Sunnyvale has a unique strategy to encourage the development of affordable housing: purchasing land for developers.
Most recently, as part of a $29.5 million increase in affordable housing spending, the Sunnyvale City Council unanimously approved spending $12.5 million to purchase a property at 1171 Sonora Court to help developer MidPen Housing build 170 affordable housing units. It will be the sixth 100% affordable housing project in Sunnyvale where the city government owns the land. City officials and advocates said the government’s land ownership helps keep the property affordable in the long term.
Sunnyvale Mayor Larry Klein said this approach shows a long-term commitment to affordable housing from construction to preservation.
“Over the last five or six years, we’ve made it a priority to have that control, but also to make sure that affordable housing projects move forward faster and we can spend our fees on housing removal,” Klein told San José Spotlight.
Meridian Apartments, which opened in April, is the first of the six developments. Klein said the city has been buying side-by-side single-family homes since the 1990s specifically for this project, eventually creating a 1.44-acre development.
The city must build 11,966 new homes by 2031, including 6,709 below-market housing, according to state requirements. To meet that goal, the city would have to allow the construction of 1,496 homes each year, including 839 below-market housing.
According to Mathew Reed, policy director at SV@Home, there are several ways a municipality can own the land on which an affordable housing project stands. He said a city can actively purchase land and then look for a developer to convert it into affordable housing, which is a form of “land banking.”
He said sometimes a city will invest in affordable housing projects with developers and that part of the agreement is that the city buys the land. A third possibility is that a city will take over land ownership for a project when the land is deeded to the city for affordable housing as part of a larger land agreement with a large company like Google.
Reed said that land can be difficult to acquire. For example, it is not common to buy land in the area because it is so expensive. But he added that more governments should look to buy land for affordable housing because it is more efficient and cost-effective for developers.
“Anything that makes building affordable housing more process-wise efficient and less costly in terms of capital expenditure is a good way to make sure we get more,” Reed told San José Spotlight.
City spokeswoman Jennifer Garnett said Sunnyvale takes a “proactive and opportunistic approach” when it comes to purchasing land for affordable housing. She said the city buys land on parcels that appear suitable for affordable housing as soon as they become available, or it can buy the land from a nonprofit developer — both of which help the city control the affordability of the parcel over the long term.
Sandy Perry, vice president of the board of the South Bay Community Land Trust, said taking land out of the commercial real estate market is an important step to ensure the land is used to support the local community. He added the biggest risk is that the city will later sell the land for a profit, but otherwise it could be a tactic other cities could consider.
Klein said the city plans to purchase more land for affordable housing in the future. As with the land already subsidized by the city, the location of the land is crucial, especially if it is close to public transportation.
“Our city has long been committed to affordable housing. The purchase of this property not only underscores that commitment, but also ensures that the site will remain affordable for generations to come,” he told San José Spotlight.
Contact B. Sakura Cannestra at (email protected) or @SakuCannestra on X, formerly known as Twitter.
