The Sunnyvale Sun
Cover Story
Photograph by Daniel Sato
Low to very low income people hoping to win the Section 8 lottery, which offsets 70 percent of monthly rent payments with government-issued vouchers, formed a long line at the NOVA CONNECT! center in Sunnyvale on April 24. Here, applicants (from left) Maria Jara, George Abina and Diane Moreno ask Santa Clara County Housing Authority housing specialist Carl Johnson (left) questions about the application.
Affordable? Housing
Many wait in vain for homes and apartments they can afford in expensive Sunnyvale
By JASON GOLDMAN-HALL
Sunnyvale resident Victoria Bell--a recovering addict proud of four clean years--is hoping to find a place to rent on her $549.05 monthly wages. But, in an area where the average rent is over $1,000, she won't be able to, without generous government help.
"It would help me in a lot of ways. It would help me get stable and get custody of my kids," Bell said.
For Bell and thousands of other Santa Clara County residents, rent--even for many "affordable" housing units--is anything but affordable, and the growing need for shelter is rapidly outpacing the supply.
On April 24, hundreds of residents waited, in some cases for an hour or more, to file an application with the NOVA CONNECT! office in Sunnyvale, hoping their name comes up soon in the Section 8 lottery.
Wages in America
When the federal minimum wage was created in 1938, the goal was to make sure that even the lowest-paid employees could make enough to live on.
In Santa Clara County, a minimum wage employee makes $14,040 a year. That's barely two-thirds of what is considered "extremely low income," and not enough to afford a single-bedroom apartment in an area where the average rent on those units is around $1,200 a month, according to Sunnyvale Community Services.
As a result, county homeless shelters are full, affordable housing is missing its funding mark by $2.4 billion, and an estimated 50,000 people are playing what could be a decade-long waiting game for subsidized housing.
Second only to San Jose in size, Sunnyvale has always been a microcosm of Silicon Valley, rising and falling with the area's growth and economy. In terms of affordable housing and homeless issues, Sunnyvale again mirrors the larger struggle surrounding it.
Section 8 hopefuls
During the week of April 24, hundreds of Sunnyvale residents turned out at the NOVA CONNECT! Office to get Section 8 applications or to sign up online for the waiting list for subsidized housing.
Victoria Bell, who was one of those residents, was already standing in line at 8 a.m. along with more than 25 other people when the office opened its doors.
Section 8 is one of the best chances for low-income residents. After accepted participants pay one-third of their monthly income as rent, the county pays the rest, using federal Housing and Urban Development funds. The waiting list has been closed since 1999.
"I think it's a good thing that they opened the list back up, because it gives people a chance to get themselves stable, to get off the streets, and people really need that," Bell said. "I'm just praying that I get picked."
But, without enough funding and houses, Section 8 and the myriad other affordable housing and subsidy programs can't hope to match the present demand.
According to Alex Sanchez, the Housing Authority's executive director, 59,644 people signed up online by the deadline on April 28, and another 15,000 mail-in applications were received by May 1. More applications postmarked by the deadline were expected to come in, raising the total to more than 75,000 applicants in Santa Clara County alone.
How many are helped?
The Housing Authority estimates 100 vouchers turn over every month, so it can help about 1,200 new families every year. At that rate, it will take more than 62 years to serve the people who signed up.
Like Sunnyvale, the stiff housing market and general lack of funding in Santa Clara County has left the poor and homeless with precious few housing units. And until political and social priorities change, those close to the problem say it's unlikely that trend will change.
Dissecting a dilemma
Sunnyvale Community Services executive director Nancy Tivol said one of the problems is the huge gap between the income of a minimum wage worker--as many of her clients are--and the median income in the area.
For a person making the federal minimum wage of $6.75 an hour, 2,080 hours of work--40-hours a week for 52 weeks--bring in just $14,040 before taxes.
"I call it 'gross income,' in both senses of the word," Tivol said.
That income is roughly two-thirds of what is considered "extremely low income."
Even if some of the poor and homeless residents of the county make more than minimum wage, the high cost of housing--which hovers above $600,000 for most homes in Sunnyvale--makes "affordable" housing unaffordable.
Oftentimes, the rent is affordable, but no money is left for the necessary utilities, such as power, water and phone lines.
"Most of our clients are able to barely make it, but if an emergency comes along, or anything that costs $50 or $100, they can't handle that," Tivol said. "If you're only saving $80 a month and you need to get car repairs, you're not going to make it. One job used to be enough, but now a family needs three or four jobs."
What about health care?
In addition, many low-paying jobs don't provide health care or medical benefits.
"It's like looking at a tapestry; the threads are all so closely interwoven together," Tivol said. "I think that if everyone had health care, our business would go down 80 percent, because if you don't have health care, you don't get preventative care-- so you get sick. If you go into a clinic, it means you're not working, so you don't get paid."
For many of Tivol's clients, Section 8 housing vouchers are a much-needed helping hand, because they protect families from high rental rates and allow them to devote two-thirds of their income for expenses and savings.
To help families with unforeseen expenses, Tivol said SCS often provides emergency funds or service vouchers, but the demand for those is also outpacing the supply.
