During its meeting Wednesday night, the city council is likely
to discuss a long-delayed request from a developer who wants to
increase the prices of below market rate housing stock.
MORGAN HILL
During its meeting Wednesday night, the city council is likely to discuss a long-delayed request from a developer who wants to increase the prices of below market rate housing stock.
Richard Oliver of Morgan Hill-based Dividend Homes is asking the council to increase the price guidelines by $50,000 to reflect increases in building costs on BMRs, which are houses designated for middle- and low-income families that otherwise would not be able to buy them at normal market prices. The actual price an individual or a family pays is determined by a formula that takes into account the household income and other factors.
There were 519 families on the interest list, of which 119 were on the low, 390 on median and 10 on the moderate income interest list, according Garrett Toy, director of the Business Assistance and Housing Services Department.
As a for-profit developer, Dividend is mandated under Measure C to offer 20 percent of houses in its developments at BMR prices. Meanwhile, Gilroy-based nonprofit South County Housing has built most of the BMR houses with assistance from “a number of incentives,” including funds from the Redevelopment Agency and other grants. SCH has gained an unfair advantage as result, Oliver said, and he is seeking equity. The cities of Gilroy and San Jose both use formulas that are more favorable to for-profit developers such as Dividend, he said, and “it’s possible for a nonprofit to sell the same unit that we sell for a higher price.”
A South County Housing spokesperson wasn’t able to respond to the assertion by press time.
Oliver’s company has built more than 500 houses in the city over the past decade, including 40 BMRs. It currently has 15 to 20 homes either on the market or in the pipeline. He wants the council to implement an interim raise so that he can begin marketing for sale two complete BMR units.
“We want to work with the city to meet the legitimate needs of the community,” Oliver said Monday by phone from Santa Monica, where he will be through Dec. 3 for a family emergency. He has written the city clerk asking for a one-week continuation of the matter, but it was unclear whether it would be granted. City officials were attending training Monday and weren’t immediately available for comment.
At the Nov. 7 council meeting, council member Mark Grzan asked that council delay action on the matter because it would affect other developers, according to minutes from that meeting. Grzan wanted the city staff to research the request and report back sometime in December, but the council voted 5-0 to direct the staff to research and present detailed BMR housing stock information at Wednesday’s meeting.
