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Press Contact: Matthai Chakko, (510) 981-7008

Grayson Apartments offer a glimpse into the many strategies required for affordable housing.

Berkeley, California (Tuesday, October 02, 2018) - What do the trading of state greenhouse gas emission permits, new market-rate rental units, and a 2016 countywide housing bond have in common? 

Funds from each were used by city staff to weave together a financing plan for an affordable housing project now under construction in West Berkeley.   

The result is nearly two dozen units for some of Berkeley's most vulnerable: those with a disability, people living with HIV or AIDS and youth needing housing as they transition out of foster care.2018-10-02 Grayson

"Money for affordable housing is always scarce - especially in the midst of a housing crisis," said Dee Williams-Ridley, the Berkeley City Manager. "Using the savvy of our staff is critical to protecting vulnerable populations."

The funding for the $19 million project, located at 2748 San Pablo, was made possible by $2.6 million in loans from the City's Housing Trust Fund - a pot of money created in part through fees on new, market-rate rental housing as well as federal funds.

In Berkeley, all market rate rental complexes must either provide 20 percent of the units at below market rates or pay in in-lieu fee of $37,000 per market rate unit.  Funds collected through this program go into the Housing Trust Fund, which is then leveraged by low income housing developers to produce complexes like Grayson Apartments.

The City also worked with nonprofit developer SAHA to apply for a $3.8 million in Affordable Housing and Sustainable Communities program funds. These funds are generated through the state's greenhouse gas cap and trade program, with companies purchasing the rights to emit higher levels of greenhouse gases - and the revenues used to fund programs that reduce greenhouse gases.

In the case of Grayson Apartments, the "cap and trade" program helped fund the Grayson Apartments housing and purchased an AC Transit hybrid bus serving the project area, free transit passes for Grayson residents, and bicycle education.

Often times, funding sources shrink for reasons beyond local control.

The federal government creates Low Income Housing Tax Credits, which the state distributes through a competitive process. SAHA applied for credits to be used for the Grayson Apartments. However, as the federal government considered a reduction in corporate tax rates, the demand for these credits declined, resulting in a diminished value for the credits.

When demand was higher, Grayson estimated getting over $1.00 per tax credit, but pricing dropped to around $0.89, resulting in a gap in the project financing.

To bridge that gap, the City applied with Alameda County for $700,000 in funds from A1, a $580 million affordable housing ballot measure that voters passed in 2016.

"Our commitment to affordable housing requires finding creative ways to leverage local, state, and federal resources to support Berkeley," said Kelly Wallace, Director of the City's Department of Health, Housing & Community Services. "Having staff who know how to mine different sources of money plays an important role in building a healthier community, one with housing for all."

The City's support for Grayson Apartments illustrates just one of the strategies the City uses to create affordable housing. The Housing Trust Fund provides loans for rent- and income-restricted housing. The Below Market Rate (BMR) programs require market rate housing developments to either pay fees to the Housing Trust Fund or provide affordable units. Since 1990, a total of 1,400 affordable units have been created or preserved through Berkeley's Housing Trust Fund - not including all of the below market rate units that have been built in new complexes.

Grayson Apartments will have four stories, including a small ground floor commercial space which will be used as a Pilates studio. The upper three floors will have the residential units, as well as shared spaces such as a computer room, laundry room, and community room. Nine of the 22 affordable units will be reserved for youth transitioning out of the foster care system, and three will be reserved for people living with HIV or AIDS. Grayson will also serve 13 households with a disabled family member.

Construction is estimated to take 16 months, with completion expected in summer 2019. Prior to the completion date, SAHA will make application information available at sahahomes.org.  The City is proud to partner with SAHA on this project to house our neighbors in need.


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