Creativity and Cooperation: Financing Affordable Housing Sans State Redevelopment Funds

Since the dissolution of California’s 400 plus Redevelopment Agencies (RDA’s) in 2012, much of the burden of funding affordable housing has fallen back to the local level.  Previously, city governments and non-profit builders were able to tap into RDA’s for the funds necessary to get affordable housing projects off the ground.  Now, these projects rely much more heavily on public/private partnerships for funding.  In the SF peninsula, where there has become such a dearth of affordable housing, we are starting to see these public/private partnerships take initiative.  Take for instance, Habitat for Humanity, who has partnered with Redwood City to fund the construction of 20 affordable condos at 612 Jefferson.  Or more recently in San Mateo, where the Housing Endowment and Regional Trust of San Mateo County (HEART), a public/private nonprofit, just announced it will be lending $500,000 towards predevelopment activities for a 68-unit affordable apartment complex at the new Bay Meadows mixed-use development.

The absence of RDA funding is also part of what motivated Redwood City Council to pass an amendment to their Downtown Precise Plan in 2016 requiring that 15% of new residential construction be reserved for affordable housing.  Without RDA funding, the city knew their ability to finance affordable projects on their own was limited.  This amendment served as a way for them to pass the financial burden on to the developers of new market rate housing.  Since its passing, at least two developers have responded to the city imposed affordable housing requirement in a promising manner.

First, Anton Development put forth a proposal for a 250 unit apartment complex on Brewster, including 20% (50) affordable units.  The project received unanimous approval from the city, and council members praised the developer for taking advantage of state and federal tax credits and exemptions to finance a greater number of affordable units than what was required.  Using these opportunities provided by state and federal governments to finance affordable housing could set a precedent for developers in the future.

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Aerial view of the Broadway Plaza site, as well as the land where Sobrato hopes to build 120 affordable units

Last month, the developer trying to push through a massive mixed-use complex at Broadway/Woodside in Redwood City, the Sobrato Organization, announced a partnership with MidPen housing (a non-profit developer) to construct 120 affordable units on two parcels of land already owned by Sobrato.  These 120 units would count towards the affordable requirement imposed by the city, and when taken into account with the 400 market rate units they hope to build, make up almost 25% of their total offering.

If these affordable housing projects had been built in to all new residential development from the inception of the Downtown Precise Plan back in 2011, they likely would have had a much more significant impact.  Now, building 120 affordable units into yet another huge market rate complex just feels like damage control, as the cost of living has already soared far out of reach for countless locals.  Still, 120 additional below market rate units means 120 low-income families get to stay in place.  Let’s hope this trend of developers and public/private partnerships leading the charge to build affordable housing continues.

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