Decades ago, said Michael Lane of the affordable housing advocacy group SV@Home, cities weren’t thinking too far ahead. “Unfortunately, when programs first began, there were relatively short terms for deed restrictions and people didn’t really think about what happens on the back end,” Lane said. “It’s a real problem.”
By EMILY DERUY | ederuy@bayareanewsgroup.com | Bay Area News Group
PUBLISHED: March 16, 2020 at 6:30 a.m. | UPDATED: March 16, 2020 at 3:15 p.m.
Struggling to find an affordable, safe place to live with her two young sons after a divorce, Angela De Leon was thrilled to finally land an apartment in Foster City in 2016.
De Leon, who works a full-time job and a side gig on Saturdays, pays about $2,100 for a rent-controlled two-bedroom home at Foster’s Landing. The complex includes plenty of green space where her kids — Ruben, 5, and Felix, 12 — can play and the local public schools are good.
“Everything here is great,” the 39-year-old said. “I wasn’t planning on moving anytime soon.”
But now, she might not have a choice.
Since the mid-1980s, Foster’s Landing has included 74 rent-restricted apartments, including De Leon’s, amid hundreds of market-rate units at the complex. But those restrictions are set to begin expiring at the end of 2020 and the current owner, San Mateo-based Essex Property Trust, can legally raise prices to the market rate.
Dozens of families could soon be forced out of their homes and into an unforgiving real estate market where they have little chance of competing. Market rate for her unit, De Leon estimates, would be around $3,400.
“I can’t afford that,” she said. “You leave me scrambling as a single mom to try to figure this out.”
As families juggle budgets to live here, the Bay Area housing crisis is slamming low- and even moderate-income residents, who can find few places of refuge. Average rent in Foster City is above $3,000 and rents in surrounding cities are similarly high.
Many of the Foster’s Landing residents in rent-restricted units are seniors on modest fixed incomes, including some squeaking by on less than $1,000 a month. They pay 30 percent of their income to live in the quiet, leafy complex. Paying market rate would mean their rent would jump by thousands of dollars.
“There’s nowhere to go,” said Barbara Grossetti, a tenant who stands to be pushed out.
In a January letter to one resident, the Housing Authority of the County of San Mateo said all of its housing vouchers — which low-income residents can use to help cover rent — were in use. And a partial list of rooms for lease around the Peninsula compiled in February by the nonprofit HIP Housing included mostly options at or above $1,000.
Essex sent letters notifying some residents of the impending change at the end of 2019 and tenants fretted relatively quietly for some time. But in recent days, the conversation has spilled into the City Council chamber and onto Nextdoor.
A former mayor, real estate lawyer Charlie Bronitsky, called for a special committee to study the issue and asked to be on it. City leaders vowed to look for a solution. The Legal Aid Society of San Mateo County is reviewing legal options for the tenants.
For now, though, there is no clear path to preserving the affordability of the 74 units and residents are “becoming very nervous,” Bronitsky said.
Decades ago, said Michael Lane of the affordable housing advocacy group SV@Home, cities weren’t thinking too far ahead.
“Unfortunately, when programs first began, there were relatively short terms for deed restrictions and people didn’t really think about what happens on the back end,” Lane said. “It’s a real problem.”
Now, cities are working out much longer affordability requirements, stretching 99 years or even into perpetuity.
“But,” Lane said, “that doesn’t do anything for current tenants.”
Nina Hanna, a longtime resident of the complex in her mid-70s, has tried to organize meetings and conversations among impacted residents. But she doesn’t have a full list of those affected and, she said, Essex removed notes she posted in the complex in an attempt to reach her neighbors.
“If you help people, God will help you,” Hanna said. “This is my philosophy.”
The company dispatched employees to listen to residents’ concerns at a small gathering recently, Hanna said, but offered no relief.
“When we acquired this property in 2014, we assumed an existing agreement with the city to hold units at below market rents with varying annual expiration periods through 2023,” Essex’s senior vice president of finance, Barb Pak, said in an email. “Accordingly, we have been providing units at below market rents consistent with this agreement. To provide ample time to prepare for the transition, we started sending advance notifications over a year ago, which is consistent with the statutes, along with additional subsequent notifications more recently.”
The struggle to provide affordable housing to low-income residents is widespread across the Bay Area, but it’s the first time in recent memory that Foster City has had to grapple with expiring rent restrictions, city leaders say. It’s difficult to tell exactly how many apartment units in the region are rent restricted. The nonprofit California Housing Partnership tracks the conversion of apartments subsidized through certain state and federal funds to market rates. But some rent restricted complexes, like Foster’s Landing, fall outside those bounds and while individual cities keep records, there isn’t a readily available compilation.
And some of the solutions that have worked in other cities grappling with displacement aren’t seen as good a fit in Foster City.
From Sonoma to Santa Cruz, nonprofit developers like MidPen Housing have built or rehabbed affordable housing. But the developments are usually 100 percent rent-restricted, not mixed-income buildings. The same is true for community land trusts, which have helped dozens of people from San Francisco to East Palo Alto remain in their homes.
“No matter what we do, this is going to be a huge impact on these residents,” said Councilman Sam Hindi.
The city, he said, could explore the possibility of purchasing units at the complex or buying more time for low-income residents to remain at Foster’s Landing. The issue is set to come up for discussion at the next council meeting in mid-March.
“We’re not going to leave any stone unturned in this situation,” Hindi said. “We’re going to try anything that’s out there.”
The California Housing Partnership has proposed creating new statewide tax credits to encourage companies like Essex to preserve affordable housing, but they still wouldn’t be forced to take action.
“It certainly might entice them,” said Matt Schwartz, the nonprofit’s CEO. Still, “these are heartbreaking situations. We don’t yet have the tools at a state level to help local communities force preservation on owners whose sole mission is to make more money.”
But Grossetti, Hanna and some of their fellow tenants say they are frustrated they weren’t warned when they moved in — in many cases many years ago — that the rent restrictions were set to expire in 2020. County records show that the affordable housing agreement was amended in 2007 to extend rent restrictions for a few apartments until 2023, but most of the units are only restricted until the end of 2020.
Hanna grew up in what is now Ukraine and continues to be shocked, she said, at how one of the richest countries in the world handles poverty and housing.
“In my country, there is war,” she said. “But no one sleeps on the streets.”
For now, De Leon is trying to stay calm and hoping a solution emerges before her lease is up. Leaving Foster City for someplace more affordable in San Joaquin County would mean moving away from her job and taking her boys away from family on the Peninsula.
“It puts pressure on me as a mom,” she said. “I don’t want to move to Tracy.”