With the recent failure of Silicon Valley Bank, I find myself reflecting this morning on the fragile web that makes affordable housing possible. SVB was a leader in lending to deeply affordable developments across our region and its exit means one less reliable anchor point in the complicated web of resources that makes a project work. We always hear about the community opposition, the cost per door, the need for new solutions, but seldom is there a celebration of the absolute wizardry required to put a deal together and build homes for our most vulnerable residents.
Almost every development requires money from local government, the state, private banks, community development finance institutions, and equity investors to work. Frequently, loans won’t even cover the entire cost of buying the land and designing the project, so nonprofit developers have to go out and find multiple sources with increasingly less collateral to offer as security. Many permanent sources demand leveraging or more community amenities as a condition of funding, so even more rocks must be turned over. And all of this adds time and cost to the desperately needed housing, furthering the specious narrative that affordable housing is somehow not worth the investment.
The case for affordable housing is, of course, rock solid. When people can pay rents that are within their means, everyone benefits. From significant decreases in homelessness to an improved quality of life for all, there is little question that this approach works on so many different levels.
Recent projects funded by the city of San Jose are a testament to this multifaceted benefit.
Not only did Iamesi Village provide 135 homes of rent-restricted housing for formerly homeless adults, veterans and people living with disability, it also attracted critical infrastructure funding from the state to pave the roads and put in bike-friendly elements around the entire North San Pedro area. The beautiful Quetzal Gardens rose out of the eastside of San Jose to offer 70 apartments for extremely low-income families, while also creating the new headquarters for the nonprofit SOMOS Mayfair and several other local businesses. And, in development right now, the Hub on Parkmoor will feature four floors of rental housing above 17,000 square feet of a youth-led community center dedicated to supporting current and former foster youth.
None of these amazing projects happened accidentally either. It came from thoughtful planning and contributions by a multitude of partners like the county, city, and the Santa Clara County Housing Authority. The city is a critical piece of the pie in all of these developments, but for its investment, city dollars are often leveraged more than five to one. More importantly, by putting money into the project city staff and elected officials get to have a say in the community engagement process, the depth of affordability and the other aspects that contribute to the health of neighborhoods as a whole.
But without our money in and with new legislation and regulatory demands coming out of the state, it’s quite possible that housing might come all the same. The difference is that it will still be your taxpayer dollars at work, but there will be absolutely no opportunity to provide community input, make sure the housing is serving the greatest need, or bring in other funds that work with housing to improve parks, trails and streets. If we don’t participate, San Jose won’t have a say in the how, when and where of what gets built. It’s that simple.
That’s why it’s heartening to see city officials recommending 797 Almaden for funding this Tuesday at the San Jose City Council meeting. It’s another important affordable housing development with 98 units made possible by dollars from voter-approved Measure E from 2018. Right now, Measure E is one of the few significant sources available that lets San Jose continue to support affordable housing development, and funding projects like this represents the commitment made to voters five years ago.
When the project is considered this week, you may hear arguments about its total development cost. But listen closely to the reasons for those increases and you will realize the nature of the economic uncertainty in our time and the real need to keep going despite these challenges.
A recent memo from Vice Mayor Rosemary Kamei, Councilmember Omar Torres and Councilmember Domingo Candelas in support of the development also gives good reason to hope that our leaders see the importance of this work, too. They state “as we continue to combat a housing crisis impacting residents in San Jose and throughout the state, we must look inward and take the necessary initiative to move housing opportunities forward.”
Strong and timely words. With major institutions collapsing before our eyes and recessionary fears growing by the minute, if we do not stay committed to being a part of this solution for the poorest among us, we’re all going to get left behind.
San José Spotlight columnist Ray Bramson is the Chief Operating Officer at Destination: Home, a nonprofit that works to end homelessness in Silicon Valley. His columns appear every second Monday of the month. Contact Ray at [email protected] or follow @rbramson on Twitter.
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