It will soon be easier for middle and moderate-income renters to afford to live in Dublin.
In a unanimous vote during a public hearing on June 1, the city council agreed to become a member of the California Statewide Communities Development Authority (CSCDA). Dublin will now enter into a bond-issued public benefit agreement with the CSCDA to purchase the Waterford Place Apartments. The contract will allow the city to convert the 390 apartments on Tassajara Road into rent-restricted units for middle- and moderate-income households.
To make the project possible, the city will not collect annual property taxes from the apartments for a 30-year period — totaling approximately $15.6 million of potential revenue. Dublin will have the ability to sell or refinance the property after 15 years. It will also receive all future value of the property, estimated at $400 million at year 30.
“It’s extremely challenging right now to build affordable housing, and this program is being widely adopted throughout the state as a way to convert existing units and provide immediate financial relief to renters,” said Jon Penkower, a CSCDA representative.
For current residents, the average rent for a two-bedroom apartment in the Waterford apartments is $2,550 per month. Under the new program, rents would be reduced to $2,371 a month.
“Do I wish it were a greater reduction? Yes,” said Mayor Melissa Hernandez. “I don’t think the savings are that big of an amount … It has some positives, it has some negatives, but we are here to provide housing for our residents and especially our middle class.”
Income-qualifying current tenants would receive the reduction upon renewal of their 12-month lease. Nonqualified residents would remain at the current rate. No increases would ever be allowed unless the area median income (AMI) rises, at which point the maximum rate hike allowed would be 4% per year.
The Waterford apartments, built in 2003, are luxury one- and two-bedroom apartments with resort-style amenities, including a community pool, fitness center and spa. The apartments are part of a larger, mixed-use development that includes the Shops at Waterford. Approximately 14,000 square feet of retail space is incorporated into the ground floor of the apartment complex.
The project is aimed primarily toward professionals, such as teachers, caregivers, social workers and entry-level police officers, who could use the reduction in rent to put back into the community or to save for a home. A two-person household making up to $87,700 a year would be eligible for a one-bedroom unit at 80% of AMI for $2,002 a month.
Several speakers praised the program during the public hearing and asked the council to pass the proposal.
“I am a program director for a local nonprofit in Dublin, and it is a goal of mine to work and live in the same place,” said public speaker Marybeth Wilson. “If rental rates were lower, this would give hope that I could live in Dublin … please support this plan to make it more affordable for people to live in Dublin.”
The Waterford project was initially proposed during the May 4 city council meeting, at which staff was asked to return with additional information, including how the commercial component of the program would be impacted by the CSCDA membership.
“This is part of a mixed-use development separately owned by the Shops at Waterford, and there would be no change (for the Shops),” said Kristy Wheeler, Dublin’s assistant community development director. “The (commercial) owner would continue to pay, and the city would continue to receive property taxes from the owner.”
There is also current legislation proposed, Assembly Bill 787, which would authorize a city or county to include in its Housing Element Annual Progress Report (APR) the number of multifamily units that were converted to deed-restricted rental housing for very low-, low-, and moderate-income households and reduce its share of regional housing need for the income category of the converted units. If passed, staff believes a portion of the Waterford Apartments would qualify to meet the city’s affordable housing mandates.
Vice Mayor Shawn Kumagai called the project a worthy one for the city and its residents.
“I don’t really look at this in terms of an investment, although we certainly have a responsibility to be good stewards of the taxpayers money,” said Kumagai, “But this is a public benefit that we have identified as a priority in our strategic planning. We are taking a pretty prime property, and we’re saying we're going to cap and suppress the cap over time to benefit our future residents. That is a good thing.”
Next steps include outreach to the current residents of the Waterford Apartments, the general public and continued negotiations with the applicant.