A Habitat for Humanity project that would make it possible for low- and moderate-income households to afford to purchase a home in Novato has received a $5.2 million allocation from Marin County supervisors.
The county had previously committed more than $760,000 to the project so the new allotment increased its total contribution to about $6 million. The project, estimated to cost $84 million, still has a large funding gap.
Habitat for Humanity Greater San Francisco, an independent affiliate of the international organization based in Atlanta, Georgia, has secured more than $22 million in permanent and temporary financing and has an additional $10.7 million in pending requests from public and private sources.
Maureen Sedonaen, chief executive officer of Habitat for Humanity Greater San Francisco, said the project’s estimated cost has shot up 40% since 2019.
“It’s breaking my heart,” said Sedonaen, who attributed the increase to a rise in building costs. “We have to put in all of the infrastructure, the roads, the sidewalks, everything.”
The 13.6-acre building site, which is vacant aside from Pacific Gas and Electric Co. transmission infrastructure, is at 8161 Redwood Blvd. just north of Buck Center Drive. The project would be adjacent to the Days Inn Hotel.
The project calls for 23 buildings that will contain one to six homes each. Sixty of the homes would be priced to be affordable to households earning no more than 80% of the area median income for Marin County. Based on 2024 income levels and current mortgage rates, that would put sales prices between approximately $467,063 and $689,554 for the low-income homes.
Another 20 homes will be priced to be affordable to moderate-income households earning between 80% and 120% of area median income.
“This is really a unique opportunity to invest in low-income families through a homeownership model, which is unusual in affordable housing,” Leelee Thomas, deputy director of the Marin County Community Development Agency, told supervisors prior to the April 15 vote.
Thomas also highlighted the fact that each home would have two to four bedrooms.
“Much of our housing isn’t serving larger, often intergenerational families, so this is a unique opportunity,” she said.
Sidney Stone, a vice president for Habitat for Humanity, told supervisors that while buyers of moderately priced homes will be charged a small interest rate, buyers of low-income homes would be required to pay no interest on their mortgages.
Stone said the cost of purchasing both low- and moderately-priced homes would be capped at 30% of the buyers’ income, and Habitat for Humanity would require no down payment. Deed restrictions on the properties would guarantee their affordability for 99 years.
The county’s $5.2 million allocation will come from its housing trust fund. Novato has also allocated $800,000 from its affordable housing fund and $200,000 from its general fund. Novato will get to count the homes toward its state mandate to foster the creation of 2,090 new residences by 2031.
The Marin Community Foundation has already given the project $1.9 million in grants since 2019 and agreed to lend Habitat for Humanity another $5 million.
Habitat for Humanity also expects to receive support from the state’s CalHome program, which provides grants to local public agencies and nonprofits for first-time homebuyers, and the organization is applying for $2 million from the Affordable Housing Program, which is funded through the Federal Home Loan Banks system.
“I’m really pleased to see how far this has come,” said Supervisor Eric Lucan, who supported the project when he served on the Novato City Council before being elected supervisor.
“What is so unique about Habitat’s model is the ownership and equity component,” Lucan said. “As we look to advance housing countywide, having the right mix of rental and ownership with equity is really key.”
While buyers will get some return on their investment, they will not be allowed to sell their properties at market rates. They must be sold to another income-qualified buyer at an affordable price that is consistent with Habitat for Humanity’s resale formula.
“They don’t get market equity, no,” Sedonaen said. “They get every dollar they paid in their mortgage interest plus a little more based on the consumer price index.”
According to a report by the county planning office, the Novato project “seeks to address systemic barriers disproportionately impacting communities of color by offering accessible housing in a high-opportunity area.”
Sedonaen, however, said the decision regarding who is allowed to purchase the homes would be made by lottery, although “affirmative marketing” will be conducted to stimulate applications.
“It’s ‘affirmative’ because we don’t just post the information,” she said. “We’re trying to make sure that people who have historically been locked out of homeownership, both institutionally and racially, know about it. We want to make sure we’re targeting those groups.”
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