80.9 F
San Fernando
Friday, May 24, 2024

Affordable Units Don’t Add Up in Thousand Oaks

After two decades of planning and failed agreements with separate developers, Thousand Oaks is giving up on plans to build affordable housing near Amgen Inc.’s headquarters. The city, which acquired the vacant land at Conejo Center Drive and Conejo Spectrum Street in the early 1990s, has most recently abandoned an effort with Meta Housing Corp. in Los Angeles to develop 140 units. Now, the city plans to simply sell the 8-acre lot and allow it to be developed for industrial use, despite high demand for the less expensive housing in the affluent community. The decision comes as a lack of government support for low-income housing, most notably from the loss of state redevelopment dollars, has made it difficult for developers to profit from the projects. “If developers can’t get the additional incentive, the numbers just don’t pencil out and developers won’t do it,” said Adam Christofferson, first vice president and regional manager at commercial brokerage Marcus & Millichap Inc. “And right now, there isn’t that help available.” Meta Housing and Thousand Oaks mutually agreed to part ways on the project in September, after the two sides couldn’t agree on plans for the vacant lot. What’s more, the city isn’t going to receive a majority of the land sale proceeds. Assistant City Attorney Chris Norman said Meta Housing, as part of the termination agreement, will receive 75 percent of the money from the pending sale, which is in escrow. “Meta Housing incurred hundreds of thousands of dollars in costs to develop a plan,” he said. The city sought $2 million to $3 million for the lot from an industrial buyer, but Norman declined to state the exact sale price or buyer identity. Meta Housing did not return calls or emails seeking comment. Tangled history Thousand Oaks put a lot of time and effort into developing the property, which is in the Newbury Park neighborhood. It was donated the land in 1989 as part a development agreement with Shapell Industries Inc., a Beverly Hills developer that built multiple projects in the city. Shapell was bought out last month by Toll Bros. of Horsham, Pa. Then, the lot sat idle for decades until the city finally entered into an agreement in 2003 with Operating Engineers Funds Inc., a Pasadena non-profit pension fund manager to develop affordable housing at the site. The city agreed to contribute the land for a development of 80 one-bedroom, 32 two-bedroom and 28 three-bedroom units. The developer went through most of the city review process, including approval from the planning commission. But after two years of work and prior to the proposal reaching the City Council, the firm dropped out because it didn’t see the project as financially worthwhile, according to Thousand Oaks officials. Operating Engineers retained its entitlement on the property for seven years, handing it off to Meta last year. Meta kept the same 140 total unit count, but proposed building half as many one-bedroom units and substantially more two- and three-bedroom apartments to make the project geared more toward families, and therefore, higher rents. However, the city objected because the site is not near the amenities a family would need, such as groceries, parks and schools. That ended up scuttling the plan. John Prescott, director of community development in Thousand Oaks, said the land just wasn’t right for residential development. “It all sounded good on paper to build affordable housing,” he said. “But once Engineers looked at it, they really couldn’t find a way for it to meet a certain rate of return. Meta took a few pokes at the project and came to a similar conclusion.” Last week, the City Council approved an amendment to its General Plan that changes the zoning to industrial, given its proximity to Amgen’s campus and the Rancho Conejo Industrial Park, a five-building, 83,000-square-foot complex. High demand In the years since the project was first dreamed up, the city has encouraged apartment construction along Thousand Oaks Boulevard, a much more central location. Christofferson, the broker, agreed that the lot wasn’t ideal for housing. “It would need to be near people that need affordable housing and how many people in Newbury Park really need that? It’s not like building it in the middle of the Valley where there may be more need,” he said. However, affordable housing advocates in the area say the demand for reasonably priced apartments is high. There are 1,081 affordable rental units at 23 complexes in the city with an additional 60 units in development. That is out of a total housing stock of about 6,400 apartments. Tracy Miller is senior project manager of Many Mansions, a Thousand Oaks non-profit that has built 12 affordable housing complexes in Ventura County, including eight in Thousand Oaks. But it still has a waiting list of 1,100 households. She said many of the families that qualify fall in the “extremely low income category,” which is no more than $43,700 in income for a family of four. “There’s a huge need for affordable housing in Thousand Oaks,” said Miller. “We’re finding it really challenging to get a new project in the pipeline. There is no great, definitive strategy we have. That’s just the reality right now.” The market rate for a two-bedroom unit goes for a little less than $1,800 a month on average, while a similar affordable unit can go for $600 a month for families in the lowest bracket. For housing advocates, the inability of developers to build affordable units on the lot near Amgen is not a good sign. With the abolishment of redevelopment agencies last year, it has become increasingly difficult to find money to make affordable housing development viable. The Thousand Oaks redevelopment agency contributed in some fashion to all eight low-income developments constructed by Many Mansions. What’s more, the state provided other funds for affordable housing developments in the past, but budget woes mean such funds are harder to get. And in October, Gov. Jerry Brown vetoed a bill that would have let local officials require market-rate multifamily developers to include a small percentage of low-income units in new projects. In a statement after the decision, Brown said the law, while well intended, can “exacerbate these (development) challenges, while not meaningfully increasing the amount of affordable housing.” As a result, Miller from Many Mansions said the group is more likely to look at rehabbing or rebuilding older properties. “At this point, developers are going to be much more creative,” she said. “It could also involve partnerships for us with for-profit developers.”

Featured Articles

Related Articles