Using innovation and strong partnerships to tackle the Bay Area housing crisis
For twenty years, Housing Trust Silicon Valley has found new ways to increase affordable housing opportunities in the Bay Area. Our belief that safe, stable, affordable housing opens the door to better living for everyone has driven our innovative lending programs and partnerships. To date, this has resulted in over $590 million invested in affordable housing, serving nearly 50,000 of the region’s workforce, seniors, special needs individuals, and people facing homelessness.
As we reflect on our twentieth anniversary, we know that our biggest accomplishments are still to come.
“Preserving the affordable housing we already have and reducing displacement is a critical way to address the regional housing crisis.”
— Craig Robinson, Housing Trust Silicon Valley Board Chair
Our efforts over the next few years will require hard work and significant contributions from the public, private, and nonprofit sectors as our region recovers from the economic consequences of the COVID-19 pandemic. But we are confident that despite the challenges ahead, Housing Trust will reach a billion-dollar impact on the affordable housing ecosystem across the greater Bay Area within the next five years.
This goal is bold but achievable. To guide our next steps, the Housing Trust Board of Directors recently approved a three-year strategic plan outlining the key elements necessary for our success.
Meeting a growing demand for multifamily and down payment assistance
We will continue to expand our multifamily lending programs throughout the greater Bay Area. As we broaden our geographical reach, these programs provide financing for new developments and permanent supportive housing across the region, from Monterey County in the south to Sonoma County in the north.
Among our flagship lending capital vehicles is TECH Fund. As of early 2020, TECH Fund has helped finance over 3,000 homes across 29 developments in San Jose, Mountain View, Sunnyvale, Redwood City, Berkeley, Fremont, and Santa Rosa.
TECH Fund’s reach continues to grow as corporate partners including Google, NetApp, and Pure Storage have joined early investors like Cisco, LinkedIn, the Sobrato Family Foundation, The David and Lucile Packard Foundation and the Grove Foundation.
What’s more, we have been heartened to learn that Disney and Microsoft are using the TECH Fund as a blueprint for their own affordable housing investments in Orange County, CA and King County, WA, encouraging us to think of ways to continue to influence affordable housing lending outside of immediate region.
Second Street Studios is San Jose’s first apartment complex entirely reserved as permanent supportive housing for the chronically homeless. The project has had different financing needs than most multifamily developments – including a loan before construction started and a second loan to bridge between the end of construction and permanent loan closing.
Housing Trust’s access to flexible innovative capital enabled us to assist Second Street Studios in several ways to ensure its fruition. In addition to predevelopment funding and the bridge loan, Housing Trust supported the project with the Finally Home security deposit program, providing security deposit grants to 127 of the 135 residents.
Our Supportive Housing Fund exemplifies the direct impact that affordable housing legislation like Measure A has on our local communities. When the housing bond was passed in Santa Clara County in 2016, it presented an unprecedented opportunity for developers to receive low cost loans for permanent supportive housing serving extremely low-income individuals and families, and those with special needs.
To date, Housing Trust has funded over half of the projects approved for Measure A funding.
Meanwhile, we are also expanding our lending programs to include new shared appreciation loans like HELP and Empower Homebuyers SCC for low- to middle-income residents struggling to purchase a home and secure the necessary down payment that, in other parts of the country, would pay for a home outright. By helping Bay Area workers secure home ownership, we are playing a part in keeping our workforce and our communities diverse and strong.
Our next step is to expand these programs outside of the Silicon Valley area where they are currently concentrated. As the housing crisis becomes increasingly widespread, Housing Trust is able to fill a void in affordable housing lending in the Bay Area. Within three years, we aim to grow acquisitions and predevelopment multifamily lending outside of Silicon Valley by 25%. Additionally, we plan to increase extremely low income and permanent sustainable housing lending and homebuyer program lending outside of Silicon Valley to comprise 10% of total lending.
New lending programs broaden our community reach
The job growth in the greater Bay Area – combined with a lack of housing – has pushed home prices and rents far beyond the growth of incomes, leaving too many people severely rent-burdened or shut out of the home buying market. Our solutions can help people like Laura Jones, a 5th grade teacher, do something that she always thought would be out of reach – own a home that she can share with the guide dogs she trains.
