Editor’s note: This article was updated to include PG&E’s response. Last updated Nov. 29 at 4:45 p.m.
The San Benito County Board of Supervisors voted 4-1 on Nov. 22 to approve a deed restriction and affordable housing implementation plan for Phase 2 of the Santana Ranch Apartments, which would include 55 more apartments to the 110-unit complex. Supervisor Kollin Kosmicki voted against the measure.
According to Abraham Prado, assistant director of planning and building in the Resource Management Agency, the development agreement (DA) signed by the county and the developer, Anderson Homes, in November 2010 allows for 1,092 residential units to be built within the Santana Ranch development. It includes 110 affordable multifamily rental units. A minimum of six of those units would be for low-income occupants.
The first phase of 55 units was approved in May 2022. It was ready for tenants in late September but has been delayed for occupancy by PG&E until Jan. 23, 2023. Only after “energizing” is completed can the county conduct the final inspection and issue certificates of occupancy.
Michael Anderson of Anderson Homes told the board that even though PG&E considers the apartments a high priority, he has not been successful in discovering the reason for the delays. He said he would appreciate it if any board member would speak to PG&E to possibly expedite the approval process.
Supervisor Betsy Dirks said she contacted PG&E and used the argument that “this was about housing” in trying to convince the utility company. She was also told the apartments are “the No. 1 project in San Benito County,” but did not indicate she was any more successful than Anderson in moving it forward.
PG&E spokesperson Mayra Tostado told BenitoLink requests for new gas and electric service connections are outpacing their forecasted demand. She added PG&E’s adjustments to construction timelines for new gas and electric service connections through the end of 2022 will cause delays of some new business connections.
“The timeline for connecting new business is expected to move from about 60 days (currently) to about 100-140 days,” Tostado said.
She said projects are entered into a construction queue on a first-ready, first-served basis. Tostado added available resources to meet the growing demand are both reduced and more costly.
“We understand that any delay is frustrating, and we remain committed to taking the necessary steps to complete our customers’ projects and continue to keep them informed of any changes or delays,” Tostado said.
Along with Dirks, Supervisors Bea Gonzales, Bob Tiffany and Peter Hernandez favored moving ahead with Phase 2, even though it did not meet current requirements for low-income units. With 49 units designated as moderate income as defined in the DA—rents will not exceed 35% of income for tenants at 120% of area median income, which is $81,599, according to the U.S, Census Bureau.
The DA states that the deed restriction and affordable housing implementation Plan for the final 55 units (Phase 2) has been submitted by the developer for county approval, of which 49 units are designated as moderate income as defined in the DA—with rents not to exceed 1/12 of 35% of income for tenants at 120% of area median income, and no reduction for utility expenses, which currently would be capped at $3,310 for a one-bedroom and $3,678 for a two-bedroom apartment, based on HCD-published data from May 2021.
Anderson said the six low-income units built in Phase 2 would be made available through a lottery. He said the previously proposed initial rents of $1,895 for a one-bedroom, one-bath, 668-square-foot unit and $2,475 for a two-bedroom, two-bath, 989-square-foot unit and $2,495 for a two-bedroom, two-bath, 1,016-square-foot unit would apply to Phase 1 properties, but a rent schedule for Phase 2 has not yet been determined.
Kosmicki questioned the effectiveness of the discussions between the county and the developer in guaranteeing more low-income units. Anderson told him he would be open to more discussions if they included concessions to build more market rate homes or commercial developments.
Kosmicki said if the board approved the resolution Anderson would have no incentive to build more low-income units. He said more apartments are needed, whether affordable or market rate, but questioned the need to rush forward and wondered if the discussions could continue “so the developer might give a little.” Anderson said if the resolution were delayed the apartments would be difficult to finance, which could delay the project. “We just want to keep moving forward,” said Anderson.
Prado reminded the supervisors that the number of apartments was directly related to how many market rate homes could be built. He said under the DA the developer could not build more than 900 homes unless Phase 2, with 55 units, was already completed.
Kosmicki said he understood the developer’s incentive for wanting to continue but wanted to know the county’s incentive for moving forward without more low-income units included in the project. He was told if there were changes to the DA it would incur new environmental studies and Anderson was not open to delays. Tiffany agreed with Anderson, essentially, that off-sets such as more market-rate housing, would be needed to incentivize the developer to delay Phase 2.
“I think we’ve done the best we can, given the circumstances of the development agreement,” Tiffany said.
Kosmicki said he would prefer a retail project rather than more market rate housing. He posed the question to Anderson, “What would stop the developer from significantly increasing these rents to the highest possible rent they could charge under the development agreement?” He said, by his definition, the proposed rents “are certainly not affordable,” adding, “as good as it is to have apartments, it’s still not affordable for the vast majority of residents in this community.”
He said the board represents the county and “we’re essentially giving in.”
“Regardless of what Supervisor Kosmicki thinks is affordable or not, I have been looking at the market for affordable housing for over a year for myself,” Gonzales said. “Since COVID, rents have gone ridiculously high. I hate using COVID as an excuse, but it has changed the reality. It’s not fair that we as a board hold these new standards to a development agreement that was written 12 years ago. I’m happy we’ll have these standards for future developments.”
There were a number of delays for Phase 1, particularly because electrical units that were needed for the apartments and the adjacent Santana Ranch Park took several months to be shipped from Texas. To avoid similar delays for Phase 2, Anderson said the units were ordered before construction began.
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