Affordable havens hidden in the state's highest housing market
By Eliza Ridgeway, Town Crier Staff Writer
 Joe Hu/Town Crier Irene Orogo moved into San Antonio place when it first opened. Having a residence of her own represents a sense of freedom for her since she moved out of her son’s home. |
Los Altos and Los Altos Hills received an A+ in the Bay Area Council’s assessment of the region’s affordable housing progress, released last week.
As recently as April, Los Altos was designated third among California cities for the highest median home price, $1.558 million, in the state, according to the California Association of Realtors. How can this apparent dichotomy exist?
The Bay Area, one of the most expensive places to live in the United States, is expected to continue to grow at a rapid rate. As more homebuyers compete in the limited local market, housing costs should continue to rise. The area already faces a housing shortage, which affects every level of the community. Sprawling development impinges on open space and leads to long commutes, and high housing costs hurt social equality and lead to overcrowding and even homelessness. The Association of Bay Area Governments predicted last year that by 2030, another 600,000 households and 1.6 million jobs will have sprung up in the region, and urges the area’s cities to prepare to house this influx.
Affordable housing mandated by state
The Association of Bay Area Governments studies housing needs in the area and sets development goals for each municipality, designated as their fair share. Cities are expected to achieve these goals through incentive zoning, permits and other processes.
Los Altos and Los Altos Hills rely on secondary living units, also known as granny units, to satisfy their housing requirements without increasing density. Planning regulations in both communities encourage home-owners to construct secondary buildings or home-extensions on their property. The additions can house extended family or renters, who must be charged an affordable rate. Their successful compliance is due in large part to creative housing solutions like the granny units.
“Because development is a free market, we can’t dictate that all of those numbers are built,” said James Walgren, Los Altos community development director. Instead, cities like Los Altos plan incentives and programs to encourage developers and homebuyers.
State law requires cities to prepare a Housing Element, updated every five years, as part of their General Plan. The element analyzes local housing needs and develops goals and objectives to meet the goals for affordable housing.
As an incentive to developers, Los Altos can grant concessions such as higher overall density, fewer required parking spaces per unit or waived fees. New developments are strongly encouraged to assign at least 10 percent of their units as affordable housing, which would be administered and sold to lower-income homebuyers by the city. City employees, police, teachers and fire department employees are given priority for the housing, as are those who work in Los Altos or who already have family living in the area.
Walgren said that the average resident wouldn’t notice the addition of affordable units, because they are part of very high-end condominium and town home projects. “But on average, there are 10 a year,” he said.
Single-family homes on Chester Circle and condominiums downtown such as Chartwell and Plaza Second are examples of privately developed sites with affordable units administered by the city. A deed restriction is placed on the homes, and the resale price is fixed according to changes in the area’s median income, rather than the housing market. The units might not become equity jackpots, but they provide an opportunity for buyers otherwise priced out of the area.
A two-bedroom home in the city’s program would sell to a low-income buyer for $200,000. That amount is calculated based on the expectation that a household making the low-income threshold, $76,400, could pay a maximum housing cost of 30 percent of their income. The estimate includes property tax, utilities and homeowner’s insurance, as well as the mortgage.
El Camino Real is one of the few remaining areas in town where housing can be built with the density and affordability required by law. Because of the recent business down-sizing, property along El Camino that had been purchased for office buildings has increasingly become available for housing developments, Walgren said. The development currently underway at 5100 El Camino, set to open next spring, will include four affordable units. A development at the intersection of El Camino and Los Altos Avenue, in the approval stage, will include eight below-market-rate units.
Obstacles remain to discourage affordable housing increases. For a community like Los Altos, almost entirely built out, land is expensive and residents often object to high-density projects that could alter the character of a neighborhood. Cities don’t always want to grow. But for Silicon Valley’s economy to support itself, the growing population of workers must be housed - somehow.
“When these housing plans started coming through the public review process, (there was) a fear it would be substandard housing that would bring the community down,” Walgren said. “After seeing that these are attractive condo and town home projects, that these housing units are going to teachers and police officers and firefighters, people think it’s a good thing.”
Housing Trust leverages
donations
The Housing Trust of Santa Clara County is a non-profit organization that serves as a catalyst for housing development in the county. It provides zero-interest loans to first-time homebuyers, grants and loans to developers of affordable housing, and homeless and special needs assistance.
“Affordable housing is an issue that hits home for everyone,” said Maury Kendall, senior communications manager for the trust. “It’s important to members of the business community, for finding homes for their employees or the people their employees rely on for services.”
