Housing Commission Delays Vote For Scarce Affordable Housing Funds

Friday November 12, 2004

A decision to delay the battle for the city’s scarce affordable housing funds and allow one developer to overhaul its financing scheme months after the deadline has raised eyebrows among developers and some city housing commissioners. 

“It seems too late in the process to resubmit proposals,” said Jane Coulter of the Housing Advisory Commission. Coulter was a member of the commission’s Housing Trust Fund Subcommittee, which had recommend that three proposals receive city aid. 

But last week, the commission, at the request of Housing Manager Steve Barton, voted to delay a full recommendation to the City Council until Dec. 9. The council will hold a work session on the trust fund allocations Dec. 7 and make a final decision Jan. 11. 

The commission recommended Nov. 4 that the City Council allocate $727,000 for Affordable Housing Associates (AHA) Sacramento Senior Homes project, where neighbors have ended a legal battle that delayed construction for months. 

The commission agreed to postpone its recommendation give one applicant, Jubilee Restoration Inc., a chance to respond to a critical report alleging mismanagement from the federal Department of Housing and Urban Development. It also will allow commissioners a chance to review a revised financing proposal for the Oxford Plaza development. The 96-unit building, to be developed by Resources for Community Development (RCD), is slated to rise alongside the David Brower Center, which city leaders hope will be a destination point for visitors to downtown Berkeley. 

Neither project won the support of the subcommittee, which in addition to Sacramento Senior Homes, backed giving $1.9 million to a senior affordable housing project proposed by Satellite Homes at 1535 University Ave. and $1.95 million to a live-work loft development proposed by AHA for 1001 Ashby Ave. 

The trust fund is a federally-funded reserve set aside by the city to fund permanently affordable housing.  

Competition has been stiff among affordable housing developers this year because for the first time the city’s trust fund doesn’t have enough money to fund every project. By using a large chunk of its funding from HUD next year, the trust fund will have about $4 million—enough to fund two of the four proposed projects. 

Without an allocation from the trust fund, developers can’t seek other sources of funding and must delay their projects. 

The Satellite Homes project appeared to have the inside track for funding because it was the only applicant that qualified for a special $1.4 million pool of funding from the fund. That money is limited only to projects that don’t seek funds from the state’s Multifamily Housing Program. Satellite is seeking to qualify for a special high yield tax credit that would enable them to forego funding from the state program. 

However, two weeks ago Resources for Community Development submitted a new financing proposal—three months after the initial deadline—that would also use high yield credits thereby qualifying them for the same pool of money as Satellite. 

Satellite was not pleased by the last minute change. “We have tried to be faithful to the process,” said Satellite Executive Director Ryan Chow. “My hope is that the subcommittee’s recommendation will be accepted by the HAC.” 

Dan Sawislak, executive director of Resources For Community Development, countered that his organization hadn’t broken any rules and that affordable housing developers typically alter financing for their projects. 

Affordable housing project proposals evolve all the time, said Barton, the city housing director, who added there was no “automatic right answer” for how to deal with RCD’s new proposal. 

“On the one hand you want the most fair competition, but on the other hand you want to present the council with the best possible proposals,” he said. 

At last week’s meeting, the commissioners seemed divided over the Satellite and RCD proposals. Commissioners Coulter, who was appointed by Councilmember Miriam Hawley, and Anne Wagley, who was appointed by Councilmember Gordon Wozniak, argued that Satellite was closer to breaking ground and that it would face greater costs if it was delayed since it owns its proposed site, while the RCD site generates money as a city-owned parking lot. 

Victoria Liu, appointed by Mayor Tom Bates, disagreed saying that by being coupled with the Brower Center, Oxford Plaza “would be a great attraction for the city.”