Townhouse Project Getting Back on Track

Healdsburg City Council takes first step to restart stalled Grant Street Village condo project.

Healdsburg City Council members on Monday gave their blessing to an alternative plan to make the development more attractive to developers in today's real estate market.

"We're trying to find a way to move this forward," said City Manager Marjie Pettus of the vacant and incomplete condos on Grant Street just west of the

"When we first approved the development plan for this project, we had no idea the bottom would fall out of the housing market," Councilman Jim Wood said.

"Now we have to react to the current conditions -- this is a way to react," Wood added. "It's important to get this project finished and occupied."

Work on the project stopped in March 2010 after the bank foreclosed on the properties and the former developer declared bankruptcy. So far, 12 of the originally planned 39 units have been built but only two are finished -- the other 10 need interior work,

Under the new plan, the sale price for two moderate-income "affordable" units in Phase I of the development would be lowered by about $140,000 each in order to make them accessible to low-income families.

Healdsburg's Housing Trust Fund will make up the $280,000 difference -- or $140,000 times two -- between the current maximum "affordable" sale price of about $392,400 and the new proposed maximum of $252,300.

Because of the struggling real estate market and lower housing prices, the old "moderate-income affordable" price was not seen as attractive to potential buyers since it is too close to the cost of a market-rate home that would not carry any deed restrictions, said Steve Reilly, a marketing consultant with Land Advisors Organization, a Bay Area company chosen by the project's bankruptcy receiver to work with Healdsburg on attracting a new developer.

"The affordable units have deed restrictions that limit their appreciation," Reilly said. "The bigger the delta is between the affordable units and the market-rate units, the more they are opened up to a wider audience."

As per deed restrictions for the Grant Street Village affordable units, buyers would own their homes but not the land, and they would not be able to sell their homes for a profit.

Land will be owned in perpetuity by the Housing Land Trust of Sonoma County, which will also be in charge of administering the eligibility list and other details of the affordable units.

"In this market, we need to figure out a way to have workforce housing that is thoughtful and current," said Dev Goetschius, the Housing Land Trust's executive director.

"It's really about being present in the moment and making sound economic decisions that ensure that the city is acting in the best interests of the community and also meeting its housing needs," Goetschius said.

Reilly said Monday's approval by Healdsburg City Council of the alternative plan for affordable units clears the way for him to start marketing the project to potential developers.

"I'm going to start a full court press with a goal is to get it in the hands of a developer by the first quarter of 2012," he said. "If that happens, it's possible it could be completed by spring of 2012."

austin October 04, 2011 at 09:57 PM
Owners can't sell them for a profit? Are they trying to keep poor people poor? Sounds like a terrible deal for the buyers and a great deal for the bank that gets to unload them.
Keri Brenner (Editor) October 04, 2011 at 10:03 PM
@austin: Hi thanks for your comments. The low-income families get to own their own home in a community where they could not afford to buy otherwise. They can sell the home for their same price they bought it for, so it's more like a savings account that they can live in at the same time. Perhaps someone else could explain this "affordable housing" deed restrictions idea better than I?
Igor October 04, 2011 at 11:36 PM
Ummm....who wants to live in a area that historically flooded, AND, next door to the railroad tracks with a crossing. I betcha the week after the first 3 am train whistle the summons will be flying.
Keri Brenner (Editor) October 05, 2011 at 12:38 AM
@Igor: Only a few blocks from the Plaza and close to shopping and the Fire Station...look at the bright side!
austin October 05, 2011 at 02:58 AM
@Keri: Hi, I enjoy your reporting, thanks. A savings account would at least be risk free and involves some rate of return. This assumption of risk only carries potential downside. Renting a townhouse and starting a savings account has no associated housing market risk. I feel bad for the people that'll be suckered into this. Almost seems illegal.
Keri Brenner (Editor) October 05, 2011 at 04:41 AM
@Austin and Igor: First let's see if any developer wants to take this on, and then see if people want to buy them. I think there will be a long line for the two low-income units...but time will tell...
Igor October 05, 2011 at 10:41 PM
Keri --- forgot about the fire station. YES....the firehouse doors open at 2 am several trucks pull out .... sirens go off. Just what I want to live next door to. Train Whistles, Sirens, and a Creek well known for overflowing.
Keri Brenner (Editor) October 05, 2011 at 10:47 PM
Igor: I guess you're right....that could get annoying.
Broke N. Hburg June 16, 2012 at 07:51 AM
What this town needs is rent control not "low income housing" which offers no reward if the owners were to sell. So 30 years down the road you can only sell your house for $250K? Will inflation or cost of living be factored into the sale-able amount years down the road? Crunch some numbers it looks like in a good scenario one would be paying $1700 a month not including, insurance, property tax, home-owners, ect. Not necessarily low income. Not to mention the interested accrued on the property. Will interest be factored into the selling price? If not it is a guarantee loss. What I foresee happening is people buying into the houses and once they improve their socio-economic status (is this not The American Dream) they will quietly sub-lease )who knows what rent will look like 20 years from now). Otherwise The buyer would be stuck with a grossly undervalued albatross around their neck they have no choice to sub-lease. This is just not realistic. People wake-up look at St. Helena, it's the millionaires club. Or how about the city buying, finishing the project, and rent them out rent controlled. If the city can administrate power, water, sewer, ect why not a rent controlled neighborhood? And Keri If you would be so kind as to adress my questions feel free to be frank but there is no need to sugar-coat your response. I am considering this as an option for low cost housing and would like advise not patronisation.
Keri Brenner (Editor) June 17, 2012 at 07:06 PM
@Broke N Hburg: I understand your frustration and can definitely relate. My advice to you is to contact Dev Goetschius of the Housing Land Trust of Sonoma County (link is in story above) and discuss your situation. She may be able to help or at least explain things. I personally am just the messenger.I don't have any authority on how to obtain low-cost rentals or affordable housing in Healdsburg. Maybe there are Patch readers out there who could offer some aid to Broke N Healdsburg? If so, please post your contact info. in the comments here. Hope this helps.


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