Gilroy
– A developer accused of pulling a bait and switch is firing
back at city officials, saying they demand too much of affordable
housing projects that barely pencil out.
Gilroy – A developer accused of pulling a bait and switch is firing back at city officials, saying they demand too much of affordable housing projects that barely pencil out.
City councilmen anxious to boost Gilroy’s meager stock of affordable housing grudgingly approved Sal Akhter’s 53-unit project last year, despite complaints about the size and location of a playground, the amount of parking and other so-called amenities.
On Feb. 5, in a final round of regulatory review that is usually a formality, council members postponed final approval and nearly killed the project.
“There’s a concern that you’re playing both sides of the equation,” Mayor Al Pinheiro told Akhter, “where you take units from the affordable housing pool, and on the other side, you’re trying to get units from our (market rate) pool.”
The concern stemmed from Akhter’s application for a city housing competition that, if approved, would let him swap 50 market-rate units for 50 affordable homes slated for north Kern Avenue.
“(City staff members) are going to take a very strong stance against this,” City Administrator Jay Baksa told councilmen. “This is wrong as far as the process is concerned. If you don’t deny it, you have a really bad situation where someone has come in under the auspices of one (application), and then wants to change it … It would set a terrible precedent for the city.”
Pinheiro and Councilman Roland Velasco worried that if they grant final approval for the affordable housing project, Akhter could later substitute more expensive units without providing amenities normally demanded of developers who build market-rate homes. They also complained that Akhter has tied up building permits for affordable homes to hedge his bets while he awaits word on the market-rate units.
Other developers have tied up affordable units that ended up returning to the pool of available permits, Akhter pointed out. And others, as in the case of Village Green Estates, have returned to council hat in hand, asking for market-rate permits to boost profits on an affordable housing project. Akhter, however, is the first to pursue parallel tracks at the same time.
That course of action was encouraged by City Planner Melissa Durkin, according to e-mails Akhter provided to the Dispatch. Despite the mixed signals from staff and council, the developer offered to sign a legal agreement that would force him to redesign the project if the market-rate units are approved. Still, he said it was “absolutely preposterous” to delay his project based on a future housing competition.
The true problem, Akhter said, is that council members and City Hall have created an impossible climate for affordable housing.
“The city has a paragraph where they clearly mention they’ll offer assistance to affordable housing developers,” Akhter said. “The city does not do any of those things, and you’re expected to provide the same exact amenities as if you were doing a market-rate project … When they renege on those things, it isn’t economically feasible.”
The solution, council agreed in a 7-0 vote, was to postpone final approval of Akhter’s project until next month, to explore the legal questions raised by Akhter’s project. The move fell short of suggestions by the city attorney to either deny the project or delay it indefinitely, until some date after the housing permit competition. Applications vastly outstrip the 190 permits available, and city council will decide later this year which projects are most deserving.
And not all council members are opposed to Akhter pursuing both tracks.
“I wanted the play area to be larger and more internal to the project, but (Akhter) said for him to do it, he needs to make it market rate to have it pencil out,” Councilman Russ Valiquette said. “I don’t think Sal having a plan B to go to market rate is trying to make an end-run around the city. If he was trying to do the end-run, he wouldn’t have brought it up to us.”
