GILROY
– The Santa Teresa Boulevard senior housing complex that was the
subject of much controversy before it got built is struggling
mightily to fill rental units, and the project’s developers may
lose tax breaks they were counting on for this year.
GILROY – The Santa Teresa Boulevard senior housing complex that was the subject of much controversy before it got built is struggling mightily to fill rental units, and the project’s developers may lose tax breaks they were counting on for this year.
Roughly half of the 75 one- and two-bedroom units at the Village Green Town Square apartment complex off Santa Teresa and Hecker Pass remain unoccupied nearly six months after going on the market. In a last-grasp effort to fill the apartments so its tax credits can be used now – instead of a number of years from now – Village Green is renting its units for free through the end of this year.
The president of the companies developing Village Green says the predicament will not bankrupt the firms. However, CRP Construction and DMA Gilroy Partners will be swallowing “a negative adjustment” to their profits.
“There is no profit for us right now. It’s a matter of how large the negative is going to be,” President Tom Gruenwald said.
Gruenwald said the developers, however, will continue building the multifaceted senior living complex because the overall project will be profitable. Besides the Town Square apartments, Village Green will have an Alzheimer’s care facility on site and affordable cottage-style homes that already are selling well.
“The cash flow is there to ensure that the project will continue,” Gruenwald said.
Nonetheless, property managers charged with renting the 530- to 700-square-foot one- and two-bedroom units are feeling the pressure to land residents before Dec. 31 – the date developers wanted to start cashing in their tax breaks.
“We’re under the gun to get these apartments filled by the end of the year,” said Lindsey Freedman, a manager at Village Green. “We’re looking for community help. We need businesses to put our brochures out. We need word of mouth.”
Theories on why the rental section of the Hecker Pass complex struggles to find interested residents are wide ranging. Some blame the soft economy, others say the reduced rents – $750 for a one bedroom, $999 for a two-bedroom – are still too high.
Still others believe City Council has made it difficult for Village Green to succeed.
Former Councilwoman Lupe Arellano, who was on Council when plans for Village Green first emerged, says one example of how city leaders created a bad climate is the minimum age requirement for renters. A common standard is 55 years or older, but Gilroy City Council placed a more stringent 62-years-of-age minimum on the developers.
“The city shot itself in the foot by not going along with that standard,” Arellano said. “This Council should relook at that because it’s an undue burden. What kind of message are we putting out to developers when we make it difficult to make affordable senior housing work?”
Freedman, who interviews prospective renters, says the age and income requirements do send some willing renters away.
No one under 35 can live at Village Green, so if a senior 62 years of age or older wants to move into a unit with a young relative, rules prohibit it. As for the income restrictions, seniors renting a $750 one-bedroom apartment cannot make more than $36,950 a year. Seniors renting a $999 two-bedroom unit cannot bring in more than $42,200 annually.
Dennis Lalor, executive director of South County Housing – a premier affordable housing group in Silicon Valley – says the vacancy problem at Village Green could be attributable to the demographics of prospective renters.
Lalor says most retirees on social security and modest retirement savings – the kind that look for affordable rental units – prefer rents in the $400 to $700 range. Seniors who can afford a higher rent may still be looking to downsize their living quarters, but they likely have a home to sell and instead of renting would prefer buying a new, but smaller, home.
“This illustrates how building senior and affordable housing is not that cut and dry,” Lalor said.
Lalor did not say the news would deter South County Housing, which operates the 95 percent full Wheeler Manor senior home, from trying to build affordable housing at the old cannery site downtown.
However, Lalor said studies that will be used to determine whether to buy the site are ongoing and a decision on who to market the housing to hasn’t been made.
Economic conditions are not helping seniors make the move either, says Freedman. Because home prices are not as high as they once were, some seniors are holding on to their property for now. Also, seniors who depend on family to help pay rent, may have relatives who have lost jobs in the economic downturn.
Even in normal conditions, Freedman says, “It takes some convincing for a senior to make a move. A bad economy doesn’t make that any easier.”
For Gilroy resident Bill Howden, Village Green’s unfinished state – the cottages are nearly all built and construction on the Alzheimer’s facility is beginning – impacted his decision not to move his senior mother there.
Howden, who takes regular walks nearby Village Green, is uncomfortable with the proximity of the facility to the makeshift homeless shelters inside the dry Uvas Creek. Authorities constantly struggle to keep indigents from sleeping in the bamboo- and brush-covered creek bed, yet the homeless still make the area home.
“These are people who are armed. They walk across the (Village Green) grounds and you can’t see there at night,” Howden said. “I think it’s a risk to seniors who live there.”
Village Green resident Lenore Schneider disagrees with Howden’s assessment. She says the area is safe and never feels threatened.
“I feel safe. The doors get locked at night. Eventually there will be a gate. We’re right next to a lot that will one day be a church … ” Schneider said. “I have no concerns.”
Schneider is a believer in the Village Green complex, so much so she is helping management deliver flyers around town informing people of the ongoing rent deal and on site activities – such as Bingo nights – open to the public.
“This is a good deal,” Schneider said. “The people here are great. You have a view of the foothills. There is easy access to everything.”
