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Affordable Housing & New Court Challenges

by Julie Lovins

“Affordable housing” is that requiring no more than 30% of a household’s income to be spent on housing-related costs (including rent/mortgage, utilities, HOA or similar fees).  Some annual household income vs. monthly “affordable” housing costs are thus: $150,000, $3750;  $100,000, $2500; $50,000, $1250.
It is in all our interests to provide housing for Mountain View residents of all income levels. Fairness/diversity/inclusivity is one reason. Another is economic sustainability: many of our small businesses, in particular, depend on relatively unskilled labor, often working unconventional hours, and it is not practical for these workers to commute great distances.

Examples of people who have had problems finding affordable housing in Mountain View are restaurant employees, retail clerks, baristas, gardeners, entry-level teachers and public employees, including young police officers. Do you feel that their living in the community where they work adds to their commitment to the people they serve every day?  What about our ability to have adequate professional assistance during a dire public emergency?

“Below Market Rate” housing, which is in effect subsidized by a developer (though not necessarily by other buyers/renters, since developers tend to retain their profit margins and lower their costs, such as what they’ll pay for land), is based on a family’s income as a percentage of the Area Median Income, combined with the above 30% criterion.  For 2009, Santa Clara County AMI for a family of four was $106,125.  The standard income classification brackets are: 81-120% of AMI, moderate income; 51-80%, low income; 31-50%, very low income; 0-30%, extremely low income.  Income from two full-time jobs paying $10/hour is about $41,600/year, in the middle of the “very low income” category for a family of four.  They can afford $1040/month in rent plus utilities.

The Mountain View BMR ordinance, enacted in 1999 to put some dent in a daunting number of housing cost problems, has collected 3% of the value of all new residential development (of at least three ownership or five rental units) for use in providing housing, for lower income households, that the market has not produced and never will. Developers have also had the alternative option of providing 10% of their units at various BMR sale or rental levels.

With the help of BMR funding (not City money) we have succeeded in the past 10 years in producing about 120 efficiency apartments at San Antonio Place, most occupied by one person; and we are working toward 51 units for families on Evelyn Avenue, west of Castro.  This is a drop in the bucket, especially considering how many apartments in Mountain View have been torn down for redevelopment to for-sale units, or converted to condos. Newcomers to Mountain View have expressed surprise that we have 56% apartments.  Thirty years ago, it was about 67%, again with a very low vacancy rate, because most apartments are intrinsically more affordable, and that’s what we need to support our existing jobs.

We all know that many prospective buyers still find themselves priced out of the for-sale market, while we continue to provide our entire “fair share” of houses for people with relatively high incomes.  There is some loan assistance available (for first-time home-buyers who can make mortgage payments) from the Housing Trust of Santa Clara County, and coming soon from the City of Mountain View, for City employees.

Recently one court decision clouded the horizon for the collection of fees to finance rental BMR units and another for for-sale BMR units.  The City Attorney has decided that for the time being we cannot enforce our BMR ordinance.  To surmount the ruling on rental units, the City needs to do a “nexus” study showing the need for such fees.  Until that happens, it is in all our interests to encourage private developers of apartments to provide some BMR rentals in their buildings, especially when these buildings are situated close to the jobs that the prospective tenants can or do fill.

1 comment to Affordable Housing & New Court Challenges

  • deb

    I’m don’t understand this statement:

    “Below Market Rate” housing, which is in effect subsidized by a developer (though not necessarily by other buyers/renters, since developers tend to retain their profit margins and lower their costs, such as what they’ll pay for land)…”

    How is it that developers retain their profit and lower their costs with BMR, for example, in the case of the Prometheus development?

    Thanks for your article!

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