$5,000 Grant Secures Tax Exemption, Permanent Affordability
MTC's newly launched Bay Area Housing Finance Authority (BAHFA) affiliate this month closed its first-ever transaction, funding a $5,000 grant through its newly formed Welfare Tax Exemption Preservation Program to enable nonprofit Eden Housing to convert its newly acquired 24-unit De Anza Terrace apartment complex in Alameda County's unincorporated Ashland community to permanently affordable housing.
Hayward-based Eden Housing used the BAHFA grant to qualify for a property tax exemption from the state Board of Equalization, which conditions such exemptions on a minimum $5,000 in public financing, full or partial ownership by a nonprofit organization, and a recorded deed restricting occupancy to households with incomes no greater than 80 percent of the area median.
"The elimination of property taxes in an affordable housing owner's operating budget is sometimes enough to achieve permanent affordability," explained BAHFA Director Kate Hartley. "This was the case for Eden Housing and De Anza Terrace. We're so happy to have been able to jump in and help get this housing preservation deal over the finish line."
Eden Housing, which has preserved thousands of affordable homes across the Bay Area, paid $9 million to buy De Anza Terrace, which is adjacent to another affordable housing property that already was owned by Eden. When De Anza Terrace came on the market, Eden turned to BAHFA for help in converting the complex to permanently affordable housing.
"We're grateful BAHFA could provide the assistance we needed to make De Anza Terrace affordable into the future," said Kevin Leichner, Eden's Vice President of Development, Housing Finance and Acquisitions. "This is a great home for 24 families and we're really happy to be provide the residents with stable, safe and affordable housing."
Established by state legislation in 2019, BAHFA is the first regional housing finance authority in California. The authority's mandate is to help produce new housing, preserve existing affordable housing, and protect vulnerable residents from displacement across the nine-county Bay Area. In addition to the Welfare Tax Exemption Preservation program, BAHFA initiatives include an Affordable Housing Preservation Pilot program, which helps developers and investors buy and rehabilitate apartment buildings and maintain their affordability for existing and future residents. BAHFA also is teaming with the Association of Bay Area Governments' BayREN unit to deliver energy-saving upgrades for housing preservation projects.