Oakland apartment building opens doors to low-income families

Open up your daily newspaper and there’s no doubt you’ll find a story about a greedy bank, home foreclosure or some aspect of the financial crisis that has left people reeling. But this isn’t one of those stories. It’s a story about banks supporting a project even though they wouldn’t necessarily earn a profit from it, about a community organization helping those in need, and about people coming together and making what seemed like an impossible project succeed.

A new apartment building designed to create affordable housing to serve low-income families, formerly homeless individuals and people living with HIV/AIDS in the Adams Point neighborhood in North Oakland had its grand opening on Wednesday. Starting in 2007, non-profits, banks and governmental organizations joined forces to renovate this 31-unit apartment building that would serve this in-need population.

As the grand opening got under way, people walked through the building and into the outdoor courtyard filled with blooming flowers saying “Wow!” and “It looks great.” The building’s façade was freshly painted a light yellow with a brick red-colored trim and inside the apartments, granite countertops had been installed along with new appliances, floors, windows and fixtures such as ceiling fans.

The Fairmount Apartments before renovation.

Just four years ago if you walked by 401 Fairmount Avenue, you would have seen a dingy beige building in serious disrepair. Inside, the apartments had mold and rust, the kitchen cabinet doors were falling off their hinges and the corners of the linoleum floor were peeling up. Puddles of water were pooled on the roof even though it wasn’t the rainy season.

“When we were first getting to know this building in 2007 it was really a wreck—we felt unsafe being in this building,” says Eve Stewart, director of housing development for Affordable Housing Associates (AHA), which is a Berkeley-based organization that creates housing for low-income communities and is the group that spearheaded this project. “The most disturbing thing was that the owner was continuing to rent the apartments.”

AHA bought the apartment building in 2007 with a plan to do a complete rehabilitation. The 35-unit building was built in the 1960’s and had “serious deferred maintenance, was in a dilapidated state and had building code violations,” says Neil Saxby, AHA’s project manager.

But just as the association was ready to start work at the end of 2008, the housing market crashed, California froze rates on state housing bonds, and AHA was no longer able to get a subsidized rate on their bank loan. “We were watching our financing basically vanish before our eyes,” says Stewart.

Saxby says AHA reduced the scope of the work to be done on the building, while still trying to retain the quality of the renovation, and meanwhile dedicated time to working on investor relationships in the hopes of not losing the support they did have and finding others willing to invest.

The plan worked—their original funder, Enterprise Community Partners, stayed with them while other investors, such as Wells Fargo Bank, Northern California Community Loan Fund, Federal Home Loan Bank of San Francisco, Mechanics Bank, California Housing Finance Agency and others also helped finance the project despite the fact that it was a risky time to get involved in the housing market.

“If you think of layered financing as a cake, even with what happened with the collapse, it still rose,” says Claudia Cappio, executive director of California Housing Finance Agency, a governmental organization that helped fund the project. “You see how lives have been transformed and it really makes it all worth it.”

Thanks to all the additional funding, AHA kept the project going and was able to finish construction in 2009. “It’s probably one of the few affordable housing projects actually completed in Oakland during this crazy housing crisis,” Saxby says.

Now, 401 Fairmount Avenue is a seismically safe, lead-free, green-construction apartment building complete with wheelchair accessibility, modern elevators, solar hot water heating, dual-paneled windows, high efficiency hot water boilers, low water use plumbing fixtures, air conditioning and an outside sitting area with landscaping and flower beds.

Currently, the building is fully leased. Of the 31 apartments, 26 are one-bedrooms and five are two-bedrooms. “But what’s special about this project is it’s a mixed population,” says Saxby. “Eleven of the units are for people with special needs, people with general disabilities and previously homeless people.” Rent prices are well below market rate, ranging from 20 to 50 percent below prices for the area. “It’s targeted for people with very low incomes,” says Saxby.

Additionally, tenants can receive on-site mental health services from Alameda County Behavioral Health Care Services if needed. One of the residents, Joe Ford, says he was homeless since 2008 and is happy to have moved in and be a part of this project. “It shows me unity,” he said at the grand opening on Wednesday. “I’m glad to be part of this unit and I’m going to be here a long time.”