We are developing new lending programs that create multifamily rental homes and home buying opportunities for this “missing middle” — Bay Area residents who earn between 60%-120% of the area median income and thus too much to qualify for traditional housing assistance but too little to own or rent in many areas. In Oakland, for example, this would mean a dual-income household earning between $59,000 and $118,000. As political and corporate interest rises in keeping the “missing middle” from fleeing the region, we anticipate growing opportunities for mixed-income lending.
The Bay Area’s housing crisis is closely tied to the reality that there simply are not enough homes to purchase or rent. One of our most creative programs, Small Homes, Big Impact, was born out of our belief that Bay Area homeowners can play their part in solving the housing crisis by building rental homes on their properties. The program offers educational workshops and financial assistance to homeowners seeking to build accessory dwelling units (ADUs) — also known as “granny flats” or “in-law units” — on their existing lots. This adds viable housing options for people seeking to remain in our communities. Looking to the future, we are committed to developing a new lending program that results in the construction of at least 50 new ADUs.
Expanding outside of Silicon Valley
For the past several years, we have been committed to extending our impact beyond the Silicon Valley region. Our goal is to meet the affordable housing needs of people across the entire greater Bay Area, and to that end, we have fostered unique public-private partnerships that span from San Jose and Santa Cruz to Castro Valley, Emeryville, Berkeley, and beyond. Here are just a few examples of our programs’ regional reach:
- The Paloma Del Mar low-income senior apartments in the Santa Cruz County community of Freedom were in jeopardy of converting to market rate housing when Housing Trust together with Monterey Bay Economic Partnership made a $4 million loan to BRIDGE Housing, which acquired the apartments and committed to maintaining affordable rents. None of the tenants in the 130 units were displaced as a result of the purchase.
- We recently made our first multifamily loan in Emeryville for a land acquisition in Alameda County. The proposed project plans for 54 homes, including 14 supportive housing units for people who are currently experiencing homelessness.
- Housing Trust made a $6.1 million loan to Resources for Community Development to acquire a site in Berkeley, which will bring 87 affordable apartments for those earning between 20% and 80% AMI.
- Our loan for the Ruby Street Apartments in Castro Valley, all of which will serve families earning under 60% AMI, brings the number of affordable homes that we have helped finance in Alameda County past 500.
- The Monterey Bay Housing Trust increases the supply of affordable housing for low-income individuals and families with special needs, financing acquisition, predevelopment or construction of affordable housing in the Monterey Bay Region, inclusive of Santa Cruz, San Benito and Monterey Counties.
- The Santa Rosa Metro Chamber has partnered with Housing Trust to create the Sonoma County Housing Fund to bring critically needed affordable housing to the region, which saw its needs for housing swell in the aftermath of the devastating Tubbs Fire in late 2017.
Growing our organizational capacity
The greater Bay Area has been in the midst of a deepening housing crisis for years. At the same time that the region witnessed an incredible surge in jobs, with Santa Clara County alone adding nearly 200,000 jobs between 2010 and 2014, it also felt the consequences of a severe lack of available housing options. Everything from single family homes to multifamily housing to low income and supportive housing has seen demand only increase as supply has struggled to keep up. The National Housing Council found that 25% of all renters and 70% of extremely low-income households spend at least half of their income on housing costs alone. This is simply unsustainable if we want to maintain the Bay Area’s vibrant and diverse population.
For twenty years, Housing Trust has addressed these kinds of problems and met them with innovative solutions. As we step closer to our goal of achieving a billion-dollar impact on the region’s affordable housing ecosystem, we are committed to expanding our existing programs, adding new ones, and growing our investor partnerships.
Ensuring a Sustainable Business Model
Innovation keeps momentum going. To reach our goal of a billion-dollar impact on affordable housing, we must ensure long-term financial sustainability. To that end, we will:
- Increase our R&D investment to 10% of our total budget
- Grow multifamily lending programs by 25%
- Grow total assets by over 50% through partnerships across foundations, banking, government and employer sectors
To achieve all this, we are taking care to tend to our own organization’s evolving needs so that we can best respond to ongoing and new challenges we face in the affordable housing realm.
We are developing new marketing, technology, and communications methods and establishing improved practices of expanding our number of corporate investors. We recognize that corporate engagement and lending innovation are the twin engines that power our efforts to provide safe, stable, affordable housing options that will open doors to better living for everyone.