Affordable Housing Finance

REGIONAL REPORT

WEST

Paseo Senter Fills Big Need

AFFORDABLE HOUSING FINANCE • October 2008

BY Donna Kimura

SAN JOSE, CALIF.

Paseo Senter at Coyote Creek is making a big difference by providing more than 200 new affordable apartments in Silicon Valley's tough housing market. The need for the development was obvious from the start. On the first morning of leasing, 45 people were waiting outside for the doors to open. The strong and steady demand prompted the staff to call for additional office help. In all, more than 3,100 people applied for the apartments.

About 80 percent of the applicants came from less than 10 miles away, according to Vanessa Cooper, director of operations at Charities Housing Development Corp., a leading nonprofit developer in the area. Charities Housing teamed with CORE Affordable Housing, an affiliate of The CORE Cos., a San Jose-based for-profit builder, on the $80 million project, which also provides valuable new space for service providers.

Cooper attributes the strong neighborhood interest to the outreach that was done at nearby social-service agencies and schools.

"The advantage is that many of the children are staying in the same schools, and families didn't have to look for new jobs," she said. "Other residents were working in San Jose but living an hour or more away."

The one-, two-, and three-bedroom apartments at Paseo Senter are reserved for households earning no more than 45 percent of the area median income (AMI), with a third of the units targeting those earning no more than 25 percent of the AMI. The majority of residents are Vietnamese-Americans, a reflection of the city's large Southeast Asian population.

Land swap

The lowest monthly rents are $260, which is about a fifth of the cost of a similar unit on the open market, estimated Leslye Krutko, director of the San Jose Housing Department, which helped finance the project.

"Every unit that we can get is important here," Krutko said, citing the department's goal of building 19,000 low- to moderate-income units in a seven-year period.

In addition to having two developers, the large project needed strong local support, including a land swap by the city. San Jose owned property that it planned to use for a park, while a private owner held a nearby site that was larger and better suited for a park. A trade allowed for Paseo Senter to be built on the site that had been owned by the city, according to Paul Ring, development project manager at CORE.

Designed by the architects at David Baker + Partners in San Francisco, Paseo Senter includes two parking garages with five levels of parking, a swimming pool, and a tot lot. The apartments wrap around the garages and shield them from view. In a unique touch, residents can park on the same level where they live.

Painted in bright tropical hues, the stylish development is organized around a central paseo, which means walk or path, with community areas and space for service providers, including a preschool. Another service at the property is a kin caregiver program by Catholic Charities, which supports non-parent relatives and the children they are raising.

Paseo Senter is also home to the Native Doors Networking Senter, which works to develop academically strong Native American students. The new facility provides room for tutoring, community meetings, and elder luncheons. Financing for the development included more than $32 million in low-income housing tax credit equity from Centerline Capital Group. U.S. Bank purchased the tax-exempt bonds that were issued by the city of San Jose to provide a $54 million construction loan. The city of San Jose also provided a $12 million loan, and the state Department of Housing and Community Development provided a $19 million loan through its Multifamily Housing Program.

Santa Clara County and the Housing Trust of Santa Clara County each provided loans of about $1 million. Another $856,000 came from the Federal Home Loan Bank of San Francisco's Affordable Housing Program, and the Department of Housing and Urban Development provided $400,000 through the McKinney-Vento Supportive Housing Program.