A model Bay Area partnership aims to fill the gap in affordable housing projects that are short capital, seeing it as a way to accelerate much needed construction.
The Bay Area Housing Innovation Fund — launched by Destination: Home in partnership with the San Francisco Housing Accelerator Fund, Sobrato Philanthropies and Apple — will put $50 million toward developing 400 affordable homes across the Bay Area. Nearly half of these homes will be dedicated to individuals who are homeless and extremely-low income.
The impetus for such a partnership is due to developers depending on low-income housing tax credits to build affordable housing. But as demand for these tax credits grows, the process to secure the public funds becomes more competitive and there’s not enough funding to go around, advocates said. The lack of capital puts projects in limbo and causes them to become more pricey as construction costs rise. This partnership can be a financial lifeline.
“It’s exciting because I think we need more ways to develop deeply affordable housing,” Ray Bramson, chief operating officer of Destination: Home and San José Spotlight columnist, told San José Spotlight. “It’s hard to watch good projects that can end peoples’ homelessness and can improve the quality of life for a family just sitting there.”
There are 13 San Jose projects waiting for city funding to start construction, keeping more than 1,500 affordable new homes off the market.
The housing innovation fund was created to address this situation, Bramson said. By pumping private dollars into affordable housing projects, wait times and building costs will be reduced.
Affordable housing developments take more than five years and cost more than $800,000 to construct a home in the Bay Area, according to the San Francisco Housing Accelerator Fund. Partners of the housing innovation fund estimate their projects will take three years to complete and cost $550,000 to build a studio and $700,000 for two- or three-bedroom apartments.
“We believe that the two impact levers to tackle the growing inequity in Silicon Valley are to address both housing security and economic mobility,” Camille Llanes-Fontanilla, vice president of Silicon Valley programs for The Sobrato Organization, told San José Spotlight. “We have over 170,000 rent burdened households in Santa Clara County and San Mateo County alone. So the need is massive.”
San Jose is the No. 1 most expensive large city in the U.S. to live in, with $3,504 average monthly expenses as of 2023. And the inequality gap continues to widen across the county, according to the 2024 Silicon Valley Pain Index, an annual report that compiles data about the inequities throughout Santa Clara County.
The housing innovation fund kicked off its pilot program by funding a 145-home development in San Francisco’s Mission District. It is still determining which projects in Santa Clara County it will support. But Llanes-Fontanilla said she would like other organizations to see the value of this initiative and join it.
“It really needs to be a collaborative partnership,” she said. “It’s not going to be philanthropy alone. That’s why we’re really excited about Apple’s leadership role in this. But it also requires local jurisdictions to be involved as a public-private partnership.”
Contact Joyce at [email protected] or follow @joyce_speaks on X, formerly known as Twitter.
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