The affordability issues in the San Francisco Bay Area’s housing market are squeezing the working class, and due to the region’s inventory crunch the problem does not seem to be going away any time soon. By any metric the Bay Area has the characteristics of a housing bubble; however, what makes this trend different is that experts are saying the bubble will probably not burst – it will only plateau, keeping the market rate prices out of reach for working class families.
This “new normal” will make CPP’s mission to preserve affordability even more crucial for the regional economy. Without room for new construction, we must preserve and extend what little affordability remains in the area.
At CPP, we look for existing affordable housing communities that have been financed with low-income housing tax credits (LIHTC) and/or federal or state subsidy programs and ensure those affordable cove nants don’t expire forcing the residents to pay market-rate rents. When an affordable unit becomes a market unit, there are few options and families can become homeless – a tragic consequence that has become all too common in the Bay Area.
To prevent this from happening, CPP joins forces with all the key parties – property owners, residents and the governing bodies. We lead recapitalization and rehabilitation efforts that not only improve the properties for the residents, but also extend their affordability, usually by 55 years or more.
An example of this is our recent deal in San Jose’s Monte Vista Gardens apartments. By acquiring the property, more than 100 families will not have to face a rent surge up to the market rate for an additional 55 years. To achieve this extension, we secured new LIHTC financing and agreed to an improvement plan that will invest more than $5.5 million into the rehabilitation of the community. As a result, residents will receive major improvements inside their homes and, more importantly, continue living there for many years.
In addition to Monte Vista, CPP has actively preserved affordability at other vulnerable communities throughout the region, including:
• Courtyard Plaza, San Jose, 81 units
• Park Sunset, San Francisco, 30 units
• Northgate Terrace, Oakland, 202 units
• Franco Center, Stockton, 112 units
• Oak Center Apartments, Oakland, 77 units
• Mohr 1 Apartments, Oakland, 126 units