Sara Conner Court

GENERAL DESCRIPTION

Sara Conner Court is a 57-unit residential project located on an infill site in Hayward, California, a suburb on the east side of the San Francisco Bay. The developer’s goal was to build affordable rental housing targeted mainly at working families while using green materials and construction methods.

Units range in size from 552 to 1,328 square feet (51 to 123 square meters), have one to three bedrooms, and are located in four buildings surrounding an interior courtyard. A variety of financing sources was used in the development of Sara Conner Court, including city loans and grants, state low-income housing tax credits, and three grants that were put toward various green features.

Eden Housing is a Hayward, California–based affordable housing developer that was founded in 1968. It has developed over 4,700 affordable units in the San Francisco Bay Area and northern California, and currently manages approximately 2,400 affordable units.

SITE DESCRIPTION

The site, which is located along Mission Boulevard, a busy, five-lane road that serves as the primary commercial corridor through the city, was first identified for possible redevelopment by the city of Hayward in previous plans. The city felt that reuse of this parcel would set the tone for future redevelopment along Mission.

Rectangular in shape, the site measures 1.85 acres (0.75 hectare) and is bordered by Mission Boulevard to the east, Lafayette Avenue to the south, Pulaski Drive to the west, and apartments and a restaurant to the north.

Land uses in the area include a variety of retail and commercial properties to the north and south along Mission Boulevard, and single-family homes to the west. Sara Conner Court is adjacent to a grocery store, a burger/malt shop, and a large regional park. An elementary school and a middle school are both within walking distance of the site.

DEVELOPMENT AND APPROVALS

In the summer of 2003, the owner of the property approached Eden Housing about purchasing the site for affordable housing. Prior to Eden Housing’s acquisition, the property had been the site of a milk- and juice-processing plant and a small retail center. The processing plant was winding down its operations and the owner felt it was time to sell. Using a bridge loan, Eden Housing bought the site in May 2004.

Six months earlier, Eden Housing had approached the city of Hayward with a request to rezone the property from neighborhood commercial to high-density residential to accommodate the substantial number of units. At the same time, Eden Housing also applied for city financing.

Unlike many larger municipalities that rely on a very formal request for proposals (RFP) process for allocating affordable housing dollars, the city of Hayward has a more informal, over-the-counter process. Furthermore, Eden Housing had established a long-term relationship with the city through its previous affordable housing projects, and was awarded the necessary rezoning and financing without complications in June 2004.

The city assisted with outreach to the surrounding neighborhood, providing Eden Housing with the names of neighborhood leaders. Eden held several meetings with neighbors to introduce the project and address any concerns or issues. Parking was their primary concern, and Eden Housing responded by adding a secondary parking lot to the design. Given the infrequent level of mass transit service on Mission Boulevard, Eden Housing felt this change was merited.

Another project concern was whether or not to close Lafayette Avenue—the street running along the south side of the site—and convert it into a park. Neighbors felt the street was needed for proper ingress and egress to the neighborhood, so it was narrowed and retained. Also, a traffic signal with a pedestrian crossing light was added at its intersection with Mission Boulevard. Narrowing Lafayette Avenue created additional open space for the project, calmed traffic, and made the entire area more pedestrian friendly.

One final challenge prior to breaking ground was addressing the three existing tenants that occupied the retail center. Eden paid the relocation costs for the flower shop, which included the search for new space, moving, and tenant improvements. Another tenant—a Laundromat—agreed to sell its equipment to Eden Housing as compensation and close the establishment. The final tenant—a barber—retired and accepted compensation based on tax returns from the previous two years. In total, Eden Housing paid approximately $100,000 in relocation costs for the existing tenants.

After finalizing the acquisition and financing of the property, Eden Housing discovered the site was contaminated. The flower shop located in the former retail center was previously a dry cleaner, and the presence of perchloroethylene (PERC)—the primary chemical used in dry cleaning operations—was discovered in the soils below the site. Remediation involved excavating and hauling away the contaminated soils, and adding a gas vapor barrier. In total, remediation costs were approximately $650,000. Although remediation was unforeseen and costly, the financial impact was mitigated, as Eden Housing had received slightly more equity than anticipated from the state of California.

FINANCING

As with most affordable housing projects, the development of Sara Conner Court was financed by numerous sources. Two loans from city agencies provided 30 percent of the development cost, and federal low-income housing tax credits (LIHTCs), administered by the state of California, provided 55 percent. Additional sources of financing included a long-term loan by Silicon Valley Bank, as well as grants from various nonprofit organizations and foundations.

Large portions of affordable housing projects are often funded by municipal and state programs. Typically, Eden Housing and other affordable housing developers secure financing from the city before finalizing the purchase of a site or pursuing additional sources of revenue. In the case of Sara Conner Court, however, Eden Housing actually bought the site prior to city approval and financing, but both were granted shortly after the purchase. The site was purchased in May 2004 and city financing was awarded in June 2004.

