Recent headlines herald the ever-growing housing affordability gap in the San Francisco area.
According to a CBS News report on June 26, a family that earns $117,000 in the Bay Area is now officially considered low income while the median price for a single-family home has soared to $935,000. And, according to RentCafé, a two-bedroom, 1,016-square-foot market-rate apartment rents for $4,382 a month. Those are mighty steep numbers for individuals and working families struggling just to get by, and highlights the dire need for affordable housing in the area.
As one of the most respected providers of affordable housing in the State of California, AMCAL MultiHousing, Inc. was pleased to have completed a beautiful, newly constructed affordable housing community called Pacific Pointe in August 2016 with 59 affordable units.
As a privately owned and operated community, Pacific Pointe was the first 100 percent affordable housing development in the San Francisco Shipyard area. The community has since won awards and accolades, and continues to serve the community with affordable rents and life-enhancing social services. When AMCAL completed the community in 2016, it was leased up immediately. Tenant selection criteria ensured that the project maximized benefits to local residents in need of affordable housing. Priority was given to anyone who could demonstrate family lineage to the area. Residents also undergo a regular review that demonstrates their financial eligibility to qualify for affordable rent.
Annual budget reviews are a common practice that affordable housing owners conduct to ensure planning for increased annual expenses and unforeseen circumstances. During its annual fiscal review process of the project that included input from all partners in 2017, AMCAL concluded that it was prudent to modestly increase rents to ensure the long-term fiscal viability and maintenance of Pacific Pointe. Although guidelines issued by the Mayor’s Office of Housing and Community Development allowed rent increases of as much as 12 percent higher than existing rents, rents at Pacific Pointe were only raised 3 percent. Currently, Pacific Pointe’s rents are $140-$190 less per month than other affordable properties in the immediate market (within five miles of Pacific Pointe).
Minimal cost sharing by residents through slightly higher rents helps ensure that an affordable housing property is properly maintained, remains viable both in the short- and long-term, and serves the greater good by ensuring that current and future residents enjoy the benefits of living in an affordable, well-maintained and safe home.
Contrary to false statements made in a recent opinion piece that suggested AMCAL earns $30,000 a month from the community’s rental income and a further proposed rent increase will only benefit AMCAL’s bottom line, AMCAL’s benefit is capped at $2,100 a month regardless of rent levels. If Pacific Pointe realizes any funds over and above normal operating expenses in any given month, those funds sit in the project’s operating account. Any funds in excess of $25,000 a year are turned over to the San Francisco Mayor’s Office of Housing. The City is then able to use those funds to help pay down city loans, for example, and pump more money back into The City’s efforts to develop muchneeded affordable housing.
AMCAL receives zero benefit from rent increases at Pacific Pointe.
We know affordable housing in San Francisco is critical and appreciate the passion that San Franciscans have to ensure continued affordability. We share that passion as one of California’s top affordable housing providers. We understand, however, that the cost of maintaining and operating such communities must also be considered.
Affordable housing is a precious resource in any community. It can take years for an affordable housing project such as Pacific Pointe to get built because such projects always undergo a community-intensive review process, and usually require many layers of approval and funding. AMCAL saw the need for affordable housing in the Hunters Point area several years ago, and spent over $1.5 million in capital investment before the project was even approved, and then a wealth of time and effort to bring the Pacific Pointe community to fruition, when few, if any, other entities were successful in doing so.
Because such projects take so long to develop because of the rigorous, community-intensive process that it must undergo to get built, AMCAL hopes that residents of Pacific Pointe are proud to call it home.
As a responsible developer and manager of affordable homes for 40 years, AMCAL well understands the double bottom line of affordable housing communities — keeping them both affordable for residents while also keeping them fiscally viable and well maintained and operated for the long term.
AMCAL’s desire is to balance both goals for Pacific Pointe, and we look forward to continuing to responsibly manage the community so that residents can continue to enjoy the benefits of this beautiful community for years to come.
Arjun Nagarkatti is president of AMCAL Multi-Housing, Inc.