Morphing Houses in Downtown Upland
In the Animorph series of children's novels, teenagers receive a forbidden power from space aliens: the ability to "morph" or change their natural form into those of various animals. This morphing ability enables the children to do many things otherwise impossible for human beings, such as performing reconnaissance missions in the form of hawks, or fighting underwater in the form of sharks, and literally becoming flies on the wall. (This last-named ability is a source of envy among journalists.)
If adolescents can morph, however, so can cities and city agencies, at least in the City of Upland. This city of 67,000 people in San Bernardino County has found it useful to change identities on several occasions in order to help build a senior center and 130 rental units of senior housing in the city's downtown area. First the city became - or, more accurately, created - a non-profit homebuilder to build the senior housing, while forming another non-profit private foundation to own the project. The resulting tale is instructive both in the efficiencies that government can achieve by assuming a private-sector alter ego-as well as the complex nature of projects that make such shape-shifting necessary.
Upland's goal was straightforward: the city wanted to use its redevelopment housing money to build senior housing in the city's downtown historic district. The senior housing would be paired with a city-owned senior center, which would be open to the public. The choice of location reflected the city's desire to bring some badly needed foot traffic, and captive retail dollars, to Upland's underused downtown. The plan is laudable socially as well as commercially: Bringing seniors downtown, rather than relegating them to suburban isolation, seems more desirable than the typical practice of apartheid for the elderly. In another nice gesture, the city invited future residents to review the plans and suggest changes-something that does not happen in every seniors project, which tend to be either banal or institutional, or both. The local historical society lobbied for a neo-Craftsman design, in keeping with the character of downtown Upland. (The final design features generously gabled roofs and a river-stone façade.)
The morphing process - otherwise known as home building - began when the city's redevelopment agency and housing authority put together a housing task force to determine the scope of the project. At that point, the task force metamorphosed into a non-profit builder, known as Upland Community Housing Incorporated. The non-profit board included two councilman appointees, two Housing Commission appointees, and 11 city residents.
And in order to sell federal low-income tax credits, the city created another entity, Upland Senior Housing Limited Partnership, in which the city is a general partner, while the buyer of the credits, Edison Housing Capital, is a limited partner.
Why, then, did the city choose to create a non-profit homebuilder? Martin Trabing, Upland's redevelopment director, offered a number of reasons. "A non-profit creates a vehicle that gives you the opportunity to be more competitive for state and federal funding and allows more flexibility in making decisions," he said. Unlike a project managed directly by city council, the non-profit board need not comply with Brown Act requirements to open all meetings to the public. And a private company can react quickly to crises of the moment, as developers often need to do, according to Trabing: "You need to be able to call people on the phone at night and make decisions, not only in the design phase but in the construction phase as well," he said.
Control, however, was a more profound reason for going private, the Upland official said. "This project was so important to the community that we didn't want to hand over control" to another developer, he said. The community wanted to make the decisions itself. A third-party developer hired by the city might skimp on construction out of concern for the bottom line. But the non-profit would arguably build more carefully, because it has an eye out for long-term maintenance costs.
Despite good planning in the beginning, the construction became complex, in large part due to the complex nature of the financing. Although the housing and the senior center were designed as a single concept, The housing and senior center had two separate contractors, who worked concurrently. (The projects were divided because they had different funding sources, each with its own requirements.) Five funding sources in all financed the housing and senior center: To raise equity for the senior housing, the city netted $3.285 from the sale of the tax credits. (The city had applied five times before receiving the tax credit allocations, "which is a record," said Trabing.) Permanent financing of $2.15 million came from HUD Risk Share program and the California Housing Finance Agency tax-exempt Bonds. The city's redevelopment agency contributed a deferred loan of $2.82 million, and Bank of America supplied a construction loan of $5.40 million. The redevelopment agency contributed $2.82 million. For the senior center, HUD provided a $2.2 million loan guarantee. "It got pretty complicated, but we had no choice," Trabing said.
Coy D. Estes Senior Housing opened last year fully occupied, with a five-year waiting list. The project is 85% affordable units and 15% market rate. The limited partnership manages the housing, while the city manages the Gibson Senior Center.
Perhaps there are ironies about public-sector agencies creating private non-profits to accomplish public business without the hairsplitting of public process. Then again, if cities are going to be developers, they may as well function as much like developers as possible, rather than making construction a political process. Beyond morphing, the story of Upland's senior housing development is yet another illustration of how damnably difficult it is to build low-income housing in California, despite strong public-policy support for such housing. I find it hard to comprehend why public agencies have to put themselves through major changes to build a modest number of apartment units for people of limited means. Perhaps if I morph myself into an elephant, I will gain the wisdom to understand.