Point Reyes Light - November 18, 2004
Affordable housing vote and funding crisis
By Jim Kravets
County supervisors last week unanimously agreed that the seven cottages already built in the Point Reyes Affordable Housing project can be sold at prevailing real estate-market rates instead of "affordable prices."
With the proceeds from the sale of some or all of the cottages, EAH hopes to subsidize construction of the rest of the project, which includes 27 apartments with rents affordable for low- and moderate-income households.
EAH directors last month told county planning commissioners that steadily rising costs have forced them to seek an amendment to the project’s masterplan to allow the cottages to be sold at market rates.
The effect is to reduce the odds of hundreds of hopeful people on EAH’s list of eligible homebuyers. The project has offered them what may be their only chance of ever owning a home in West Marin, where the median price for a home tops $700,000.
EAH, the Marin Community Foundation, and county government have struggled with rising project costs and the shifting sands of public and private funding at every step on the project.
Throughout the project’s seven-year history, as some funds became available, others evaporated and still others – that had been considered confirmed – were never there from the start. Confused? Such is the lot of affordable-housing advocates. The Light offers a chronological look into the vagaries of funding the Point Reyes Affordable Housing Project.
19981999• $28,000 awarded in June to EAH from a federally funded Community Development Block Grant. Notification of all federal grants comes via Roy Bateman, Marin County’s community-development coordinator, who allocates federal funds that pass through county government.
• $9,798 donation received when an anonymous individual contacted EAH’s Department of Education and Outreach.
• $58,244, another Block Grant awarded.
• $237,000 awarded from federally funded HOME program.
• $140,000 awarded from Marin Community Foundation.
2000
• $60,000, another federal Block Grant awarded by the county.
• $475,000 awarded by Marin Community Foundation.
2001
• $93,107, another federal Block Grant awarded by the county.
• $163,000 more received from federal HOME program.
• $100,000 is offered by an anonymous organization when EAH project manager Lamar Turner successfully pursues a grant.
• $70,000 awarded ($10,000 for each of seven cottages) by the federal Affordable Housing Program. Conditions of grant require the sale price of the cottages remains affordable for households at or below 65 percent of Area Median Income.
2002
• $200,000 more awarded from federal HOME program.
• $1,045,000 more awarded from Marin Community Foundation, bringing the foundation’s total contribution to $1,660,352.
• $1,660,352 promised by the Marin County Housing Trust Fund to match the foundation’s donations. The money was guaranteed on March 19 when county supervisors approved the project. The conditions of approval contained over 90 items. This $1.6 million does not include an additional $200,000 from the county in the form of waived building-permit fees and Planning Division fees.
• $3,330,000 (almost half the construction cost) is lost in April when the California Tax Allocation Committee withholds it – ostensibly because the project doesn’t have Coastal Commission approval. After receiving the approval the following month, EAH would reapply for the funds in June 2002. Again the project failed to meet the necessary criteria, this time by only one point, scoring 154 points out of a necessary 155. "This was the big hit that really left us scrambling," Turner of EAH said.
• $500,000 is loaned to the project by EAH itself, the largest amount EAH has ever loaned any project in the group’s history. "Expenses were coming in and we needed to keep going," Turner explained. "It was a very hard decision." At present, EAH still has $125,000 in the project.
2003
• $1,738,000 received in May from the Multi-Family Housing Program, which itself had received new funds when Proposition 46 passed in the fall of 2002. "This really put us back on track," Turner said.
• $96,000, another federal Block Grant distributed by county government.
• $3,985,000 loan in tax-exempt bonds provided by the California Debt Limit Allocation Committee. The award also made the project eligible for $2,499,400 from the California Tax Allocation Committee.
• $130,000 low-interest (3 percent) loan from the national nonprofit Low Income Investment Fund.
• $1,224,000 in land bought with another loan from the Low Income Investment Fund.
2004
• $100,000 grant awarded from the same anonymous organization that made a $100,000 contribution in 2001.
• $67,672 awarded by the federal HOME program.
• Revenue anticipated from sale at the prevailing real estate market rate of a 3.1-acre parcel earmarked for a single-family estate. "We’re going for top dollar on this parcel," said Turner, the EAH project manager.
• $50,000 acquired by the county for the project from the federally funded Home American Dream program.
• $150,000 awarded from state Housing and Community Development Building Equity and Growth in Neighborhoods program. Turner credits Supervisor Steve Kinsey with playing a major role in securing the late-in-the-game funds from Housing and Community Development and from Home American Dream.
• $300,000 to $900,000 in potential sales revenue lost when the county takes title to EAH’s commercially zoned lot on Mesa Road. EAH at one time had hoped to sell the lot at prevailing real estate-market rates. The county and Marin Community Foundation, however, said the money was not lost. EAH had agreed to turn over the lot to the county as part of the agreement when county government made the second half of it’s $1.6 million allocation to the project, they said. The $800,000 matched a second contribution from the foundation.
• $1,086,646 expected from the sale at market rates of two cottages previously designated as "affordable homes." The change in plans is announced in June but not officially sanctioned.
• $1,257,700 in anticipated revenue from the sale at "affordable rates" of the remaining five cottages.
• $50,000 of $70,000 in federal Affordable Housing Program grants lost when Turner, in order to maximize sales revenue, knowingly violates the program’s criteria by designating two cottages for sale at market-rates while making three others more expensive but still below market rates. This left the three cottages to some degree still officially "affordable" but eligible for less grant money.
• $1,200,000 lost in anticipated assistance (vouchers) for renters. The federal Department of Housing and Urban Development took away the money last June. The vouchers were to help subsidize the affordable apartments, but HUD gives the project closer scrutiny when EAH makes plans to give West Marin residents and workers priority for the Point Reyes Station Housing. HUD finds the Marin Housing Authority out of compliance for its Project-Based Section 8 Program in various ways. Among them is the county Housing Authority’s not allowing other projects to compete fairly for the allocation. Without HUD’s Section 8 money, EAH makes a formal request that the county amend the project’s masterplan. This would let EAH sell at market rate all seven previously designated "affordable" cottages, with money from the sales to make up for the lost HUD money. Doing this, EAH says, will at least allow the 27 affordable apartments to be built.
• $600,000 to $700,000 in Section 8 vouchers (roughly 50 percent of the original amount) is restored by HUD, which grants the county’s request for waivers. Softening of the Bay Area rental market (as determined by a federal formula), rising construction prices, and the cost of complying with other HUD requirements reduced the original value of the vouchers by 50 percent.
• $3,850,000 in potential proceeds from selling all seven cottages at market rates; this results from county supervisors officially amending the project’s masterplan. Some $2,344,346 of this amount has already been counted as anticipated money. The two- and three-bedroom homes, initially affordably priced around $224,000, are now expected to sell for $550,000 or more. However, with HUD restoring $600,000 to $700,000 in vouchers, some of the seven can probably be sold at "affordable" prices.
EAH project manager Turner said the cost of construction delays, winter weather etc. must be determined before his nonprofit will be able to say how many cottages will sell for "affordable" prices.
"It’s all one big jigsaw puzzle that keeps moving, and it never sits still so you can grab it," Turner lamented. "There’s no assembly-line boredom in this job."
EAH originally stood for "Ecumenical Association for Housing," but the nonprofit began calling itself simply "EAH" when it dropped its religious affiliation.