Hollister planning commissioners denied a developer’s request to reduce the amount of affordable housing units required at a new development southeast of San Benito High School off Cienega Road and San Benito Street.
The commission denied a request by BMC Promise Way LLC, proposing a reduction of 100 affordable multi-family housing allocations to 43 small lots designated for single families.
“I understand that you’re a business,” said Commissioner Gregory Harvey during the Feb. 26 meeting to Michael Cady, who represented BMC, a subsidiary of UCP Inc. and developer of the site, dubbed Homestead by Benchmark Communities. “I understand that there are costs; and you’ve got to be able to make a profit: If you don’t make a profit, you can’t stay in business. With that said, there’s got to be a way to make housing affordable.”
Before a contract between the Rajkovich family, which still has interest in the property, and BMC, the project in 2009 received approval for 175 units, including 100 affordable allocations under rent-restricted rates, according to City Manager William Avera. That plan apparently fell through. BMC contracted with the Rajkovich family in October 2014 to develop only the 75 single-family lots that later turned into 81.
Cady acknowledged that profit drives property development, which spurred the request to modify the affordable housing requirement.
“It costs money to buy the land and build a structure, and then you need a profit in there,” Cady told the commission. “I think that that is a difficulty. If multi-family affordable housing were financially feasible, I think that you would see developers doing it. The trade is profit-driven. The problem is complex.”
The San Benito County Regional Housing Needs Allocation Plan states that from 2014 through 2023, the City of Hollister needs 1,316 housing allocations. Among them, 501 are reserved for low income and very low income residents. Such households individually earn a maximum of 80 percent of the median family income, according to limits set by the California Department of Housing and Community Development. From 2000 through 2009, during what a previous RHNA called a period of “virtually no growth,” the city approved 18.6 percent of its goal for the development of 300 affordable housing units, none of which actually finished construction.
Commissioner Carol Lenoir on Thursday called for more leadership in the private sector.
“I think that one way to get the costs of rentals down in this community is to offer more rentals,” Lenoir said during the meeting. “I wish that some developer would embrace this issue. Someone has to start leading on that issue. It can’t always be about the bottom line.”
“They’re in the business of making money and I understand that,” added Lenoir. “I don’t want to be one to recommend that we give away 100 affordable units for this town.”
Avera also weighed both the potential risks and the benefits of the proposal in the meeting, and provided additional perspective on local housing, including the financial risks of affordable units.
“There’s always going to be a need for a comprehensive housing program in the City of Hollister,” said Avera. “We’re at about $450,000 for a new home now. The last multi-family project we did required $3.5 million in redevelopment agency assistance. I don’t believe that we are going to see anything like that again.”
Cady and his firm have had a longstanding relationship with the city, and supported the community, according to Avera.
“It’s not necessarily that Michael Cady and his firm want change,” said Avera. “When Mr. Rajkovich, for lack of a better term, sold the property to Benchmark. they really sold only the 75 single-family units that later turned into 81. That’s what Benchmark really has ownership of.”
Commissioner David Huboi, who chairs the Hollister Planning Commission, said he wanted to see more consideration of affordable housing by the firm, whose parent trades under the ticker symbol UCP on the New York Stock Exchange.
“The purpose of this planning commission is to help come up with the best project for the community,” said Huboi. “Though the applicant here is proposing permissible land use, it would not be the best use for the community.”