Criteria keep affordable housing empty
Affordable housing is sitting vacant in Nevada County because the criteria required by city housing assistance programs and the funding for county programs is limiting the number of qualified families.
Grass Valley leaders readily concede the city’s affordable housing program isn’t working, and at least one developer says until the program is improved, he won’t construct his single-family home project off of Bennett Street.
“It’s kind of like trying to thread the eye of a needle,” said John “Red” Burke, president and broker of Burke Home Loans.
County and city programs require good credit, four to five members in a household and an annual income of less than $53,000, and those applying must be first-time home buyers, Burke said.
“There’s not a huge number of people who can meet all the criteria,” Burke said.
Last year, nine families fit the county’s criteria before $750,000 worth of state funding for the county’s down-payment assistance program ran out.
“Right now we are tapped dry,” said Nina Bigley, program manager of the county’s Housing and Economic Development Department.
Kirk R. Olson of KMS Homes in Rocklin hasn’t found anyone for his townhome project – Iron Horse I – requiring three affordable units. He said he won’t start a neighboring single-family home development – Iron Horse II – that also calls for affordable housing because of the trouble he had with the townhome project. Those projects are near Bennett and Ophir streets.
“I’m very reluctant to start that (development) phase until the city does something,” Olson said.
The city, which in the past compiled a list of who qualifies for affordable housing, has no names for a list, said Community Development Director Joe Heckel.
“It’s a very time-intensive process,” Heckel said of the city’s affordable housing qualifier list.
Grass Valley’s affordable housing program is self-sustaining, with revenue replenished every time a user sells a home. The city pays 20 percent down for eligible applicant home purchases and receives 20 percent of the sale price when the person sells the home.
Credit is a big issue, and as many as half the families who come to Burke’s office have blemishes on their credit scores.
“That is probably one of the biggest hurdles they have,” Burke said. “They don’t understand the rules of the game.” Showing a documented income also can be difficult for families who are self-employed or working under the table, Burke said.
Some people might meet the city’s income standards – between 80 percent and 120 percent of median income – but they can’t get a loan for a down payment, Heckel said.
More than 50 people seeking affordable housing at Olson’s townhome project at Bennett and Ophir streets didn’t qualify because of credit troubles or an inability to verify three years of income, Olson said.
There’s no simple answer to the city’s affordable-housing problem, Heckel said.
“Yes, there is a struggle to find a family (for the affordable homes),” Heckel said. “There’s no question about that.”
The city requires Olson and most new home developers to meet a 20 percent affordable home standard.
“That’s absolutely too high,” Olson said. “Very few cities and counties are that high.”
The affordability requirement places a heavy financial burden on developers, making it difficult to turn a profit, Olson said.
Olson’s single-family home development calls for 62 single-family residences, with 12 being affordable.
Part of the problem might be the type of affordable housing offered, said Grass Valley City Councilman Chauncey Poston.
“The question is what would you spend your money on,” Poston said. Smaller lots and smaller homes might not be appealing to some in the market for an affordable home.
There are more affordable houses available for the blue-collar worker now that the “fix and flip” craze of several years ago has run its course and buyers from Marin and Sonoma counties have gone away, Burke said. Many local buyers gave up on the idea of buying a home at that time but are slowly beginning to resurface, Burke said.
“We’re starting to see affordable housing stock back in that range,” he added.
Since 2000, the county and city have required developers to include an affordable housing component with each new housing project.
Granny units and studios over garages fulfill this requirement and have become a common way for developers to meet the county’s affordable housing requirements. While the small living spaces work for young couples with a baby, they aren’t the ideal affordable housing solution for larger working families.
A City Council subcommittee of Poston and Councilwoman Jan Arbuckle are expected to review the city’s affordable housing concerns and come up with a solution. A timetable for the subcommittee’s work hasn’t been set, Poston said.
Despite the city’s troubles, Nevada County Habitat for Humanity has been successful building homes in Grass Valley.
The nonprofit has built 11 homes in the past four years, said Kathy McDaniel, the local Habitat for Humanity’s executive director.
Tips for qualifying for a home:
• Get preapproval before looking for a home.
• Clean up tarnished credit scores.
• Shop for best interest rate.
• Seek out county and city assistance programs.
City of Grass Valley’s affordable housing program:
• Individuals must meet 80 to 120 percent of the city’s median income.
• Most developers are required to set aside 20 percent of their projects for affordable housing.
Nevada City’s affordable housing program:
• A family of four cannot exceed an annual income of $52,100.
• County will grant loans of up to $100,000 per family if state funding is available.
• Program helps with homes with a maximum purchase price of $417,000.
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