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City plans to make housing more affordable

New agreement between city and developer gives owners equity sooner
By: Michael Althouse
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Affordable housing in Rocklin recently became more attractive due to changes made in a regulatory agreement between Vicara at Whitney Ranch and the city of Rocklin. Vicara, a 264-unit condominium project located in on Wildcat Boulevard, is designated 100 percent affordable with prices set below market rate and incentives like down payment assistance extended to qualified buyers. According to Taylor Cohee, spokesman for Vicara’s developer, Pacificwest, due to the downturn in the real estate market combined with relatively restrictive conditions placed on buyers, there are still 175 units left unsold. “The regulatory agreement was by far the most restrictive compared to neighboring cities,” Cohee said. In his presentation to the Rocklin City Council, Cohee “took all the regulatory agreements from all the neighboring municipalities and it became very apparent.” “The difference between Vicara and most affordable housing is that there are 15 percent affordable versus market rate,” he said. “Vicara is 100 percent affordable.” Cohee added that it isn’t easy qualifying for affordable housing; there are a number of conditions that must be met. With homeownership, however, come tax and other advantages that make the effort worthwhile. One of those advantages is the ability to use built up equity in the property to move up to a larger, market rate home. “People want to use these as a stepping stone,” Cohee said. “With the old agreement, there was no shared equity until after 20 years of ownership.” The modified agreement allows the homeowner to begin to realize a profit after just three years. The new agreement also commits the remaining $1.5 million in Housing Set Aside Funds from the Redevelopment Agency to apply proportionately to each unit, rather than first-come, first-served. “We wanted to make sure that if a buyer is qualified in every other respect, enough for at least the down payment would be guaranteed,” Cohee said. To further stimulate sales, the prices of homes at Vicara, currently ranging from about $150,000 to $175,000 will be reduced in the immediate future. “It will be the first time that anyone in the Sacramento area is selling anything for less than the calculated affordable price,” Cohee said. Rocklin Housing Director Leslie Woodman estimated the market rate of the new units to be about $200,000. “With the downturn in the market, they haven’t been selling as fast as we wanted,” she said, adding, the new regulatory agreement puts Vicara on more competitive terms with affordable housing in Roseville and other nearby cities. “It’s mainly because the units are not selling as fast and we wanted to make it (Vicara) more compatible with neighboring cities,” she said. In exchange for more liberal terms, the developer has agreed to keep all units as affordable housing. Previously, if any unit remained unsold for 120 days, the developer could opt-out and sell it at market rate. According to City Manager Carlos Urrutia, the original agreement was “made when the market was hot.” “Ours was very restrictive. We wanted to keep the units affordable for 30 years,” he said. Regarding the new agreement, Urrutia said, “It’s what most other cities are doing.”