San José ----  An aggressive strategy that will continue San José’s strong commitment to finance the creation of another 6,000 new affordable homes over the next five years will be considered by the San José City Council today.

The San José Housing Department has recommended that $544 million in city and Redevelopment Agency funding projected over the next five years be leveraged to obtain an estimated $1.6 billion from state, federal and private sources for a total of more than $2.1 billion to support the development of affordable homes. 

“More than any city in California, San José continues to deliver thousands of new homes that our families can afford to rent or buy,” said San Jose Mayor Ron Gonzales.  “Our strategy has already been successful to expand the opportunities for the people who live here to find a place they can afford to live.  With this plan, we will work hard to make sure affordable housing will contribute to our city’s long-term prosperity and economic competitiveness.”

The San José’s combined affordable housing programs will assist over 15,000 households in the next five years.  In addition to the new 6,000 homes, the city’s plans will support the acquisition and rehabilitation of 2,000 existing affordable housing units; paint grants and rehabilitation loans for over 7,200 households; and 500 first-time homebuyer loans for San Jose teachers.

The projected five-year total of 6000 homes would include the construction of 1500 units designated for extremely low-income families.

“Although San José has long been the leader in the region and state for creating housing of all kinds, many families still find it very difficult to live here because of growing housing costs, especially those with the lowest incomes,” said Gonzales. 

“These are ambitious goals in a challenging economy to meet the pressing needs of both our families and our employers in Silicon Valley. With our renewed financial commitment, focused efforts, and continuing creative partnerships, however, I am confident we will achieve the results we want in the next five years.”

Since 1998 San José has already achieved substantial success by earmarking over $239 million in “gap financing” that has resulted in the construction of more than new 5,400 affordable homes throughout the community. Moreover, an additional 2,200 affordable homes were saved by the city’s investments and partnerships to acquire, rehabilitate, and prevent them from conversion to market-rate housing.

Total construction costs in the last five years was more than $1.1 billion, including over $877 million in other funding sources.  The city’s new five-year housing investment plan will build on the strategy that Gonzales accelerated after he became mayor in 1999 and called for doubling the rate of production of affordable homes.

 “Funding affordable income housing has traditionally been a challenge for cities and developers, especially in the Bay Area because of our high cost of housing,” said Leslye Corsiglia, Director of the San José Housing Department. “San José’s pledge of more than $239 million over the past five years and almost doubling it to $544 million over the next five years is one of the highest commitments of local funding for affordable housing in the California.”

Affordable housing funds are administered by the City of San José Housing Department, which uses a variety of funding sources to finance its program, including funds set aside by the San José Redevelopment Agency and a unique fund for extremely low-income housing created by the city council in May 2001. San José also receives federal funding, including $8.9 million from the HOME Investment Partnership program, and it has been successful in leveraging state housing tax credits to create affordable homes.