Affordable Housing Finance

REGIONAL REPORT

West

Connecting Housing and Health

AFFORDABLE HOUSING FINANCE • April/May 2009

Two nonprofits join forces to build Seven Directions

BY DONNA KIMURA

OAKLAND, CALIF.—Two critical needs—affordable housing and health care— are being met inside Seven Directions.

The new mixed-use development is home to 35 affordable apartments and a 20,000-square-foot medical and dental clinic.

It is a sacred place for Martin Waukazoo, CEO of the Native American Health Center, Inc. (NAHC), a local nonprofit that delivers health services to Native Americans and others in the community.

“It provides healing for the community,” he said at the project’s opening.

Eight years earlier, he had contacted Lynette Jung Lee, executive director of the nonprofit East Bay Asian Local Development Corp. (EBALDC), to see if her housing group would work with his health-care organization on a project.

Both firms have been active on the streets of Oakland, and the leaders have known each other for 20 years. They had never teamed to develop a project before, but it made sense to combine their expertise.

“NAHC staff discovered through a client survey that one of the biggest issues their clients were facing at the time was a rapid increase in housing expenses and displacement from the neighborhood,” says Ener Chiu, project manager at EBALDC. “So they committed to solving that problem and approached us about creating a center that would allow them to tackle medical access and housing at the same time. A mixed-use project was how we accomplished that goal.”

Although the two nonprofits worked closely to develop the single building, two distinct and separate projects are inside. NAHC owns the clinic, and NAHC and EBALDC jointly own the housing. The groups entered a complicated airrights subdivision agreement. The nonprofi ts also have a reciprocal easement agreement that provides guidance on the management and maintenance of the common areas and expenses.

Culture meets design

To get the needed neighborhood approval, Seven Directions went through several designs. The biggest challenges was working on a small site and creating a building that could incorporate the different uses, says Lee.

The project was designed by Pyatok Architects, a firm that has worked on about 35,000 affordable housing units over the years.

“We had some nice long talks with Marty Waukazoo about the role of culture in the health-care delivery system and building a sense of community,” says Michael Pyatok.

The architect understood that it would be important to include strong expressions of Native American culture in the project. The most noticeable design element is a four-story steel sculpture of an eagle feather that graces the front of the building.

Seven circles are also found within the project, including a large talking circle, a concrete bench that seats about 50 people, in the courtyard.

The $16.4 million housing portion of the development was financed with $6.7 million in low-income housing tax credits (LIHTCs) allocated by the California Tax Credit Allocation Committee and syndicated by MMA Financial.

Seven Directions is an excellent example of an intelligent infill development, says Bernard Husser, managing director of acquisitions at MMA, citing the project’s mixed-use and proximity to transportation.

Its strong community ties and broad range of affordability for families earning between 30 percent and 60 percent of the area median income were also important.

The California Housing Finance Agency provided an $8.8 million construction loan and a $1.6 million permanent loan.

Additional funding included a $2.9 million loan from the state Department of Housing and Community Development’s Multifamily Housing Program; $4.5 million in predevelopment, construction, and permanent loans from the city of Oakland; $240,000 from the Federal Home Loan Bank of San Francisco’s Affordable Housing Program through Bank of the West; and $360,127 in deferred developer fees and general partner equity from EBALDC.

The housing units filled quickly. More than 700 people applied for the development’s 17 LIHTC units. There are also 18 Sec. 8 units and one manager’s unit.

Carlos Martinez, who works at a dry cleaning business and holds another job at a clothing store, moved with his family from a shelter to one of the apartments. “For me, this is a new beginning,” he said at the development’s opening.