A 41-unit affordable housing development will soon be ready for occupancy in Hollister, according to Dana Cleary, director of real estate development for CHISPA (Community Housing Improvement Systems and Planning Association, Inc.), a nonprofit, Community-based Housing Development Organization that has built more than 2,268 single-family homes and apartments since 1980.

CHISPA began accepting applications Oct. 3, 2015, as construction began on the Buena Vista Apartments at 810 Buena Vista Rd. So far, more than 800 applications have been submitted, and will continue to be accepted until Dec. 30.

Cleary said the apartments were originally scheduled to open in the beginning of March 2017, but have been delayed a couple weeks due to inclement weather.

“We started construction around December last year and then the rains slowed us down. Now we’re trying to catch up,” she said. “It will probably be around the end of March, possibly April.”

Cleary said after the application deadline, each application will be assigned a random number.

“It’s not first-come, first served,” she said. “So someone who is real quick at filling in the applications does not have an advantage over someone who is not so quick. Then we start reviewing the applications and we will ask them to provide us with all the information we need to complete the application.”

The process is done this way, she said, to prevent people from standing in a line early in the morning to turn in their applications.

“That’s really unfair to somebody who is disabled or who works in the morning,” she said.

Cleary said the criteria for consideration includes income ranges, proof of employment, tax returns, credit and police background checks. While the entire complex was designed for low-income individuals, it is parceled up so families of various levels, as well as family dynamics, can qualify.

“We have apartments for people of varying income ranges,” she said. “We aren’t going to provide housing to someone who can’t afford it or to someone who makes more money than the restrictions allow.”

Cleary indicated the initial application process only takes about five minutes, so people in need of affordable housing should do so, even if they think they don’t qualify. She said apartment rental rates would be based on 30, 50, and 60 percent of median income levels, as well as how many family members will live in a unit. Those who do qualify and are chosen to occupy units will need to sign a year-long lease the first year, after which the terms will be month-to-month.

“For somebody who is only making 30 percent of the median income level, the rent is around $396,” she said. “If they’re making 60 percent, a three-bedroom apartment will be $1,031. There are a lot of variables.”

What this means is that there is no flat rate for any of the apartments, and depending on the variables, two families could be living side-by-side in the same size apartments, yet they could be paying different rents. She said a certain number of apartments are dedicated to each income level. There are also four units that are being held aside for the county’s Behavioral Health Program.

On the same land along Buena Vista Road, CHISPA is also building 13 market-value homes, which Cleary said are not subsidizing the affordable units, as some in the community may have been thinking.

“The apartments are funded separately,” she said. “We arranged the financing for the apartments whether we were or were not going to build the homes. The apartments are possible because we have an investor, Wells Fargo Bank, which is investing a lot of equity in them through a tax-credit program. In return for investing in low-income housing, we promise to keep them affordable for 55 years.”

The project is also being funded through loans from the county and city. However, Hollister City Manager Bill Avera said the city does not loan money for housing developments. He said the city’s contribution was to defer mitigation fees for the apartments, but not the homes.  

“It’s structured so we don’t have such a high debt that we have to charge high rents,” Cleary said. “But all the financing for that building has to work on its own. We can’t sell a house to help pay down an apartment.”

She said once the approximately $10.2 million (estimated $250,000 per unit) complex is completed, CHISPA will move forward to establish partnerships with various community service groups that will conduct classes in the community building.

County Behavioral Health buys into apartments

The four units set aside for the San Benito County Behavioral Health Program were actually purchased for 27 years through a Mental Health Service Act (MHSA) grant, under Prop. 63, which was passed Nov. 2004. These monies come from 1 percent of income taxes paid by people who claim over $1 million in personal income.

“Those funds then go to counties for their mental health services,” said Alan Yamamoto, county mental health director. “There are six components to the act that each county had to implement. One of them happened to be mental health service housing, and that’s how this project came about.”

Yamamoto said the process of moving forward with the funds are so complex that counties often need to pair up with developers that specialize in building affordable housing and have experience in working with the state entities that hold the money. San Benito County partnered with CHISPA in order to accomplish the task.

“Most of the small counties only received about $1 million,” he said. “That is not enough to attract most developers. This leaves the counties pretty much on their own in how to create permanent housing. And the word ‘permanent’ is critical because the housing has to be permanent, meaning somebody could live there the rest of their lives, if they chose.”

