Apple releases first round of funds for affordable housing.
First loans to developers will be aimed at city-approved projects
Flush with tech funding, nonprofit Housing Trust Silicon Valley on Monday launched its first call to developers to tap into a $150 million Apple Affordable Housing Fund to build subsidized homes and apartments in the greater Bay Area.
The money is the first release of Cupertinobased Apple’s $2.5 billion commitment to support residential projects in the region through a wide variety of programs and initiatives.
Housing Trust Silicon Valley CEO Kevin Zwick said the initial loans will be aimed at projects approved by local cities but needing extra funding to start construction. “We’re really looking for projects that will have the most impact,” he said. “This will really move forward projects that otherwise wouldn’t happen.”
As the Bay Area’s booming economy and housing shortage have sent home and apartment prices to record levels, affordable housing developers have struggled to fund projects. State and federal grants often have been insufficient to buy Bay Area property and build subsidized units.
Apple stepped forward in November to support new, multi-family developments, firsttime buyer assistance, affordable housing projects, homelessness assistance and other housing initiatives.
“Affordable housing means stability and dignity, opportunity and pride,” Apple CEO Tim Cook said at the time. “When these things fall out of reach for too many, we know the course we are on is unsustainable, and Apple is committed to being part of the solution.”
Affordable housing developers face stiff competition for government funding, as well as high property costs to acquire land in the Bay Area. Many projects stall while developers cobble together funds for financing and construction, advocates say. Winning local and
environmental approval can also lengthen construction timelines and add substantial costs.
Michael Lane, deputy director of SV@Home, said developers of affordable projects typically need to tap funding from 5 to 7 sources, including local, state and federal agencies. The new loans will allow developers to move more quickly, and simplify the process, he said.
“This flexible, local source is really needed,” Lane said. “It feels like you’ve got a friend at the local level.”
Zwick estimates as many as 50 developments in the Bay Area could qualify for the competitive funding. “The need is so great,” he said.
The housing trust expects to identify between 6 and 9 projects, and extend about $50 million in loans, he said. The maximum loan amount will be $10 million, repayable over as long as 20 years.
The trust wants developments that are “shovel ready” — poised to start construction — by the end of 2021. The developments will support housing low and moderate-income residents, including families making up to 120 percent of the region’s median income. The new developments will have long-term agreements dedicating them as affordable housing units.
Developer applications are due March 24.
The trust plans to tap into the additional Apple funds for other loan and development programs, Zwick said.