Services expensive but cost-effective
Last year, Community Services gave out approximately $500,000 in assistance. The agency distributed $395,000 of that by the third quarter of the fiscal year. This year, by the end of the third quarter, it had already given out $455,000.
But even that emergency funding is not enough.
There are a number of hurdles that must be overcome for affordable housing to be built anywhere in Santa Clara County; money is just the biggest.
In addition to serving a needy population, more affordable housing can save money for cash-strapped cities.
Marjorie Matthews, director of the Santa Clara County Office of Affordable Housing, said it costs approximately $16,000 a year to house a homeless person, but it can cost a city more than $60,000 to provide the medical and incarceration fees someone can accumulate living on the streets.
"If we can't appeal to people on the basis of ending human suffering, we try to appeal to them on the basis of not wasting taxpayer dollars," Matthews said.
Construction needed, but where?
In addition to money, Matthews says, adequate affordable housing would require high-density construction in urban areas such as San Jose and Sunnyvale because of the proximity to health services, transportation and jobs. But many local governments avoid high-density buildings in deference to constituents who dislike the idea crowded city centers.
"It's going to take political courage on the part of elected officials who have power over zoning," Matthews said.
Matthews said she is hopeful things can change, given enough time, city participation and political pressure. Agencies around Santa Clara County are watching the process as anxiously as she is.
"Housing--like food--is something that shouldn't be a business," said Sunnyvale Community Services caseworker Jose Hernandez. "Anyone who works full time should
Studying the issue
According to a preliminary study, "Housing Silicon Valley: Affordable Housing Production and Finance," written by San Jose State University assistant professor Shishir Mathur, there is a shortage of approximately 33,000 housing units for low-income families in Silicon Valley.
In 20 years, Mathur said, that shortfall could grow to slightly more than 50,000 units, and a corresponding lack of $3 billion in necessary funds.
The study was an attempt to get verified figures for the need in Santa Clara County in the hope they would make fundraising more effective.
"We had already realized that there is a high need for affordable housing in Santa Clara County, and we had talked about it, but nobody had tried to quantify the actual need," Mathur said.
Since 1999, slightly more than 14,300 housing units have been built. Of those, 1,339 were home-ownership and 13,006 were rental units. Of the rental units, 5,396 were for low-income families, 6,079 were for very low-income, and only 1,531 were for extremely low-income families.
"We have done a pretty good job of providing affordable rental units to people making $50,000 a year or more, but if you want to provide housing to the people making less than that, you need more subsidies," Mathur said.
During the study, Mathur worked closely with the Santa Clara County Office of Affordable Housing, an agency that has helped distribute $14.6 million since the end of 2003. Even though that money helped build 1,000 new affordable housing units in 17 different projects, many people in the county still can't afford them.
The discrepancy between cost-of-living and the amount of money low-income families make has led to the proliferation of Santa Clara County's "working homeless," a large class of people with income that is insufficient to provide basic housing.
"A large number of our people are working and have income, so they may be able to afford rent but not the PG&E and food and other basic necessities," said Sunnyvale Armory site manager Kelcy Fleming.
Meeting the need: poverty vs. profit
Part of the money Sunnyvale Community Services allocates to those who need housing comes from the city of Sunnyvale. According to housing officer Annabelle Yurutucu, the city runs a number of programs to encourage the development of affordable housing and supports residents who want to purchase it.
Much like the Section 8 demand, when the city last opened the list for below-market rate homes in January of 2004, 850 residents signed up in a month.
In 2003, the Sunnyvale City Council updated its BMR program to better encourage the development of affordable housing in Sunnyvale.
For any development with nine or more proposed for-ownership units, the city requires 12.5 percent of them be sold below the current market rate. For rental units, 10 percent must by BMR. For a two-bedroom home, below market rate means a $218,954 home. According to Yurutucu, the current market rate for townhomes in Sunnyvale can go as high as $800,000. Detached homes can sell for $900,000 or more.
Yurutucu said the city intends to raise the percentage of necessary BMR units to 15 percent when the economy improves.
"Council was very careful about making sure that the economic impact (of being required to include affordable housing in proposed projects) was not too much to make developers not come to Sunnyvale to build," she said.
Even with a lower percentage than the city wanted, Yurutucu said it's still a struggle to get developers to agree to BMR units in new projects.
"It's always about the money," Yurutucu said. "Developers are out to maximize profit, and BMR units reduce that profit."
Sunnyvale currently has approximately 500 BMR units in the city, 200 owned, 300 rented. There are 287 in planning or construction phases, and 23 were built last year.
If developers don't want to make BMR units, they can pay an in-lieu fee for those units in projects of 20 or fewer total homes. The fee is the difference between market and below-market rate homes, which can mean hundreds of thousands of dollars to the city.
"We would rather have the units than the money," Yurutucu. The money it gets from in-lieu fees is used to support housing agencies and offer loans to first-time homebuyers.
Some of those fees support the county Office of Affordable Housing in its goal to encourage developers to produce quality low-income housing.
"You have to help the developers build the housing and you have to then help the residents so that can afford to rent the house," Marjorie Matthews, director of the Santa Clara County Office of Affordable Housing, said.