For this reason, he said most small counties are not successful in moving forward with affordable housing projects, but San Benito County was fortunate in being able to work with CHISPA. He said the county has been communicating with CHISPA for the past three years as the Buena Vista project went through various stages and failed to materialize. In a fortunate set of circumstances, the pieces of the puzzle finally fell into place when the county and CHISPA were able to move forward with the building project.

“We were allocated $878,600, of which only $585,700 could be used for construction,” he said. “The remaining $293,000 had to be held in an account for rental subsidies and other operating expenses. That got us the four units.”

Yamamoto said when he talks to the department's mentally-ill “clients,” most are not interested in sharing housing with other people. He said the most difficult aspect in trying to place these clients is finding two or more who are compatible.

“Most of our clients want to have their own place, but someone brought up the issue of couples,” he said. “The MHSA housing regulations state that as long as one person meets the criteria and the other is a family member, they can also live in the housing. That’s why we have one two-bedroom unit, just in case we get a couple that wants to move in.”

Yamamoto explained that once the county has the money, it’s considered a long-term loan of 27 years. He said it’s an “odd arrangement” because the money essentially belongs to the county, but is loaned back to it in order to build the four units. Then, in 27 years, the county has to apply for another loan to build more housing.

“It was so hard just to get to this point, we’re just concentrating on getting these units online and getting this money spent,” he said, and then explained that the units are “dedicated” to the county, but he’s not sure what their status would be at the end of 27 years. “Housing isn’t really our forté. We deliver services to seriously mentally ill people and people with substance abuse issues.”

Maria Sanchez, administrative services manager, said none of the department’s clients have been identified, as yet, to occupy the four units.

“We have clients that we are working with that could be potential applicants,” she said. “The criteria is that they have a serious mental illness and they are active in treatment. Additionally, they have to have a disability to be eligible for Social Security, so they can contribute (about $200) to maintaining the household.”

Sanchez said case management teams work with the clients to maintain their stability so they can be as independent as possible. The team helps link the clients to resources, such as medical care, appointments, and food.

“We’re starting to look closely at the people we think have the ability to live independently,” she said.

The department offers a “full-service partnership” to the clients to provide them wraparound services 24/7, Sanchez noted. They have a phone number to call when they’re having difficulties with a family member or perhaps a landlord. She said a case manager will walk them through whatever the situation is.

“Some live with family and some we’ve been able to work with landlords and get them into apartments,” Sanchez said, “and we pay their bills with their Social Security funds. With this program, we want to make sure we have good candidates who will be successful and they’ll have that wraparound support when they need it.”

Even with the program’s complexity, Yamamoto said it is an excellent opportunity to provide permanent housing within an affordable housing complex.

“It’s a rare opportunity and even though housing isn’t our forté, I’m finding we’re moving in that direction again with something called ‘no place like home,’ which is an Assembly bill that caught the attention of the governor,” he said. “Everybody wants to do something about homelessness, but not everybody who is homeless is mentally ill. ‘No Place Like Home’ will dedicate $2 billion in bond money for the development of permanent housing for people in need of mental health services who are experiencing homelessness.”

He said the bond, to a great extent, would be paid for with mental health money.

“For our department it would be about $300,000 to support this bond,” he said. “The problem is it’s a competitive bond. Small counties like us have expressed concern that we will be out of the competition compared to Los Angeles, Santa Clara and some of the bigger counties that have a bigger, visible homeless problem.”

He said, though, that after gaining experience working with CHISPA, he thinks he won’t have a major problem locating other developers on other permanent projects.

According to a CHISPA press release, the Buena Vista Apartments will consist of three, one-bedroom, 25 two-bedroom and 12 three-bedroom apartments, and a manager’s unit, as well as several common areas for relaxing and socializing, including a 2,000-square-foot community center where community organizations will provide services for residents. Amenities will include a barbecue area, children’s play area, a community garden, and computers with Internet access, and laundry facilities.

Also, Ed Reinhart, AIA, project architect, and Central Coast Residential Builders, the general contractor, are working with CHISPA to include energy efficient and environmentally-friendly design features. Solar panels will provide efficient energy. Drought-tolerant landscaping will reduce water use and appliances will be Energy Star Certified.