July 12, 2016
By Dennis Kaiser
Faced with an escalating housing crisis in the Bay Area, the multifamily sector must figure out how to get projects built, while meeting affordable housing requirements. Connect Media asked Santa Clara, CA-based ROEM Corporation’s Alex Sanchez to share his insights on trends driving the market, projects shaping it and the impact of San Francisco’s new “tech tax.” Here’s what he had to say.
Q: What main trends are shaping affordable multifamily housing in the Bay Area?
A: First, the housing affordability crisis can no longer be seen as a city-by-city problem. Second, for some time now, housing affordability has been more than the tenant’s problem; the business community is seeing a pinch in operations. The jobs are here, but without somewhere affordable to live within a reasonable commute, we’re creating an unsustainable economy that may result in Bay Area employers losing their workers at all levels to other parts of the country.
Q: How are developers responding with projects in line with demand?
A: It’s become increasingly difficult for developers to find land, so there’s an active search for in-fill opportunities throughout the Bay Area. For a number of years, developers have encouraged policies that promote housing such as transit-oriented developments, mixed-use developments and high-density housing close to job centers. These are the prime parcels developers are looking for, and now local governments are on board with us. Through public-private partnerships with municipalities, we’re better able to put in place the best planning policies and financing tools to build more homes.
A: How will the proposed “tech tax” help San Francisco alleviate the housing crisis?
A: With the elimination of redevelopment funding in 2012 and the subsequent loss of $2 billion in public capital, local governments are seeking other solutions to financing more housing, such as the proposed “tech tax” in San Francisco (last year, San Francisco voters approved $310 million in bonds to fund affordable housing programs). We can definitely put to good use every bit of funding set aside for housing. Building affordable housing that is sustainable is a function of subsidies; it takes a complex combination of federal low-income housing tax credits, tax exempt bonds and private financing from lenders and investors to develop affordable housing. And it takes sufficient rental income to make loan payments and to keep the property maintained and managed.
Many communities are discussing policies and proposing long-range plans to build more housing over the next 30 years, and they are doing great work. But we can’t afford to wait 30 years to see this housing realized. The need is so urgent that our elected leaders in Alameda and Santa Clara counties have put affordable housing bonds on this November’s ballot.
For comments, questions or concerns, please contact Dennis Kaiser