REAL ESTATE : Irvine Co. Helps Build a Bridge Over Housing Costs for Low-Income Renters
Orange County’s newest apartment community, built as a private project to provide homes for low-income renters, will have its formal opening Saturday--even though tenants started moving in a month ago.
The 382-unit San Paulo Apartments in Irvine were built as a joint venture by Irvine Co. and Bridge Housing Corp., a private nonprofit builder from San Francisco that specializes in affordable housing.
Western National Property Management in Orange, part of the Western National Group--Orange County’s largest apartment owner and manager--will operate the complex under contract to the joint partners.
The unusual deal that made the complex possible has Irvine Co. leasing the $10-million parcel of land to Bridge for 34 years, with lease payments deferred until the end of that period. Rents for 203 of the units will remain at below-market rates for all 34 years, after which the complex will be refinanced and could revert to a 100% market-priced operation.
Bridge will use rental income to pay off the $28 million in revenue bonds issued by the city to help finance the project. Other funds came from a $700,000 federal loan to the city and a $1.3-million development loan from the Orange County Housing Authority.
In all, 53% of the units in the $30-million, 15-acre complex will be rented to individuals or families whose incomes are considerably below the Orange County median annual family income of $56,000. At least 153 apartments will go to very low-income renters--those with annual incomes of $28,000 or less--while 50 are earmarked for renters with incomes of $28,000 to $45,000 a year.
Monthly payments for the rent-reduced units for very low-income families will range from $565 for a one-bedroom unit to $706 for a three-bedroom place--or about 50% below current market rates.
Irvine Co. officials have pointed to the high ratio of rent-reduced apartments with pride, recalling that the city of Irvine typically requires only 25% of the units in a new development to be earmarked for affordable housing.
Bridge Housing’s president, Donald Terner, has called complexes such as San Paulo the salvation of high-priced places like Orange County and San Francisco, where Bridge has built more than 5,000 rental and for-sale units.
In remarks at groundbreaking ceremonies for San Paulo last year, Terner said that private for-profit builders in California’s urbanized areas have failed to serve the needs of “the workers, the policemen and the bus drivers” who make up a significant portion of the population.
The lack of affordable housing in urban areas has driven productive workers out to communities on the periphery, where they face “horrendous commutes” that sap their energy and eventually can turn them into unproductive drones who are not happy at work or at home, Terner said.
As a gauge of demand for affordable homes in Orange County--and as an indicator of how many families here are below the median, or halfway mark, income level--Irvine Co. officials report that they had more than 1,200 applications for the 203 rent-reduced units.
