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Affordable Housing Complex Stays That Way

SAN JOSE-The affordable housing crunch continues throughout the United States, as many affordable housing developers switch to market rates when their contracts expire. One San Jose development was acquired and renovated in an attempt to remain affordable.

By Michelle Savage | Updated on June 26, 2002

SAN JOSE-For three decades, apartment owners have been guaranteed modest profits for providing affordable housing to low-income residents throughout California. However, when these contracts run out, many are tempted to convert their projects to market rates, particularly in high-cost areas like San Jose.

Fortunately, this was not the case with El Rancho Verde in San Jose, a 700-unit housing project that houses nearly 3,000 low-income residents. The project was financed in 1969 under special HUD affordable-housing programs with a 20-year commitment,which later was extended an additional 10 years.

By 2000, however, the owners–influenced by the need for renovations and the rising market values–decided to convert to market-rate housing. The Related Companies, a developer of government-assisted and market-rate multifamily housing, purchased the property through private and public financing of nearly $6 million and made a commitment to keep the property affordable.

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