In order to receive federal tax credits administered by the state, California requires developers to procure at least 20 percent of the development budget from city or inclusionary housing sources. The allocation of tax credits is very competitive, and developers must show that their project will meet various criteria, including environmentally friendly construction, suitable amenities at and near the project, and neighborhood revitalization.

With local financing covering 32 percent of the development budget, Eden Housing applied with the state for low-income housing tax credits in July 2004, only a month after obtaining the property and financing. The state awarded the tax credits, which allowed construction to begin in March 2005.

In addition to HOME and Community Development Block Grant (CDBG) funding, the city of Hayward’s redevelopment agency extended a 55-year low-interest loan to finance the project. Loan payments are based on residual receipts—after rents are collected and operating expenses are paid, the city retains a portion of the remaining revenue. The implication is that the loan is not fully repaid, and is renegotiated or forgiven after the term expires. Additional grants from nonprofits and foundations constituted a small fraction of the development cost and went primarily to environmentally sustainable aspects of the project.

DESIGN

Sara Conner Court consists of four buildings oriented along the perimeter of the site surrounding an interior courtyard. Three structures are three stories in height, and the fourth and largest one is four stories, including a ground-floor parking garage. The 57 units range in size from 552 to 1,328 square feet (51 to 123 square meters), contain one to three bedrooms, and have mid-grade flooring and appliances.

The developer incorporated communal space into the project. A community room, computer lab, and landscaped courtyard are available to the residents. The courtyard includes a playground, benches, picnic tables, and grills; the area is a popular amenity among the families who live at the development.

There are five pedestrian access points to the courtyard, as well as a driveway that leads to nine parking spaces. The remaining 86 parking spaces are located under the main building and in two surface lots on site.

The architectural style of Sara Conner Court is a contemporary interpretation of the craftsman style, with varied building heights, articulated exterior stucco walls, and pitched roofs. The upper level of each structure features lighter-colored stucco than the lower floors, with vertical wood beams spaced at regular intervals. The architect’s intention was to create a clear attic story, congruity among the buildings, and a human scale for the project.

A crucial design consideration for the city was the appearance of Sara Conner Court from Mission Boulevard. As an important commercial corridor—albeit one dominated by dated, automobile-oriented uses—the city wanted its redevelopment to be attractive and pedestrian friendly. Even though it lacked entrances for pedestrians or automobiles along Mission Boulevard, the architect ensured that the exterior would be articulated rather than a monotonous wall. To improve the pedestrian experience, the developer installed ground-floor windows and substantial landscaping along the building exteriors, and mitigated the impact of the ground-floor parking garage with screening vegetation and variously colored materials.

Eden Housing also constructed sidewalks with a landscaped buffer along the three streets that surround the site. Prior to the project, there were no sidewalks along Mission Boulevard. It is the city’s long-term intention to create a pedestrian system along the boulevard, but for now this will be implemented in a piecemeal fashion as redevelopment occurs.

GREEN FEATURES

A number of energy-efficient features were incorporated into the interior design of Sara Conner Court. Among them was the installation of Energy Star appliances, which meet a national standard for energy efficiency. Other features included low-flow toilets, sealed HVAC ducts for energy efficiency, low-emission carpeting, and low-VOC paint. Also, units do not have air conditioning, but instead are designed for good natural ventilation and have ceiling fans.

Additional features that are not “green” by definition are higher-cost, longer-lasting materials that reduce the use of resources over time. For example, Eden Housing installed a 50-year roof rather than one with a shorter life span, and also used natural linoleum flooring rather than vinyl tile.

On the outside, the green features include bioswales and drought-resistant plantings. Bioswales are depressed areas that collect stormwater and allow it to gradually infiltrate the soil rather than run directly off site. The areas are typically landscaped and only slightly lower than the surrounding grade, and are placed stategically around the site. Drought-resistant plantings are used throughout much of the landscaped area to reduce water usage. In addition, hydrozoning is practiced, which is the clustering of plants that require similar amounts of water, maximizing the efficiency of required irrigation.

The site also has regular bus service that connects to the nearest Bay Area Rapid Transit (BART) station. BART is part of the extensive rail service available in the Bay Area. Being located near mass transit gives residents without cars access to services and employment opportunities, and provides those who do drive with an option to reduce greenhouse gas emissions and fuel consumption.