Every city in Santa Clara County has contributed to the trust as a voluntary way to address the pressing regional housing issue. Los Altos donated $5,000, Los Altos Hills has pledged and donated $25,000 in recent years and Mountain View has contributed $1.05 million, according to Kendall. In addition to municipalities, many local employers, foundations and residents contribute to the trust, which relies entirely on voluntary donations. Los Altos Hills Mayor Dean Warshawsky joined the board of the trust this year.
“Housing has been, is and will continue to be a difficult issue for the Valley to solve. This is a group that’s not just complaining, it’s trying to do something about it,” Warshawsky said.
Just across the border from Los Altos, the trust assisted in the development of San Antonio Place, a complex of 118 efficiency studios built by non-profit developer Charities Housing at the intersection of San Antonio Road and Central Expressway.
For special projects, the trust can facilitate the needed funds and demonstrate local backing when developers bring their proposal to a city government for approval.
“The developers didn’t build San Antonio Place on our $625,000 loan,” Kendall said. “But we leveraged that for $19 million worth (of construction). They tell us that without our help, that project wouldn’t have gone forward.”
The 325-square-foot units rent for $620 a month to individuals with incomes up to $26,005 per year, and $705 to those earning up to $33,435. Those income numbers are, respectively, 35 percent and 45 percent of the area’s median income. Both qualify as very-low income.
San Antonio Place features an apricot and buttery yellow exterior, landscaped with a big brick patio, purple flowers and bamboo in big urns. The interior has an industrial, neo-modern aesthetic, with soaring wood-beamed ceilings, concrete floors and large windows.
Irene Orogo moved into San Antonio Place the day it opened. She had been living with her son in Mountain View, but he is getting married soon and she wanted to give the new couple privacy.
“Three’s a crowd,” she said with a patient grin. “I was the one who forced myself to leave the place.”
Orogo has nothing but praise for the diverse community, many of them seniors, who live in the building. “It’s a haven of peace, tranquility, contentment and camaraderie,” she said. “So quiet and clean. I want to invite other senior citizens and workers from around Mountain View.”
The facility was planned to provide a safe, pleasant environment for people who couldn’t afford those amenities in the mainstream housing environment. Its urban location, close to businesses and public transportation, serves the elderly and disabled who can’t drive to services.
When Orogo became ill, the Palo Alto Medical Foundation was a short Caltrain ride away. She walks to the Milk Pail Market and the Safeway across the street.
“Since I came here, my cholesterol and blood pressure are lower, and my diabetes is better with all the walking,” she said. She has an electric piano tucked in the foyer to her studio and plans to enroll in classes next door at the Community School of Music and Arts.
Giving first-time home buyers
a jump start
Mike Ramon, a supervisor in Los Altos’ maintenance division, moved into one of the city’s affordably priced homes on Chester Circle about a decade ago with his wife and two sons.
“It’s a pretty dense community, but we’re close to our neighbors,” Ramon said. “Our kids grew up together playing baseball.”
To him, affordable housing has a simple definition: you wouldn’t be able to buy a house otherwise. And as a homeowner, you have the opportunity to save and send your children to school in the same community where you work.
“There are not many public works employees who live in town,” Ramon said. “If something needs to be done quickly, I’m five minutes out, sometimes closer. People can’t believe the response time - it benefits the community. It also gives you a sense of ownership - a different sense about your job - when you live in the community you take care of.”
The Housing Trust stepped in to help Shankari and Thomas Raffill when they were trying to purchase their first home. Thomas was laid off during the tech crash, and the couple, planning to start a family, were searching for a home affordable on a single salary. They found a fixer-upper in downtown Mountain View, built in the 1920s, on the market for about $450,000.
“We almost had enough money for a 20 percent down payment but not quite,” Shankari said. The couple were scraping for every penny, paying a realtor by the hour rather than on commission and borrowing from family. The Housing Trust gave them a $6,700, no-interest loan that won’t need to be repaid until they sell the house. With the loan, they were able to lock in a 30-year fixed-rate mortgage.
“The day we bought the house, we had $200 left in the checking account,” Shankari said. “It was really scary. Now things are much better. We feel like we really lucked out.”
She has watched the rise of home prices in her neighborhood and breathed a sigh of relief that they were able to get into the market.
“If we had to wait a couple years, even with a higher income, I don’t know how it would have worked out,” she said.
The housing crunch in the area is going to continue, probably as long as Silicon Valley is an employment mecca with limited urban density. But through programs like the state’s fair-share allotments and non-profits like the Housing Trust, cities and residents can expand their communities to include those who need a boost.
