How Marin should put out the affordable housing welcome mat…
While a contentious debate continues about whether Novato should have to bow to state affordable housing quotas, two affordable housing organizations have quietly embarked on a program that adds affordable homes to the city’s mix. And no one is arguing.
Northbay Family Homes (NFH) and its financing affiliate, the Suburban Alternative Land Trust, last month bought the first two homes in a 20-home workforce-housing program. Both properties are three-bedroom, two-and-a-half bath townhouses, located off Redwood Boulevard, just north of Novato Boulevard. The foreclosed homes are close to shopping, jobs and transportation—workforce homes.
The Northbay Family Homes program is part of a Marin Community Foundation (MCF) initiative to promote workforce housing and add to the affordable housing stock. MCF awarded the group a $250,000 grant to start its program to buy, refurbish and return to the market bank-owned homes. In addition to the MCF grant, NFH received funds from the Federal Home Loan Bank of San Francisco, the San Francisco Foundation and PG&E.
The funds will be used to buy, rehabilitate and sell to working families the 20 homes in the next 12 to 18 months. The first home in Novato should be back on the market next month, according to Clark Blasdell, NFH president and CEO. Originally, the program was to extend to Sonoma County. But NFH couldn’t secure enough loan money to buy in Sonoma; in Marin, Wells Fargo helped kick off the program with a $500,000 loan.
The focus of the program is to provide affordable housing for working families with three or more people in a household that includes at least one child living at home. To qualify, a family must earn no more than 80 percent of the area median income, or about $86,00 for a family of four. The first home was bought for $200,000 and is getting about $50,000 of work before it goes on the market. Depending on a family’s income, NFH will sell the properties at cost or less
“Northbay Family Homes is in year 34,” says Blasdell. “During the first decade, we did a wide variety of projects. We used all kinds of foundation and government financing. The subsequent two decades, we pretty much only did it with primarily private sector money. We had no foundation grants, no government grants. We just did it with our own earned income. In 2005, everybody’s money disappeared—government, financing, banking, it all disappeared. We went back to applying for grants, and we have been quite successful over the last few years getting grants and support.”
The MCF grant is part of a $10 million initiative the organization began in 2009. One of the strategies is to invest in affordable housing, rental and owned properties “that take advantage of specific opportunities”—which includes the large number of foreclosed homes in the county. Novato was a logical place to start the program, according to Blasdell. “About half of [bank owned] homes in Marin exist in Novato.”
Because of limited financing options, NFH had to be creative with its plan to launch the home buy-back program. The alteration in the plan accentuates a market-based approach. “We can’t acquire a third house until we sell the first house,” says Blasdell. “We will be doing buy, fix and sell, buy, fix and sell.” The Wells Fargo funding is a revolving loan that NFH will use to “replenish itself to buy another home.” It’s not unlike the old go-go real estate-bubble days when investors bought and flipped homes for a profit. In this strategy, however, the benefit goes to working families and communities that need additional affordable housing. Although the real estate market crashed, housing prices in Marin are still beyond the reach for many workers, especially those in service industries.
The market-based approach is getting a boost in the form of subsidies from the Federal Home Loan Bank system. Families earning up to 65 percent of the area’s median income will qualify for $15,000 of down payment assistance through the system’s Affordable Housing Program. The Federal Home Loan Bank of San Francisco is part of that system. Each year, federal home loan banks set aside 10 percent of their net profits to fund affordable housing programs and developments for very low-, low- and moderate-income families.
The federal Affordable Housing Program received authorization after the S&L debacle of the 1980s, in which hundreds of savings and loans went bust, leaving taxpayers to bail out the industry. Ironically, many institutions went out of business because they imprudently loaned money in the go-go real estate market. “It’s about the private sector’s contribution in order to remain in business,” says Blasdell. One condition of the bailout was telling the savings and loans that “when you come back to profitability, you have to set aside 10 percent of annual profits to be provided to organizations in the community that you serve. You can award it out as you see fit.”
The NFH program qualified for $600,000 in Affordable Housing Program funding from the San Francisco bank, half of which was to be spent in Sonoma County; unfortunately, the Sonoma portion of the program is on hold. The remaining $300,000 will go toward providing that $15,000 of mortgage assistance for Marin families.
Blasdell says his group, which played a role in creating housing at Hamilton, has “always been a black sheep in the nonprofit world. Many people haven’t understood the model. If the private sector has two-thirds of the money, that’s the place to go to first. That’s how we got our part of Hamilton done; we went to the private sector. We helped create a redevelopment sector to complement the private sector.”
The MCF grant to NFH is part of a shift in its grant-making policy. Rather than simply granting funds to organizations for ongoing program operations, it embarked on a path to foster new and innovative ways to wrestle with existing problems.
The NFH program “is very attractive to our investment eye,” says Thomas Peters, MCF president and CEO. “We use the term philanthropic investment, and putting that money into a market-based solution makes it more sustainable. We are looking more and more to those kinds of creative, multi-sector market-based programs.”
In addition to the NFH grant, MCF has contributed “a minimum of $1 million” to Habitat for Humanity over the years to help build affordable housing using Habitat’s sweat-equity model. The community foundation is funding a Habitat program—to rehabilitate foreclosed homes—that complements the NFH program.
