Sonoma County housing construction fund formed by Silicon Valley trust, Santa Rosa chamber
To accelerate the development of critically needed housing for workers in Sonoma County, the Santa Rosa Metro Chamber is teaming up with a Silicon Valley nonprofit to create a $10 million housing fund.
The Sonoma County Housing Fund, a partnership between the chamber and Housing Trust Silicon Valley, is designed to raise and leverage local funds to increase the supply of affordable housing in Sonoma County.
The chamber will work to secure and deploy local investments for the fund while Housing Trust Silicon Valley will underwrite, approve and administer loans for housing development. It is modeled on a similar collaboration between the Housing Trust and the Monterey Bay Economic Partnership, a group of public, private and civic entities in Monterey, San Benito and Santa Cruz counties.
Chamber CEO Peter Rumble stated it is reaching out to major employers to invest in the fund, as well as to foundations, private individuals, developers and others.
“If our kids are going to have a good education, we need to make sure our teachers can afford to live here,” said Rumble. “If our technology companies are going to thrive, we need to be able to recruit engineers. If we are going to be able to care for our aging population, our hospitals need to keep nurses and doctors living here. If our tourism industry is going to continue to be the envy of the world, we need to make sure there is a thriving workforce in our community. All of this comes back to creating housing throughout Sonoma County, and while the Sonoma County Housing Trust isn’t the single solution, it is an important step forward.”
The chamber will be responsible for endorsing projects for funding the Sonoma County trust, in consultation with the Employer Housing Council, composed of the 15 largest employers and educational institutions in the North Bay along with the North Coast Builders Exchange. Rumble is also co-chairman of the housing council along with Keith Woods, CEO of the builders exchange.
Under a memorandum of understanding it signed with the chamber in June, the role of Housing Trust Silicon Valley is to underwrite, approve and administer loans for infill projects in urban and priority development areas. To encourage local investment and spur more affordable projects, Housing Trust Silicon Valley will provide approximately $2 of matching money for every $1 dollar raised by the chamber for the fund.
The funding process begins when a list of potential projects is forwarded to the Employer Housing Council for vetting according to an established criteria:
Does the project have a legitimate developer?
Does it call for building affordable multi-family (not single family) homes?
Is the site in transit-oriented urban infill areas, among other factors?
Projects are then recommended by the EHC to Housing Trust of Silicon Valley for funding consideration to determine how large of a loan is needed, and whether there are there other options and choices available.
CFO Julie Mahowald of the Housing Trust of Silicon Valley said her organization’s resources are focused on providing funds to cover acquisition costs and pre-development work, since these two aspects are the most difficult to finance.
“These front-end factors are the riskiest part of the loan process. We work with the developer as well as local, city and state sources to make it happen.”
She said HTSV funds help developers buy land, clear it, perform site work and get it ready for construction. Actual construction loans are easier to acquire.
“We don’t make loans unless we know long term financing is available.”
The trust, which financed a loan in Santa Rosa six months ago, is known for its ability to secure and fund land at below-market rates, she said. “We know how to come up with creative solutions and don’t have losses in our portfolio,” Mahowald said.
Rumble said loans would be granted at “extremely low interest rates” between 2.5% and 4%.
Local seed money could help the new fund garner even larger investments from state and federal sources, Santa Rosa City Councilman Jack Tibbetts said.
“I’d like to see us turn the $10 million goal into $80 million by leveraging Sacramento and Washington so we can get even more sticks in the ground and roofs over our families’ heads,” Tibbetts said in a statement.
Nonprofit Housing Trust Silicon Valley said it has invested nearly $230 million in programs that help everyone from people experiencing homelessness to renters to first-time homebuyers, creating nearly 18,500 affordable housing.
“It is the first nonprofit Community Development Financial Institution (CDFI) to receive a Standard & Poor’s rating, AA- because of its strong capacity to meet financial commitments,” the announcement said.
The Sonoma County Housing Trust is an outgrowth of recommendations in a five-year plan for post-wildfire economic growth submitted to the Sonoma County Board of Supervisors in July 2018 as part of the Economic Development Board’s Strategic Sonoma action plan.
The plan’s Strategic Sonoma project set priorities for recovery including building necessary housing, educating and support the workforce and establishing a permanent Sonoma County Employer Housing Council, as well as setting a goal of 30,000 new homes by 2025. These recommendations also proposed conducting an inventory of priority sites for new housing development, and exploring options for short-term workforce housing, among other possibilities.