News

North Bayshore a boomtown for cheaper housing -- if it gets built

City tries to balance affordable housing needs with developer incentives for new residential area

With the potential to more than double the city's affordable housing stock, Mountain View's goal to transform North Bayshore into a new residential neighborhood would be a game-changer for Silicon Valley's housing crunch.

But Mountain View faces a true dilemma as it fine-tunes its master plan for building about 10,000 new apartments in the tech campus that's home to Google. Could the city's road map ultimately be completely ignored?

That fear played a predominant role in Tuesday night's discussion as City Council members attempted to strike the right balance between extracting hefty affordable-housing concessions from private developers without going too far and causing developers to walk away. Underpinning the talks, council members repeatedly acknowledged that their vision depends on satisfying just one big player -- Google, which owns most of North Bayshore. The tech giant was conspicuously absent from the meeting.

For months, city officials have said 20 percent of the new housing of the densest new apartments built in the area should be affordable units. But at the meeting, many speakers encouraged city leaders to go much further.

"You should set a goal of building 30 percent affordable housing for North Bayshore," suggested Bob Emmett, speaking for the service-workers group Silicon Valley Rising. "Our workers do not earn enough to be able to afford the rising cost of housing locally, even with two workers in a household."

Emmett was just one in a line of speakers who argued that Mountain View should seek more from one of the world's wealthiest companies. That idea of maximizing affordable housing gained some support on the council. Councilwoman Margaret Abe-Koga, who previously opposed residential growth in North Bayshore, became the night's leading advocate for demanding more below-market units. At minimum, she said the city should seek 25 percent affordable units.

"Can we be a little more creative and ambitious here and really answer to the needs of our area?" Abe-Koga said. "Maybe it's time to look at inclusionary zoning policies and higher percentages because I see there's a way to get more (below-market) units."

But the idea spurred nervousness among other council members. Mayor Rosenberg warned the city could hear a chorus of "crickets" if the rules went too far. Other council members pointed to San Francisco, where onerous affordable housing rules can serve as a convenient pretext to sink new housing projects. The 20 percent level ended up remaining in place.

Of that 20 percent, the new subsidized units would be split between those affordable to people with very low, low, and moderate incomes. As an incentive to encourage for-sale housing, city officials agreed to allow developers to instead set aside as much as 5 percent of their affordable housing obligation for market-rate ownership units.

The council took a series of straw votes on small changes to affordable housing guidelines, tweaking the density bonuses, the mix of pricing for various income levels and the length of time that any new housing would have to remain subsidized.

Councilmembers John McAlister and Lenny Siegel both urged city staff to figure out a way to make new office space contingent on developers building new housing. Council members also expressed support for allowing developers to dedicate land instead of building affordable-housing units -- an idea that staff suggested could result in more housing being built.

"If we end up building these 9,800 units in North Bayshore, we'll end up with more low-income housing than we've ever built in Mountain View," Siegel said. "No matter what we do, we're able here to serve a lot of people."

Google officials sent a letter to the city in advance of the council meeting, but the company commented only on the length of time they would be required to keep new housing affordable. City staff had proposed a percentage of new housing in North Bayshore should be kept at below-market rates in perpetuity.

John Igoe, Google's real estate director, suggested a term of 55 years, saying that was consistent with state law. He warned that prolonging this obligation would put a burden on the usage, financing and transferability of property. Discussing these concerns, council members indicated they were willing to negotiate.

Closing the talks, the council touched on one of the biggest housing questions of all -- Who should get to live in these new apartments? Among the ideas proposed, elected leaders suggested limiting it to North Bayshore employees or possibly those working within a 3-mile radius. But city staff warned this could create a legal quagmire.

Without making any final decisions, council members suggested that people who work or currently live in Mountain View should get priority.

Comments

50 people like this
Posted by USA
a resident of Old Mountain View
on May 19, 2017 at 3:12 pm

USA is a registered user.