“We have two new homeowners in houses,” says Phillip Kilbridge, executive director at Habitat for Humanity Greater San Francisco. “One is in Novato, one in San Rafael, and we have two homes under development in Novato as well. Habitat also has plans for affordable housing in Strawberry, but that project is on hold until the developer of a market-based portion of the project decides to jump back into the real estate development market.
For a while Habitat met with resistance in Marin, including Novato. But the visceral opposition, based mostly on inadequate knowledge of Habitat and its clients, seems to have diminished, most likely because Habitat’s projects in Marin are aimed at single families rather than the medium- and high-density projects that some Novato residents strongly oppose. “It’s nice that we finally, after 15 or 20 years of working, have hardworking Marin families in some homes built by Habitat,” says Kilbridge.
In contrast to the days of open opposition (although that certainly could reappear), neighbors of new Habitat homes have been “warm and welcoming.” Kilbridge thinks the welcoming attitude comes in part because neighbors see a home in poor condition after foreclosure. “It’s vacant and it’s sitting there. The option is that it sits there longer or somebody buys it as an investment property and rents it. Or at Habitat we get a new hardworking homeowner in there who is going to put in 500 hours of their own time, along with a lot of volunteer time.” One Novato home was “not in good shape,” he says. “You go by there now and there is a raised garden bed in the front yard, a nice lawn and a family with three kids.”
Before purchasing homes, Habitat engages in significant outreach in the neighborhoods in which it works. It paid off in Novato. The owner of the aforementioned home told Kilbridge that when the family went trick-or-treating, neighbors expressed warmth and friendliness. “He felt like a rock star,” says Kilbridge.
The program, taking foreclosures and rehabilitating them as workforce housing, takes advantage of a circumstance. But Kilbridge, Blasdell and Peters acknowledge that the need for workforce housing is far greater than the supply that can be created by taking foreclosed homes and getting them back in the housing stock. “This is nice. This is a short-term window, but this doesn’t really solve the problem,” says Kilbridge.
Medium-density developments go a long way toward meeting the challenge of adding affordable and workforce housing in the county, say affordable housing advocates. When many neighbors in Marin hear the term “multi-family,” they mount opposition groups, which is what happened in Novato. Many opponents conjure images of monolithic inner-city housing projects out of character in Marin neighborhoods, the type of housing no one is proposing here. Newer models for medium-density affordable and workforce housing look like any other Marin housing development. And with quality management and tenant (or owner) selection, the inhabitants of these homes are indistinguishable from other residents in the neighborhood, say affordable housing proponents.
Recognizing the problem of perception versus reality, part of MCF’s grant program focuses on increasing public support for affordable projects. Its funding helps support a partnership between the Non-Profit Housing Association of Northern California and the Greenbelt Alliance to promote the idea that workforce housing is part of a symbiotic relationship in the community, benefiting the environment, neighborhoods, local economies and also protecting open space from sprawl.
“It’s a multi-year initiative,” says Diane Spaulding, the housing association’s executive director. The initiative has given birth to Live Local Marin, a new effort with its own website (livelocalmarin.org ).
Spaulding says reliable data about affordable housing is hard, if not impossible, to find. To remedy that situation, the housing association has been compiling a report that it will release soon. The data can help cities like Novato engage in a rational debate and also meet state housing goals. The housing association is dedicated to dispelling the myths “of who lives in affordable housing and who needs it.” The goal is “to turn a not-in-my-backyard approach to a yes-in-my-backyard approach.”
Living la Vida Local
As part of its effort to showcase the realities of affordable housing, Live Local will conduct a tour March 5 of workforce housing developments for residents, planners and “decision-makers.” The tour, via bus, will begin at the Next Key Center, 1385 North Hamilton Parkway, Novato, at 9am and last until about 2pm. The event is free and lunch will be provided. Seating is limited. RSVP with Live Local (livelocalmarin.org ) by Feb. 28.
Welcome to the Neighborly!
On Feb. 16, a new Novato affordable housing group announced its launch—Stand Up for Neighborly Novato was co-founded by a collection of active community members with a goal to “advocate for reasonable housing.” Neighborly Novato co-founder Annan Paterson describes Novato’s workforce housing element as being “at a crossroads.”
“Our upcoming decisions on housing will determine if we continue to live in a vibrant, neighborly town,” says Paterson, “or become a place that prices out retirees and young families, has struggling small businesses and more congested streets and highways as Novato’s workers are forced to commute here.” Others in the group include Lynne Wasley, chair of United for Safe Schools Novato; Pamela Griffith Pond, former director of Marin Interfaith Worker Justice; Marie Chan, vice president of Sustainable Novato; Katie Crecelius, co-founder of the Marin Environmental Housing Coalition; and Marla Fields, vice president of Sustainable Novato.
Fields says the group would also like to raise the community’s dialogue about affordable housing to a more informed level. “Novato’s housing debate should be a fact-based, respectful community dialogue that includes all voices and is focused on making Novato a more neighborly community,” Fields says.
For more information, visit www.neighborlynovato.org .—Jason Walsh