Financial grants were received from various foundations and nonprofit groups for energy-efficient measures. StopWaste.org, the waste management agency for Alameda County, provided $55,000 as part of its Green Building in Alameda County and Bay-Friendly Landscaping program, which was used for landscaping features intended to conserve water on site, water-efficient toilets, and the aforementioned 50-year roof. Enterprise Community Partners, the tax credit investor for the project, has a foundation called Green Communities, which provided a grant of $50,000 for the upgraded linoleum flooring. A Home Depot Foundation grant of $25,000 was originally intended for low-VOC carpeting (that was already standard practice for Eden Housing and therefore included in the original budget), but was instead used for improved duct sealing.

Sara Conner Court is one of the first projects to be certified under GreenPoint, the Bay Area’s regional green rating system. This independent, third-party rating system is a program of Build It Green, a nonprofit organization whose mission is to promote healthy and energy-efficient buildings in California.

MARKETING

Sara Conner Court rents to families earning between 30 and 60 percent of the area median income (AMI), which is considered to be $83,800 for a family of four as of 2006. For example, a family of four earning $43,050 annually, or 50 percent of AMI, would be eligible for a three-bedroom unit for $1,012 per month. By affordable housing standards, $1,012 is considered to be 30 percent of the monthly income for a yearly income of $43,050.

Using this qualification system, families of various sizes and incomes within the 30 to 60 percent AMI range pay between $506 and $1,367 per month for rent, depending on the size of the unit they occupy.

Tenant screening at Sara Conner Court is stringent. Prospective tenants are asked to provide proof of income through pay stubs and a tax return, employers are contacted for additional verification, and a credit check and criminal background check are conducted for each household member. Tenants with a past eviction are automatically ineligible for housing. As a result of these measures, approximately half of all applicants are refused.

As of September 2007, the wait list for a unit at Sara Conner Court reached 200 households. Of those, there were ten to 15 applications each for units at 50 and 60 percent of AMI, and the remaining majority for those at 30 and 40 percent. As of late 2007, 157 people lived at Sara Conner Court (2.75 persons per household), 70 of whom are children (45 percent of the total).

Because of the demand for units at Sara Conner Court, very little advertising is needed. A rental sign with contact information is located in front of the property, and Eden Housing also advertises online on Craigslist. Eden is considering future advertising with major area employers, particularly institutional employers that may have a high amount of moderate-income employees.

A full-time manager and a part-time maintenance professional work at the on-site office. Eden Housing conducts various programs and activities at Sara Conner Court. For instance, a daily after-school program is held for residents, the computer lab is available for all tenants, and summer field trips are arranged for children. Also, a neighborhood watch program is run out of the management office.

Eden Housing tailors its outreach programs to each property: at Sara Conner Court, for example, outside service providers are contracted to provide financial literacy programs and homebuying assistance. Overall, the mission of Eden Housing is to build and maintain high-quality, well-managed, service-enhanced affordable housing communities that meet the needs of lower-income families, seniors, and persons with disabilities.

EXPERIENCE GAINED

A number of green building techniques were tried for the first time by Eden Housing at Sara Conner Court, and require ongoing monitoring as to their cost-effectiveness. The developer believes that the green features are the right thing to do, and speculates that spending more upfront for them will pay off in the future.

In recent years, Eden Housing has been increasingly using green features with projects as they have gained popularity in the industry, but Sara Conner Court represents a step forward. The ongoing challenge is to educate staff internally as well as network at the state and national levels as to best green practices. Working with architects, engineers, and contractors who are knowledgeable and enthusiastic about green building is important, too.

The developer also acknowledges that remediation for sites where dry cleaning was a previous use is very difficult and expensive, as PERC is a very pervasive chemical. While noting the benefit of developing brownfields, Eden Housing questions whether they will ever again redevelop a site that was formerly used for dry cleaning.

Minor changes the developer would have made to Sara Conner Court include installing air conditioning in the management office and community room, the installation of an automatic garage door closer for both garage doors, and the provision of a drainage system for the planters that sit outdoors on the second-level entryways of Building I.

DRIVING DIRECTIONS

From San Francisco International Airport: Take Highway 101 south approximately ten miles (16 kilometers) to Highway 92. Take 92 east 13 miles (21 kilometers) across the San Mateo Bridge to the Interstate 880 interchange. The freeway ends, but continue straight on Highway 92, which becomes Jackson Street at Interstate 880. Take Jackson approximately two miles (3.2 kilometers) to Mission Boulevard. Turn right and follow Mission for five miles (eight kilometers). The site is located at the corner of Mission Boulevard and Lafayette Avenue.

Driving time: 40 minutes in nonpeak traffic.

Sam Newberg, report author
Jason Scully, editor, Development Case Studies
David James Rose, copy editor
Joanne Nanez, online production manager
Ted Thoerig, editorial associate

This Development Case Study is intended to serve as a resource for subscribers in improving the quality of future projects. Data contained herein were made available by the project’s development team and constitute a report on, not an endorsement of, the project by ULI–the Urban Land Institute.

Copyright © 2008 by ULI–the Urban Land Institute
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