Neither developers nor the city can print money. Every dollar developers lose on "affordable housing" comes from someone else -- the people paying market rate.

A 30% portion means basically that two families subsidize one family. If the cost of a subsidy is $100,000 for a housing unit, the two other families would have $50,000 added to their housing costs.


4 people like this
Posted by a MV resident
a resident of North Bayshore
on May 19, 2017 at 10:34 pm

Businesses have to make their profits one way or another, so if we require subsidized units, they will pass that price along to the unsubsidized units, thereby giving benefits to a small few at a cost of a great many. Rather, why not strongly limit zoning to build many more smaller units (ideally owner units, not rentals), so that developers can aim for the same profits over the same amount of land, spread across many more units, thereby reducing the cost of housing for all?

Increasing the cost of development to pay for added city infrastructure is fair since all residents benefit from that. Increasing the cost of development so that a lucky few may benefit from a subsidized home, should be the policy of last resort, not first (especially subsidies that have a fixed time limit, just look at Avalon and their expired subsidies).


60 people like this
Posted by DDD
a resident of Another Mountain View Neighborhood
on May 19, 2017 at 11:16 pm

Honestly I don't see why the council has to spend so much time micro-managing the development; they have neither the expertise nor the foresight to see where the market will be X number of years from now on.


1 person likes this
Posted by DC
a resident of Sylvan Park
on May 20, 2017 at 10:36 pm

Until you look up low income in the area
The U.S. Department of Housing and Urban Development, which recently released its 2017 income limits — a threshold that determines who can qualify for affordable and subsidized housing programs.
Santa Clara County, $84,750 is the low-income threshold for a family of four.


4 people like this
Posted by Priced out
a resident of North Bayshore
on May 21, 2017 at 8:26 am

Affordable housing is triage that addresses the worst symptoms of the housing crisis while making the problem worse for anyone not lucky enough to meet the absurdly low levels to qualify. It seems a waste of political capital. Limit office growth to residential growth or under it and your problem solves itself over time. Just enable developers by giving them wide ranging latitude to build what is needed and provide the infrastructure to support. Can you name any place that has solved or even made market prices depreciate by building affordable housing? Expanding special classes slightly doesn't seem like a solution at all. Housing affordability is effecting everyone here.


2 people like this
Posted by The Business Man
a resident of Another Mountain View Neighborhood
on May 21, 2017 at 2:13 pm

The Business Man is a registered user.

Here is a simple observation:

You only provide luxury apartments in the market, you force people to over pay for what services they want or need. This is the strategy of supply-side economics. The suppliers work to shape what options the market can choose from. NOT WHAT THE MARKET WANTS. The market is simply like cattle. IF ONLY PREMIUM 93 OCTANE GASOLINE IN THE GAS STATIONS IN A TOWN, NO AVAILABILITY FOR 87 OCTANE GASOLINE, YOU FORCE ALL CUSTOMERS TO BUY OVERPRICED GASOLINE.

The owners complain they are not making enough return on investment. The costs of upkeep and services involved in luxury facilities is significantly higher. That was the CHOICE of the developer. The public is not responsible for that mistake.

The housing market is treated very different to any other market because it is critical in order for any other business activity to have any chance to succeed. Simple enough, you have no workers in the area, and you have no business.

The apartment industry has been arguing a false concept that the market is efficiently providing the choices to the consumer. The truth is that by manipulating the market options, they have manipulated the prices. This has been the intent all along. I am surprised no one ever challenged it as anti-trust market violations.


Like this comment
Posted by Xyz
a resident of Rex Manor
on May 26, 2017 at 11:24 am

First we have rent control.
Next we build cheap housing.

For those who want to play God, I think you should study the unintended consequences first. As a MV resident, we live the mess you left to us.


Posted by Name hidden
a resident of Cuernavaca

on Sep 25, 2017 at 5:19 pm

Due to repeated violations of our Terms of Use, comments from this poster are automatically removed. Why?


Sorry, but further commenting on this topic has been closed.

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