Developers show strong interest in Santa Rosa housing subsidy

Santa Rosa is getting significant interest from developers seeking some of the $3 million in subsidies the city is offering to spur the construction of affordable housing.

The city has received applications from eight developers who say they could use the funds to get their projects under construction, some as early as this fall.

No decisions have been made yet about which, if any, applications to grant. The city is still reviewing the proposals and following up with developers to clarify details. Then, the applications will be vetted and presented to the City Council in March.

But taken together, the strong response leaves the city optimistic that the funds, which the council approved in November, could spur some much-needed construction of affordable housing soon.

“We are encouraged that one or more of these applications will produce affordable housing for Santa Rosa as early as spring of 2018,” said David Gouin, the city’s director of Housing and Community Development.

The promising response comes as city officials struggle to create more affordable housing in Santa Rosa, where diminished construction activity combined with the surging economy have caused rents to soar.

Sonoma County’s average apartment rents for $1,792 a month, a jump of ?48 percent in five years, according to Real Answers, a Novato company that tracks rents at large apartment complexes. The average price for a two-bedroom, two-bathroom unit is $2,080, an increase of 46 percent over five years.

About 4,000 of the city’s 70,000 housing units are considered affordable, meaning the city manages them for low- and moderate-income families. They account for nearly half of the affordable units in the county.

The city has aggressive plans to boost its affordable housing over the next seven years, with a goal of adding 2,500 new units, according to the city’s Housing Action Plan.

Lacking the funds to build the units itself, the city is trying to encourage developers to build more affordable units into their complexes instead of merely paying a fee to the city when they don’t, explained David Guhin, director of the Planning and Economic Development Department.

The city is working with a major developer, City Ventures, to build 11 affordable units into one of its projects in the city’s southwest sector instead of cutting the city a check for $2.2 million in fees, Guhin said. Once constructed, the units would be managed by the nonprofit Housing Land Trust of Sonoma County.

The city’s subsidy has drawn interest from a range of developers. Details of each proposal were not immediately available Friday, in part because some parts of the application were still being confirmed, Gouin said.

But the proposals ask for a total of $16 million and range from a project seeking to construct just one home to one that could see six dozen units built in Roseland, Gouin said.

The one-unit project is being proposed by Habitat for Humanity, which is asking for $250,000 to ?help rehabilitate an existing home and subdivide ?the lot to allow three others to be constructed, Gouin said.

At the other end of the spectrum is Foster City-based developer MidPen Housing, which is asking for the full $3 million toward the construction of ?72 units in the Roseland Village Neighborhood Center Project. Occupancy is not expected until 2020, Gouin said.

Once the staff analysis of the applications is complete, a City Council member will be asked to review them in detail, after which the full council will get to weigh in on the dispersal of the subsidy.

The city will use the money to secure as many low-income units as quickly as possible - and preserve them as low-income units for as long as possible, Gouin said.

You can reach Staff Writer Kevin McCallum at 707-521-5207 or kevin.mccallum@pressdemocrat.com. On Twitter @srcitybeat.