and the developer is proposing just 44 parking spaces to serve all the units.
The project would cost just over $1 million per unit, making it far more expensive than the previous record of $785,000. The price is more in line with other recent affordable housing projects when breaking down the cost by bedroom, however, meaning the larger units for families are what's driving up the price. City officials also noted that construction costs are up 10% year-over-year since the COVID-19 pandemic began, driven in part by material costs for things like lumber.
Like all projects using the county's Measure A funds, a portion of the units will be set aside for housing the homeless. A third of the units will be devoted to permanent supportive housing or "rapid rehousing" for those in emergency need of a place to live. The remaining two-thirds will be available to those making up to 80% of the area's median income -- currently about $117,800 for a family of four -- of which half will have a preference for those who live or work in Mountain View.
If built, it would be the second project in Mountain View to use Measure A funds, which have largely been spent in San Jose thus far.
While council members largely supported the project and the cost-sharing arrangement, there was an ideological split on how much to lean on the county. Consuelo Hernandez, director of the county's Office of Supportive Housing, said Santa Clara County typically requires ownership of the land in situations where it pays more than the city. It's possible that the city and county could instead work out a shared ownership model or a long-term deed restriction, but there's no guarantee.
Councilwomen Margaret Abe-Koga and Lisa Matichak both pushed for city ownership, with Abe-Koga arguing that land is an important asset that retains complete local control. She pointed to the Los Altos School District, which sold off multiple campuses in decades past and now faces having to buy expensive new property.
"You just never know," Abe-Koga said. "And $2 million may seem like a lot right now, but I really believe we have to think about the long-term effects."
Ramirez said the promise of ownership wasn't worth $2 million, and that both the city and county have the same goal of keeping the housing affordable in perpetuity. Paying more does nothing to increase the number of units or make the units more affordable, and only stand to address a speculative concern decades from now, he said. The council agreed on a 4-3 vote, with Matichak, Abe-Koga and Mayor Ellen Kamei opposed.