At a Glance
San Jose, CA
Providing rental subsidies and developing affordable housing through innovative financing methods
2,800 in 28 developments
There’s only so much funding for US housing authorities to obtain from federal, state, and local grants, so there’s a movement afoot for the US government to allow those authorities to tap more private equity and private debt for the financing of projects. Alex Sanchez, executive director of the Housing Authority of the County of Santa Clara (HACSC) in California, knows it’s a winning formula because his is one of the few organizations already doing it. The HACSC was selected for Moving to Work, a HUD demonstration program that allows housing authorities to try to reduce the cost of housing through innovative methods, and the HACSC has already managed to save money by allowing private firms to manage its properties.
“It’s going to create the kind of financial capacity that hasn’t existed in the public sector for many years,” Sanchez says. “It’s a method for allowing local ingenuity [to mix] with public money—combined with private funding. We think that’s the next wave.”
The HACSC, the 10th largest housing authority in the country, has tapped $135 million from private and public sources, according to Vanessa Cooper, the organization’s director of real estate services. The authority manages 2,800 units in 28 developments—a mixture of multifamily and senior housing, with one development for the homeless and disabled—in California’s Silicon Valley, and its new partnerships have enabled the housing authority to rehab 555 units, creating at least 400 jobs for tradespeople.
“The bulk of housing is [built with] low-income housing tax credits—the most common way of leveraging private dollars to create low income housing,” Cooper says. Converting to tax-credit housing freed up funds to allow the HACSC to do its repairs, and looking to cut costs further and make things still more efficient, the authority’s board members decided in 2010 to go with third parties for property management.
“Our properties were running in the negative; energy costs are going up,” Cooper says. After a public RFP, the HACSC chose the John Stewart Company, FPI Management Inc., and Charities Housing to improve the performance of properties, and the cost savings enabled the authority to complete $3 million worth of capital needs repairs and add more services such as social workers and after-school programs.
“It was a hard decision that required a lot of research and negotiation,” Cooper says. “It was the best solution for the tenant. In the end we need to serve our tenant population.”
Indeed, HACSC does whatever it can to keep its low-income residents happy and healthy, including outfitting its developments with green elements such as tankless water heaters, environmentally friendly carpets, a water-irrigation system controlled via satellite, and lawns with more plantings. Also, the organization is putting exercise equipment outdoors to encourage seniors to stay fit while socializing.
Such efforts evidence the valuable services that housing authorities such as the HACSC provide, yet demand will always exceed supply in the Silicon Valley, where thousands are still on the waiting list for homes, Cooper says. And housing costs are expected to rise 15 percent in the area, where the average rent for a two-bedroom apartment and the average price for a home are already, respectively, $1,800 and $650,000. Staying ahead of the curve, though, the HACSC and its innovative, local financing strategies are serving as a model for what more is possible. ABQ