Burbank Housing nonproft buys Rincon Valley low-income apartment complex

In the six years since Sandra Pilisdorf and her domestic partner moved into Parkwood Apartments in Rincon Valley, they've only had their monthly rent increased once, from $1,150 to $1,200. For a retired couple on a fixed income, the below-market price was a godsend.

'We couldn't find housing, but we found this. It was affordable and clean and quiet,' said Pilisdorf, 75. 'You can't find an 850-square-foot, two-bedroom apartment around here for that amount of money.'

Rents at Parkwood Apartments will remain affordable for the next 55 years since Burbank Housing, a Santa Rosa affordable housing nonprofit, bought the 56-unit apartment complex for $15 million on Wednesday.

The acquisition signifies one meaningful step in tackling Sonoma County's longstanding affordable housing crunch, which was exacerbated by the October 2017 wildfires. More and more county residents have been priced out of most rental apartments and don't have the financial wherewithal to buy a house.

'It's not a huge number, but it's a piece of the solution,' said Mark Krug, business development manager for Burbank Housing.

The apartment complex went on the market in July, and Burbank Housing put in an offer in early August. Within a day, Krug said the offer was accepted. The city provided a loan of nearly $2.5 million to Burbank to help close the deal.

'We are very happy that the current tenants and future tenants will be able to benefit from Burbank's affordable housing model at a property that our family developed many years ago,' the seller, L.E.E. & J. Inc., said in a prepared statement.

The apartment complex, built in the late 1970s, is adjacent to Rincon Valley Community Park on Montecito Boulevard. On the other side of the park is the Rincon Valley Regional Library and Maria Carrillo High School.

One of the main motivators for Burbank Housing to buy the property was to maintain affordable monthly rents and keep tenants from being displaced. They don't intend to ask any tenants to leave and won't raise rents beyond the typical cost-of-living increases most years tied to area median income, Krug said.

'If a for-profit developer bought it, it is almost a certainty that the rents would have been increased significantly and many of the existing households would be unable to afford to live there,' Krug said.

Ninety-five percent of households living at Parkwood Apartments are at or below 80 percent of the area's median income, qualifying them as low-income. The county's median income for a one-person household is $58,850, while it's $67,300 for a couple and $84,100 for a family of four.

Additionally, 37 percent of those households at Parkwood are under 50 percent of the area's median income, which qualifies as very low-income.

A two-person household in the county with an income of $39,300 or less is considered very low income, according to the Sonoma County Community Development Commission. Pilisdorf and her domestic partner are in that range with annual household income of $36,000 from Social Security and other retirement income. Burbank Housing typically builds affordable housing complexes, and it can take up to three years for a single project. Buying Parkwood, however, took about six months as the nonprofit secured funding.

It wasn't just crucial time saved, but money, too.

'Even before the fires, constructions costs were going up really fast,' Krug said.

It would have cost about $500,000 per unit if Burbank Housing had built the complex. In buying Parkwood, the cost was about $270,000 per unit, Krug said. Each of the apartments has two bedrooms. The housing nonprofit got a $13.5 million bridge loan from the National Equity Fund, and a $2.4 million loan from the Santa Rosa Housing Authority was critical in the acquisition, too.

The city housing authority ran a notice of funding availability last summer around the time the complex was listed for sale. Burbank Housing applied for the funding and was subsequently approved.

'We saw it as preserving their rents,' said David Gouin, executive director of the Santa Rosa Housing Authority.

Burbank Housing will do a tax credit syndication later this year and plans about $1 million to $2 million in renovations, Krug said.

Debbie Dehart moved into Parkwood Apartments in 1994 and became the property manager in 2002. She lives there with her husband, son and daughter, and she described the complex as 'a melting pot of people.'

'That's very encouraging to me that they (Burbank Housing) do want to keep the tenants in their units,' Dehart said.

Melinda Keena moved into Parkwood 11 years ago, when she was pregnant with her first child. Her family of four spends $1,120 a month on rent.

She recalled neighbors knocking on doors during the October 2017 wildfires and checking in with one another.

'We tend to look out for one another, we notice when things have changed,' Keena said. 'The ones who've been here a long time, they've seen my girls grow up.'

David Rabbitt, chairman of the Sonoma County Board of Supervisors, commended Burbank Housing's low-income apartment community purchase and its plan to keep the rents affordable.

Rabbitt said the county, along with many others in the state, continues to experience a severe housing crisis that was only made worse by the 2017 North Bay wildfires.

'While the need continues to be great, every unit secured means a home for another family and the opportunity to live and work within their community,' Rabbitt said.

He said addressing the home affordability challenge in any serious way will require numerous strategies and partnerships involving all sectors of the community. He said projects such as these allow those who work in Sonoma County to keep living here as well, unlike places like Marin County.

'In some ways, that's what we're becoming. I believe we should not become Marin North,' Rabbitt said.

Laurie Lynn Hogan, a spokeswoman and director of fundraising for Burbank Housing, called buying an existing apartment building like Parkwood 'like icing on the cake in affordable housing.'

Staff Writer Martin Espinoza contributed to this story.