PAHC Press Corner

Palo Alto City Council OKs Affordable Housing

First Development Geared for Families in 13 years

PALO ALTO WEEKLY - Publication Date: Wednesday, June 13, 2001
by Geoff S. Fein

Palo Alto will get its first affordable family housing development in 13 years, now that the City Council has directed staff to begin negotiations with the Palo Alto Housing Corporation to build a 53-unit project on Channing Avenue south of downtown. The housing project will benefit low- and very low-income families earning 50 percent below the county's median income. The median income for a family of four in Santa Clara County, for example, is $87,000. In Palo Alto, the median income for a family of four is $107,100.

The development will also help Palo Alto move closer to meeting its goal of 265 very low-income and 116 low-income housing units. If PAHC is able to obtain financing within the next year, construction could begin in 2002 and families could move in by 2003.

The council voted 7-0 to begin negotiating a predevelopment agreement with the PAHC to allow the housing agency to move forward with its architectural design and seek financing. The Palo Alto Housing Corp. proposal received unanimous support from an evaluation committee last month that looked at two additional projects before selecting PAHC's proposal.

PAHC plans to build 44 units with a smaller proportion of large family units. However, during the review process, the housing agency's conceptual design showed 53 units. Marlene Prendergast, executive director of PAHC, said prior to the meeting, the additional units would be built if the development can have access to more parking. However, before any construction begins, PAHC will need to find financing.

"We are looking into private financing, but nothing concrete (for now)," said Betsy Bechtel, special projects consultant for the housing agency, prior to the meeting. We are looking at traditional forms of subsidies - loans and city funding."

Housing agency officials estimate they will need about $2.5 million in subsidy funds along with the land contribution and equity from tax credits. The agency has proposed to city officials that approximately $1.2 million of these funds are from local housing funds. Finding private investors during the current economic slow-down may be tough, but Bechtel said there are always investors out there.

"There are investors for low-income housing, that's the good news," she said. "Our world doesn't depend as much on the economy."

According to a Planning Department staff report, the city obtained an option to acquire a 1.23-acre site in the South of Forest Avenue (SoFA) area for development of affordable rental housing in July 2000. In February the city sent out 20 requests for proposals to area developers, 16 of which were nonprofit agencies. Five developers attended a pre-proposal conference and site tour on March 6. PAHC, the Santa Clara County Housing Authority and the Olson Company -- a private developer -- were the only developers to submit proposals by the March 20 due date.

In mid-May a six-member evaluation committee reviewed the three projects. The Olson Company was quickly rejected because their proposal did not include any rental housing and the project would not serve large family households. The committee unanimously approved PAHC's proposal because of its emphasis on working with the neighborhood during the design phase; the strength of its design team; and its priority for units that will meet housing needs of very low income families with children.

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