Los Gatos joins housing trust, with contribution of at least $250,000
Private/public group helps buyers, homeless, renters
Many strings are attached
By Nathan R. Huff
The town council on Sept. 5, enthusiastically agreed to contribute at least $250,000 to the Housing Trust Fund of Santa Clara (HTF) to assist in building affordable housing projects.
The town's contribution, which includes a host of strings, will come from the Below Market Fund--generated through development fees--and/or the Redevelopment Housing Set-Aside fund. The town has approximately $750,000 between the two funds earmarked for affordable housing.
Silicon Valley Manufacturing Group President and CEO Carl Guardino presented the HTF's case to the council. "We have had strong support from numerous cities throughout the county," Guardino said, "and we are hoping that the good town of Los Gatos will continue to show its leadership in trying to tackle this challenge by joining with us and others in this endeavor."
It quickly became clear the council needed little convincing. Mayor Steve Blanton, who was assured by town attorney Orry Korb that he could vote on the issue despite being an HTF board member, said the town had an unprecedented opportunity in front of it.
"To be able to leverage the funds and provide for our citizens to this degree--I do think this is an exceptional opportunity," Blanton said.
The HTF will leverage funds by building and sustaining a revolving loan fund and grant-making program that will work with other housing resources throughout the Silicon Valley. The public/private partnership then helps affordable housing developers--both nonprofit and for-profit--put together project funding through loans or grants.
Town staff was instructed to begin drafting a memorandum of understanding (MOU), that will include time limits on the spending of the town's contribution, how interest will accrue, and what type of housing project will be eligible and where. If the town donates redevelopment set-aside money, for example, projects must occur within the redevelopment area for the town to get "full-credit" for housing programs. Once complete, the MOU will come back to the council for approval.
Guardino said HTF was aware of the town's requirements and pleased to meet them. He added that Los Gatos' approach was refreshingly different from cities that have contributed to housing trust funds in the past, with the hope that affordable units be developed in other communities.
The HTF has already raised $12 million of its $20 million-in-24-months goal. Another $2 million is committed, and HTF has now reduced the time period to meet its fundraising goal to 16 months. Among the private, $1 million contributors are Adobe, Applied Materials, Cisco Systems, Intel, Hewlett Packard and the San Jose Mercury News. Among the public sector contributors are Santa Clara County at $2.5 million, San Jose at $1 million, Milpitas and Sunnyvale at $500,000, Santa Clara at $250,000 and, most recently, Campbell at $250,000. HTF has pledged to match all public contributions privately on a one-to-one basis.
Once the fundraising is complete, HTF will focus on three areas of housing needs. It will provide low-interest down payment/closing cost loans for first-time homebuyers, funds to assist the homeless in finding stable housing, and "gap financing" for affordable rental housing projects. Gap financing involves providing the remaining five to 10 percent of a project's cost.
Responding to a question from Councilman Randy Attaway on the speed at which HTF hoped to begin projects, Guardino said the group had no intention of sitting on the funds. "The day we capitalize is the day we want to start getting those funds out into the hands of working families and builders who are building projects for working families," Guardino said.
Several council members, Blanton in particular, expressed a desire to contribute more than $250,000. Town staff agreed to look at what sort of increase would be possible, but cautioned against overcommitting.
"We do have an abundance of housing monies," interim Town Manager Les White said. "But I also know we have a couple of other pending projects. The question is, how long have they been pending and how long might they pend."
Los Gatos, California Since 1881
