Council approves Rancho del Sol, affordable housing in northern
Gilroy
Gilroy – The first major affordable housing project to win city approval in more than five years will serve a smaller spectrum of low-income people than originally hoped. But the debate surrounding the project has inspired a new vision for creating homes for the city’s poorest residents.
On Monday, city council members narrowly approved (4-2) the 260-unit Rancho del Sol project. The project, which started out as a 303-unit mix of for-sale housing and rental units, is slated for construction in northern Gilroy just west of Monterey Road.
In recent months, representatives of nonprofit developer South County Housing scaled back the project and tweaked proposals for regulatory changes in hopes of winning over skeptical councilmen. The changes included eliminating 79 units of rental housing that would have served the poorest area residents, and broadening proposed zoning language that would allow nonprofit developers to exceed Gilroy’s 225-unit cap on large affordable housing projects.
They also spent several months lobbying council members who had doubts about the project.
“Affordable by its nature is not a bad word,” South County Executive Director Dennis Lalor said. “People were concerned about too much of one income level being focused in one area, so we went and got the census data. It showed that the people we’re targeting actually have higher incomes than the people already in the area. What it boils down to here is that these are the people who live and work in Gilroy who can’t afford a house in the current market.”
Those arguments, as well as a tour of new South County projects in Morgan Hill, were enough to win a crucial swing vote on council.
“Originally, I didn’t like the project, but I think it’s evolved into something I can really support,” Councilman Dion Bracco said. “The houses are mixed up to a pretty high degree, where you don’t have pockets of certain incomes … This isn’t Section 8 housing. Most of the (people it serves) are husbands and wives who both have good jobs, and that’s what it takes to afford these houses.”
In fact, nearly half of the homes would only be affordable to families earning more than $92,000 a year.
Such statistics failed to win over Councilman Craig Gartman, who continued to insist that Rancho del Sol runs foul of policies that encourage neighborhoods with mixed housing types and income levels. He claims the project will glut the city’s north-central area with low-income housing.
Prior to voting against zoning language needed to clear the way for the project, Gartman also invoked the specter of renewed litigation against the city. He claimed that attorneys suing the city for failing to provide enough low-income housing “would line up” to get into the courthouse when they learned officials blended market-rate units into an affordable project.
In November 2004, the city emerged victorious from a lawsuit accusing officials of failing to craft long-term growth plans that include affordable housing options for the poorest residents. The attorney in charge of the case, Richard Marcantonio, has filed an appeal. He had no problems with the decision to grant market-rate units as part of the Rancho del Sol project.
“They’re getting some affordable units and that’s great,” Marcantonio said. “What I’m concerned about is that they had a somewhat larger project that would have also given them 79 rental units for very-low income folks, and cutting those units out of the project was really a step in the wrong direction. Did they approve a bad project? Not based on what I’ve (reviewed). Could they have approved a better project? Absolutely.”
In addition to Bracco, councilmen Peter Arellano, Paul Correa and Russ Valiquette voted in favor of the project. Councilman Roland Velasco joined Gartman in voting against it, and Mayor Al Pinheiro, who sells insurance to South County Housing, recused himself from the vote due to a financial conflict of interest.
The last large-scale affordable housing project built in Gilroy was Los Arroyos, a 373-unit project approved by council in 1999.
Making Affordable More Affordable
The battle surrounding Rancho del Sol has jolted city leaders into rethinking their approach to affordable housing. Officials appear to have heard the pleas of South County and other affordable-housing developers, who argue that such projects must include market-rate units to help subsidize housing for the lowest income levels. Gone are the days, developers say, when state and federal government helped provide those subsidies.
City leaders say they will graft that new thinking onto Gilroy’s building-permit competition, governed by the Residential Development Ordinance. Currently, the RDO process includes special categories that allow developers of affordable housing to skip the permit competition. Those who want to build market-rate housing must obtain the permits by submitting a proposal that gets scored on a 200-point scale.
In the future, officials plan to create a new RDO category that rewards large-scale affordable housing projects with a certain number of market-rate permits – without having to obtain the latter through the RDO competition.
“We’re going to have to think outside the box if we’re going to provide housing that people can afford,” said Bracco.
