As part of its program to expand below-market-rate housing in Menlo Park, the City Council agreed last night (Sept. 14) to purchase a home at 1441 Almanor Ave. in the Belle Haven neighborhood for $349,000 plus closing costs.
The purchase is funded by the $2 million fund established by the council in 2009 as part of a neighborhood stabilization program to buy and rehabilitate foreclosed, blighted properties for resale to residents qualifying for below market rates (BMR).
The vote passed 4-1, with Councilman John Boyle dissenting. Describing the house as a "fixer-upper" rather than a blighted property, he said he wasn't convinced it was a good fit for the program.
"This is not a dump," he said. "This was not foreclosure prevention. It's really crossing the line and bringing us into the wrong mindset."
According to the staff report, the property is not in foreclosure, but the owners owe more on the mortgage than the house is worth. The five-bedroom, two-bath house has been on the market for nearly two years. Staff estimated the cost of rehabilitating the home with new wiring, heating, kitchen appliances, and other improvements at $140,000.
BMR housing scarce
The rest of the council backed the purchase. Mayor Rich Cline pointed out the growing need for large homes, and the difficulty of finding a five-bedroom house at below-market rates.
Councilman Heyward Robinson thought the house met the criteria for the program by virtue of having been on the market so long. "We've really struggled to find homes to buy. Habitat (for Humanity) is also struggling," he said.
Once the house is refurbished, city staff said it will be resold for approximately $409,000 to a buyer selected from the waiting list for BMR housing. The proceeds feed back into the neighborhood stabilization program.
Housing Manager Douglas Frederick said the city has purchased one other home through the program.
Menlo Park currently has 57 BMR units, he said.
The issue of where to find new units in a largely developed city remains challenging.
Menlo Park requires developers proposing projects larger than 10,000 square feet to set aside BMR housing, or pay in-lieu fees.
However, the city's policy states, "It should be noted that the City's primary objective is to obtain actual BMR housing units, either for rent or for sale, rather than equivalent cash from in-lieu fees."
This objective sparked debate when the Menlo Park Housing Commission unanimously agreed on Sept. 1 to the Beltramo's Investment Co. request to pay the fees instead of including three BMR units as originally proposed in the 16 townhomes planned for 1460 El Camino Real.
The current proposal sets aside one BMR unit. The commissioners, who asked for a higher percentage of sales revenue in return as well as the fees, are hoping the city will spend the money to buy affordable housing somewhere else in Menlo Park.
If the Beltramos accept those terms, the Planning Commission and City Council will need to approve the agreement.