With much fanfare, “Agrihood” recently opened up, a 120-unit affordable housing project for seniors across from Valley Fair on Winchester Boulevard. There is much to celebrate with the opening of this new community. But lost in all the celebration is the fact that those affordable homes took 23 years to build.
That timeline plays into a popular line of attack on affordable housing - it takes too long and it costs too much. Why?
The answer to that question could be told through many stories. My favorite way of telling the story is through the tension between the dire need for housing and, as someone with a degree in environmental studies, a strong desire to protect those last vestiges of our agricultural heritage. The story could be about the balance between community process and expediency. It could be about a slow and methodical bureaucracy. Or it could be about how an environmental law (CEQA) is misused. The story could also highlight our fundamental democratic values and why/when we should allow citizen referendums. Or it could be a story about the messed up way we fund affordable housing.
The story starts in the year 2000 when the University of California (UC) decided to offload a 17-acre agricultural research center called BAREC, the Bay Area Research and Extension Center. UC transferred it to the State of California and subsequently the State decided to sell it.
I became a part of this story while working for the Silicon Valley Leadership Group (SVLG), a high tech business association that understands the link between housing affordability and the ability to recruit and retain top talent. Early in my tenure I received a call from the State consultant who was leading the sale of the property. At the time, the Department of General Services was under direction to maximize the return on the sale of surplus property. So the consultant was working with various stakeholders, like SVLG, to determine what kind of use(s) would most likely secure the necessary entitlements to meet that objective. The consultant also knew that any attempt to build housing on a vacant piece of land with existing residential neighbors was going to be a challenge.
He was right. An opposition group was established called Save BAREC.
From the get-go, this group’s goal was to prevent any development of BAREC. Their opposition was rooted in a fundamental first question. In a community like Silicon Valley, where large and vacant pieces of property, in this case 17 acres, are almost nonexistent, is it more important to preserve the land in the midst of a city for community and environmental-serving values? This question was especially relevant given that the property was publicly owned. Preserve it as a park, or an agricultural preserve that, in an urban context, can provide exposure to nature and all the good things that flow from that.
This argument was up against an equally if not stronger societal problem, the need for housing in Silicon Valley. With people commuting long distances just to find a place to live, developable parcels like BAREC were an essential part of a community’s ability to provide housing for those in need.
This first test question was answered by the Santa Clara City Council. After weighing these competing needs, housing won. The City moved forward with the State to figure out the best way to develop BAREC.
Despite fervent opposition, a developer (Summerhill Homes) was selected by the State around 2002. They worked with constructive neighbors and stakeholders to come up with a plan that would allow market rate housing, senior affordable housing developed by Charities Housing, and 4 acres of community gardens.
It is important to note that the City viewed this site as a southern gateway into Santa Clara as well as a good location upon which to build not just market rate housing but much-needed affordable housing. Anticipating strong community pushback, the City Planning Department kicked off a six-month community planning process in 2002 with public hearings, researching site constraints/opportunities, and 3 community meetings to solicit residents’ comments about appropriate uses, scale, and intensity of future development. In 2003, the City staff developed potential alternative scenarios for how the property could be developed and the City Council adopted Re-Use Planning Principles for the future redevelopment of the site which included trying to preserve land for a 1-acre public park, market rate residential housing similar in scale to neighboring residences, and potentially 6-acres for affordable housing with community gardens.
Redevelopment $$$
Key to the success of the deal was City designated redevelopment agency (RDA) dollars to purchase the six acres for the affordable housing. For those of you who aren’t familiar with redevelopment, it was, (note the past tense) a state enabled financing mechanism that allowed redevelopment agencies (i.e. cities and counties) to establish geographic areas within which they could take the incremental increase in property taxes of redeveloped areas to finance improvements, including affordable housing. A percent of RDA money had to be used for affordable housing, serving as a significant source of funding to build affordable housing.
Getting back to the story, to recap, in 2000, UC transferred the land to the State. The State then started to work the parcel through the process to sell it to a developer. Summerhill with Charities Housing surfaced as key buyers and in 2002 they started to work with the community and city to develop a plan that matched the City’s Reuse Planning Principles. After a whole lot of work, and many community meetings, the Summer Hill/Charities plan was passed by the Santa Clara City Council in 2007.
But that was not the end. Save BAREC filed a legal challenge to the CEQA report. CEQA you ask? Let’s back up a bit and tell this side of the story.
What’s CEQA?
