RESIDENTIAL REAL ESTATE: Boom in affordable projects could ease funds from proposition in 2002 running out; new measure on November ballot
BY Lindsay Riddell
If it feels like there has been an affordable housing boom in the North Bay, it’s because there has, says Mary Murtagh, president and CEO of affordable-housing builder EAH, Inc.
Proposition 46, a bond measure that awarded $2.1 billion in funding mostly to multi-family housing projects, was enacted in 2002. Affordable-housing builders credit the proposition with the large number of projects built in the past four years.
“Proposition 46 enormously increased the total amount of affordable housing being built,” Ms. Murtagh said.
But now, with Proposition 46 money running out, local developers are worried that affordable housing projects will fizzle.
10,000 units in Bay Area
Ms. Murtagh estimated that 2,500 affordable housing units in the nine-county San Francisco Bay Area, which includes the North Bay, had financing through state programs before the proposition, while more than 10,000 were funded with the Proposition 46 money.
Projects in the North Bay include EAH’s San Clemente Place, a 79-unit rental apartment building in Corte Madera expected to be completed in July 2007; Hamilton Meadows, a two-phase, 101-unit affordable housing project built at the former Hamilton Air Field in Novato; and the to-be-constructed Drakes Way Apartments, 24 units of affordable housing in Larkspur.
Affordable-housing developer Burbank Housing of Santa Rosa is nearing more than 300 units of housing since Proposition 46 was passed, including the 107-unit Monte Vista project and the 128-unit Olive Grove.
Nonprofit housing developers are banking on the passage of Proposition 1C, which goes before voters in November and would re-enact the tax credits that funded the affordable housing boom.
“It seems to be polling fine,” Ms. Murtagh said. “Proposition 46 passed with a healthy margin. People get it. They see what’s going on. The housing market in California is like a supermarket where you walk in and there’s absolutely nothing to buy but filet mignon. It just doesn’t make sense.”
Burbank Housing used $38 million
Burbank Housing used $38 million of Proposition 46 funds to build its projects, said Executive Director John Lowry. Burbank aims to create 300 units of affordable housing every year. The company will start two more projects this year and hopes to start four or five more in 2007.
Mr. Lowry said he feels more support from local jurisdictions, which have made changes to their general plans to make securing land for affordable housing easier and are requiring developers to include affordable housing elements within larger for-profit developments. He said local community members also seem more supportive.
But challenges still remain. Construction costs are going up, which means subsidies can buy less now than they could in 2002. And other issues such as environmental constraints and slowing sales affect both the for-profit and nonprofit sectors.
Mr. Lowry said community members as well as local jurisdictions see the need for affordable housing and are much more willing to support it than in years past.
“I think what makes the job easier politically is that there’s a higher profile and sense of priority about it that there wasn’t if you go back 10 or 15 years. On the other side, the approval process is more complicated. There are some new constraints, and the tiger salamander has held up a large number of projects and still does.”
Ms. Murtagh said that to ensure that nonprofits can continue to deliver the amount of housing they’ve been able to over the last several years, they need a permanent funding source.