Marin County gives Canal Alliance $450K for housing deal
December 16, 2024
By Richard Halstead | rhalstead@marinij.com | Marin Independent Journal
Marin County supervisors have allocated $450,000 for Canal Alliance to support its acquisition of nine apartments in San Rafael.
“It’s a significant milestone in our ongoing efforts to preserve affordable housing,” Yolanda Oviedo, a housing manager at the nonprofit organization, told supervisors. “Your support is crucial in helping us advance our mission.”
The contribution, which the supervisors approved Tuesday, comes from the county’s affordable housing trust fund.
Canal Alliance bought the apartments at 1400 Lincoln Ave. in August. Needing an additional $700,000 to cover the $3.1 million price, it used $250,000 of its reserves and a $450,000 advance from the Marin Community Foundation. Later, San Rafael granted a request to cover the $250,000, and the county’s action covers the $450,000 advance.
“The journey to secure this property has been challenging due to our limited capital and the added difficulty of competing with for-profit investors who have more financial leverage than we have,” Oviedo said.
Canal Alliance also owns 12 apartments it purchased in the early 2000s in the Canal neighborhood of San Rafael. The nonprofit has set a goal of owning 100 rental properties in the next five to 10 years.
“We did a feasibility study,” Oviedo said. “In order for us to make an impact, we would need to own 100 or more units. We remain committed to expanding affordable housing options, fighting displacement and protecting the strong diverse workforce that is the backbone of our county.”
In recent years, Oviedo said, Canal Alliance has struggled to purchase attractive properties when they became available for sale because it couldn’t line up funding fast enough to compete with for-profit buyers.
She said it took Canal Alliance nearly a year to secure the fundings for the Lincoln Avenue purchase. In addition to the funding from the county and San Rafael, it obtained $250,000 from the La Raza Development Fund, $100,000 from Tam Pacific and $100,000 from the Marin Community Foundation.
Canal Alliance also contributed $450,000 from its reserves and secured a $1.5 million loan from a real estate lender.
Leelee Thomas, deputy director of the Marin County Community Development Agency, told supervisors the apartments at 1400 Lincoln Ave. are “what we call naturally occurring affordable housing.”
“The rents are fairly low,” she said. “They’re below market currently.”
Thomas said that under an agreement with the county, the apartments will be deed-restricted for rental only to tenants earning 60% or less of the area median income for Marin County.
That means the apartments would be priced to be affordable for a four-person household with a maximum yearly income of $117,480, or a two-person household with an annual maximum income of $94,020. The current tenants are paying more than 60% of AMI.
Supervisor Katie Rice asked Thomas how much a for-profit investor could have increased rents at the property. Thomas said that under state law rents can be raised no more than 10% per year, even if properties change hands.
Thomas said, however, that the tenants there are already severely rent burdened, so they would likely have been displaced by a 10% increase.
The county requires that Canal Alliance employ an “affirmatively furthering fair housing” marketing plan when filling residences that become available in the future.
Under the plan, Canal Alliance must determine the racial makeup of the renters at 1400 Lincoln Ave. and compare it to the county demographics. If any racial group is underrepresented at the complex compared to the county, the nonprofit must make efforts to correct the imbalance.
Responding to a question from Supervisor Mary Sackett, Thomas said the nine apartments cannot be credited toward the number of affordable dwellings that either the county or San Rafael are required by the state to create by the end of 2031.
Supervisor Dennis Rodoni thanked Canal Alliance for advancing the project, noting that new construction is far more expensive.
“It’s really important that we take advantage of any preservation options that we have,” Rodoni said.