CEQA (California Environmental Quality Act) is a law that requires the disclosure of environmental issues when developing a project. It’s basically a thorough report outlining all key environmental concerns (plus historic resources.) It is well-intentioned but can be misused to stall or stop projects. How do projects get stalled? Anyone can file a CEQA challenge alleging that the statute was not followed and then the project gets held up in court. This uncertainty causes developers and public agencies to opt for a belt and suspenders approach, spending more money and time on a comprehensive CEQA report that will withstand any legal challenge. So, baked into the timeline is a whole lot of CEQA due diligence and cost. In this case, the real CEQA issues revolved around the need to clean up the site from the agricultural research performed on the site - chemicals.
And then, democracy strikes!
In parallel with the CEQA challenge, the Save BAREC collected enough signatures to put the plan to a vote of the people. At this point, Summerhill had to regroup and decide whether to take the time and money needed to wage a campaign. The vast majority of voter-initiated referendums to stop housing developments across the state tended to be successful, and that gamble weighed heavily against the time and money invested in the project so far. With that in mind, the developer decided to move forward in the hopes that voters would understand the need for more housing.
In 2008 both attempts to stop the project failed. The CEQA challenge was dismissed and voters said yes to housing at BAREC.
It’s important to recognize that addressing these challenges cost the builder not only a million and a half dollars, but even more importantly, delayed the delivery of homes to the market by a year and a half, precious time during which some big changes came about that threatened to nix the entire affordable component….read on
Governor Moonbeam Returns!
In 2009 Summerhill finally started building the market rate portion of the property while Charities Housing, the chosen developer of the senior affordable housing could now begin in earnest to finalize the project and cobble together the financing. Loans, tax credits and redevelopment money would be needed to make the project go, a process in and of itself that is complicated and expensive. The sheer number of people needed to navigate the financing of affordable housing would make even the staunchest liberal, big-government lover cry at all the public money flowing to the teams of lawyers and syndicators associated with the tax credit industry.
While Charities Housing was getting its ducks in a row, in 2011, California voters returned Governor Jerry Brown to office. One of the very first things he did was dissolve redevelopment agencies. Why? Because money that flowed to redevelopment agencies was money that was not going to schools which the state then had to backfill. (I’m overgeneralizing here.) Regardless, approximately $12 million in City Redevelopment Agency Affordable Housing Funds were already designated for the planned 165-home Senior Affordable Housing Development but once the dissolution took effect, the money to be used to purchase the six acres of BAREC for affordable housing was gone.
The market-rate portion of the development was built by Summerhill, sold out in 2014, but the affordable housing project was now dead.
Then in 2015, the City of Santa Clara sent out an RFP asking for development proposals for the City owned portion of the land. Core Affordable was the selected developer and they began the same process.
Groundhog Day
One might logically assume that the City and developer could simply pick up where the story left off and get an affordable project approved/built lickety split. But no. The story is much the same with all the same chapters – CEQA, community opposition, financing, permits.
Finally, in October of 2023, 165 senior homes were completed with plans for more. But instead of 4 acres of gardens as approved in the original project plus community open space the public ended up with a 1-acre community garden.
When people complain that it takes too long and costs too much, this story helps illuminate why. So, what could have helped speed up the process? While there is much room for improvement, the direction below is focused on the spheres of influence that we at the local level control.
Elected Champion: When elected officials are afraid to take a stand and show leadership, projects flounder. Strong champions empower staff and create focus/direction. That did not exist for this project.
Community Engagement: There’s a balance between community engagement and making the process the project. In this case, without strong direction from the Council coupled with the opposition from Save BAREC, city staff opted for lots and lots of community meetings which dragged out the process. Cities should create clear and predictable community processes and timelines.
CEQA: One thing I didn’t mention was that once the draft environmental report was complete and out for community input, the City of San Jose made a decision to expand the neighboring shopping mall, Valley Fair. The City of Santa Clara then opted to redo the traffic analysis based on this information which added to the overall timeline of the project. This was a city decision, again, based on many factors that relate to the threat of litigation, community opposition and the lack of a strong council champion.
Building affordable housing IS expensive and it DOES take too long. But simply being a critic is the easy way out for our elected officials.
In the wise words of Taylor Swift, our city councils and mayors need to recognize that “I’m (part of) the problem, it’s me” because, in the context of an already difficult affordable housing world, when elected officials:
Pander due to the fear of not being re-elected,
Don’t have the trust of the community,
Haven’t invested in the types of relationships that marginalize unreasonable actors,
And allow a few voices to miss the opportunity to constructively guide the investments of developers for community good
We end up with projects that take too long and cost too much.
We all need to stand up for affordable housing at community meetings, fix our city processes, and get some affordable housing built!
Comments