Menlo Park will give HIP Housing, a nonprofit specializing in finding affordable housing for county residents, a 55-year, interest-free loan of $1.85 million to buy the 12-unit complex, located at 1157-1161 Willow Road. An appraisal conducted in March valued the complex at $2 million, although the nonprofit will need to complete renovations.
Nine units at the complex will be reserved for people earning less than 50 percent of the regional median income of $81,300, and three units for those making less than 30 percent. Rent at the complex would fall in the range of $610 to $1,016, according to the staff report.
Kate Harr, the executive director of HIP Housing, told the council that the location was particularly desirable because of its proximity to the Veterans Affairs hospital in Menlo Park. "I think the thing always to remember is that affordable housing isn't scary. It creates balance in a community," she said.
Affordable housing remains a hot topic in Menlo Park. Expressing outrage, the council also voted 5-0 to settle a lawsuit brought against the city for not complying with state housing laws, which include meeting a target number of affordable housing units.
The city now has until March to identify sites for adding 1,975 housing units, both market-rate and affordable housing, to its current stock of 12,500. One of the first steps will be an inventory of local housing, existing capacity for additional homes within current zoning, and any new housing built since 1998, which could be deducted from the preliminary number.
The settlement states that Menlo Park will also identify potential sites for affordable housing, create zoning that provides incentives for developers to build affordable housing at those locations, and set aside a portion of local below-market-rate funds for nonprofit development of affordable housing on those sites.
Menlo Park will pay $114,000 in attorney fees for the three housing advocacy groups that filed the lawsuit: Peninsula Interfaith Action, Urban Habitat, and Youth United for Community Action.
City Attorney Bill McClure said that fighting the suit in court could easily run the price up to $2 million, with little prospect for a victory based on cases filed in other jurisdictions. The court could also halt all nonresidential building permits, a move that would have left the Facebook campus expansion and the Bohannon Gateway project in limbo.
Staff presented four strategies for squeezing more housing into Menlo Park: increase the density in existing apartment complexes; rezone properties from nonresidential to multi-family residential; create an affordable housing overlay district; and allow in-law units.
Complying with state law will cost the city about $1.15 million, staff said, on top of the attorney fees.
Councilman Rich Cline called the juxtaposition of the lawsuit with the Willow Road project ironic. The need for affordable housing was motivating the city to approve the deal with HIP Housing, he said, not the "gun to the head" of a lawsuit.
"I never had a phone call (while serving) as mayor from any of these organizations — none," he commented. "The first I heard of them was when someone told me they were going to sue. ... I don't think that's the best way to partner on this stuff."
Council members Andy Cohen and Peter Ohtaki were selected to sit on the steering committee responsible for overseeing the process of getting Menlo Park's housing policies in line with the state mandate. The city will hold community workshops this summer to solicit public input.