The Sun
Sunnyvale's Newspaper

Deals make affordable apartments a reality

By Steve Enders

On Thursday, a group of Sunnyvale city officials mingled with representatives from public and private groups near a shoddy apartment complex just north of Highway 101.

They were all there for a symbolic groundbreaking ceremony that will vastly improve the state of the apartments and create a brand-new apartment building next door.

More important, the apartments will be made more affordable to families who aren't bringing in the same high wages earned by many in the area.

The conglomeration of officials was also symbolic of the unique arrangement that, according to at least one of those on hand, needs to be emulated by other cities in the Bay Area.

In February, San Jose's First Community Housing group entered into a second agreement with the city of Sunnyvale to buy and remodel the Sunburst Apartments. Money the group received in 1997 will allow it to construct a new complex next door, which will be called the Parkview Apartments.

The arrangement is special, according to Sunnyvale Community Development Director David Boesch, because of the complicated financing involved in securing the deal.

He said that the development "represents the complexity of affordable housing" faced by those trying to promote it. A combination of counties working together with cities and private and public lenders securing tax-exempt bonds made the arrangement work, he said. The FCH group was able to cut administrative costs and complicated paperwork to speed up the deal and make it financially worthwhile.

The apartments, at 245 and 255 Weddell Drive, will be one of seven other similar developments that the FCH has worked toward building. According to Executive Director Tim Nieuwsma, FCH is about to break ground on another complex in San Jose, and has recently built others in Morgan Hill and Santa Clara.

"The demand is obvious [for affordable housing]," he said. "We're getting calls all the time, and the vacancies are nonexistent."

He said that for a group like FCH, it's often difficult to get funding because of competition from other developers who are building apartments and renting them at the market rate.

At Sunburst, one-bedroom apartments will start at $628 per month. Three-bedroom apartments can be rented--by those who qualify--for as low as $863.

For the FCH to qualify the building as "affordable housing," 20 percent of the units must be priced in a comfortable range for those earning 50 percent of the median income. In Santa Clara County, the median income is $77,200 for a family of four.

The remaining 80 percent of the units at Sunburst will available to those making 60 percent of the valley's median income.

"It's going to be a real nice project," said Tom Iamase, the director of housing development, who has been handling most of the financial duties for FCH.

The entire project will cost $7.5 million, with $300,000 coming from a federally funded city-development grant. FCH was guaranteed $1.5 million from Sunnyvale in March 1997 for the construction of the new complex, and the group has 30 years to pay the city back. FCH is getting another $5 million from privately funded tax-exempt bonds.

Besides various city government officials who were on hand, state and federal representatives showed support for the project. Staff members from the offices of state Sen. John Vasconcellos and U.S. Rep. Anna Eshoo attended Thursday's ceremony.

According to David Schaefer of Assemblywoman Elaine White Alquist's office, "Everyone realized this was a priority project."

"Housing here in the Silicon Valley is a big issue," he said. "We need people to live where they work ... we're looking for that combination."

Schaefer called the project "exciting" because of the arrangement of all the deal's players. He also encouraged citizens to get behind their city councils to create more affordable housing.

Sunburst currently has 32 tenants, 21 of whom fall into the low-income bracket. All of Sunburst's existing units will be completely remodeled--a project that Nieuwsma said will be more than just a face lift.

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This article appeared in the Sunnyvale Sun, September 2, 1998.
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