On Thursday, the Housing Advisory Commission discussed the projects that should be prioritized by the Housing Trust Fund in light of constrained money and resources.
The Housing Trust Fund, which provides funds used for affordable housing construction, is expected to have $3.7 million by June 2017. According to Amy Davidson, senior community development project coordinator, new construction projects may need a minimum of $1.25 million to $6.25 million per project, meaning that the city can only support the development of one or two projects in the near future.
Although the HOME Investment Partnerships Program, which consists of federal grants for affordable housing, is the most reliable source of funding for the Housing Trust Fund, its status is tumultuous.
“(The) HOME program is the most stable source of funding, (yet) they threaten to eliminate it every year,” Davidson said during the meeting. “It’s very up in the air.”
Therefore, Davidson stated in a memo to the HAC that unless the city can find a large and stable new source of funds in the near future, they will need to reprioritize how to use its funds.
Davidson discussed the options of pursuing predevelopment loans, matching the National Housing Trust Fund, the small sites acquisition program and the Berkeley Way project. During the meeting commission members voiced their opinions on where they thought the funds should be allocated.
Councilmember Diego Aguilar-Canabal believed that funding the Berkeley Way project is an important goal for the city. Councilmember Jill Martinucci said she liked the small sites idea because Berkeley needs more affordable units to prevent displacement, and there isn’t a lot of land in Berkeley for big projects.
Some of the commission members wanted to see the predevelopement loans given priority over the other possibilities due to the immediate effects of such loans.
Under the predevelopment plan, the city would provide up to a $50,000 loan per project and $200,000 in total loans from the Housing Trust Fund for affordable housing projects. Fifty thousand dollars was selected as the cap as it is the largest amount the city manager can approve without the need to go in front of the city council, expediting the loan process. Further funds would be allocated based on the HAC’s recommendation to the council.
“I think there is an enormous need for projects to be funded. … We shouldn’t be pinching pennies hoping enough will be saved for Berkeley Way,” said Igor Tregub, vice chair of the commission, after the meeting. “If HTC burgeons, we will have opportunity to allocate some of it to Berkeley Way.”
Commission member Alejandro Soto-Vigil, however, believed that the cap of $50,000 dollars wasn’t sufficient to carry out the projects. Soto-Vigil asked for a motion to be passed that increases the ceiling of the loan to $250,000 dollars per project for a maximum of four projects if the city provides a $1 million loan to the housing trust fund.
“We’re in a housing crisis,” Soto-Vigil said during the meeting. “I don’t see why we should just have money in the bank when we can use it to help nonprofits (through predevelopment loans).”
The motion was ultimately defeated by a 4-4 vote with one abstention.
The Housing Advisory Commission will meet next April 7.
Alok Narahari is the lead business and economy reporter. Contact him at [email protected].