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Housing project remains on ice

Recession put the brakes on affordable apartments

Posted: July 5, 2009 9:23 p.m.
Updated: July 6, 2009 4:55 a.m.
 
Plans for an affordable housing development in Canyon Country appear to be on long-term hold, another victim of the mortgage crisis.

Mercy Housing was set to close escrow at the end of 2008 on the 67-unit Hidaway Apartments, but the California Housing Financing Agency was unable to see the deal through after it lost its ability to issue bonds.

The recession compounded the problems.

"Financing is much more difficult now," said Erin Moore-Lay, Santa Clarita's housing program administrator.

Mercy Housing California is still interested in finding a site in the Santa Clarita Valley, Project Developer Ben Phillips wrote in an e-mail.

"Although CalHFA (California Housing Financing Agency) still cannot issue bonds, other lenders and bond issuers remain in the affordable housing financing market and Mercy Housing California is actively looking to find new development opportunities," Phillips wrote.

Moore-Lay echoed that and said: "The city is always interested in hearing about any options for creating affordable housing."

Mercy Housing was founded in Nebraska in 1981 and, according to its Web site, has had a hand in the development, preservation or financing of more than 35,700 affordable homes.

Last fall, the City Council approved a $2.7 million loan to Mercy Housing, and a $1.6 million loan was approved by the county Board of Supervisors.

Moore-Lay said she believed Mercy Housing needed a roughly $9 million mortgage for the project.

While Mercy Housing officials declined comment, Moore-Lay said the nonprofit organization is still involved in negotiations with the apartment building owner. She said the negotiations involve money that was put into escrow.

Mercy Housing planned to purchase the complex and remodel the bathrooms, replace fencing and make other improvements to the 22-year-old complex.

The Hidaway Apartments - located near the intersection of Soledad Canyon Road and Whites Canyon Road - already have 14 affordable units.

Santa Clarita would have gained 33 affordable housing units toward its affordable housing requirements. The valley already has about 700 affordable units.

The project drew the ire of some 31 residents who wouldn't have met the affordable-housing requirements and would have been forced to move.

Both Moore-Lay and Mercy Housing officials remain hopeful for the possibility of federal funding.

"The federal government needs to expand and enforce its Community Reinvestment Act requirements," Phillips said, "to ensure that financial institutions do not pull back from their obligations to make sound investments that serve lower-income communities and households."

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