Affordable Housing Complex Stays That Way

SAN JOSE-For three decades, apartment owners have been guaranteed modest profits for providing affordable housing to low-income residents throughout California. However, when these contracts run out, many are tempted to convert their projects to market rates, particularly in high-cost areas like San Jose.

Fortunately, this was not the case with El Rancho Verde in San Jose, a 700-unit housing project that houses nearly 3,000 low-income residents. The project was financed in 1969 under special HUD affordable-housing programs with a 20-year commitment,which later was extended an additional 10 years.

By 2000, however, the owners–influenced by the need for renovations and the rising market values–decided to convert to market-rate housing. The Related Companies, a developer of government-assisted and market-rate multifamily housing, purchased the property through private and public financing of nearly $6 million and made a commitment to keep the property affordable.

El Rancho Verde, located at 300 & 307 Checkers Drive, is the largest remaining affordable housing project in the western United States. At a cost of $117 million, the Related Companies of California and Community Housing Developers Inc., its nonprofit partner, worked with private and public sector partners to preserve the 49 buildings on 37 acres for families who work in the Silicon Valley, but would not otherwise be able to afford to live in this high-priced housing market.

“The preservation and rehabilitation of El Rancho Verde guarantees that affordable housing will continue here for at least the next 55 years,” says Principal Bill Witte of The Related Companies. “This happy event results from the foresight of many, the labor of a multitude, and the goodwill of all.”

The preservation of El Rancho Verde, with its substantial rehabilitation, includes: remodeling of all 700 apartments, a new 7,500-sf recreation/leasing building and 1,800-sf community room, two swimming pools, and a fully equipped fitness center.

A recent Santa Cruz County grand jury report has put the affordable housing crunch of Northern California in the spotlight. The report blames many of the county’s problems on the lack of affordable housing and suggests that the district attorney sue the board of supervisors for not complying with a state law that requires cities to ensure availability of a certain amount of affordable housing.