Editorial: Council made the right call on 'Westside' project
Jun 16, 2009
City council members made the right - and really, only - decision when they indicated last week they would not lend $7.4 million to a local nonprofit to build the Westside Apartments affordable housing project.
The 32-unit project, consisting of five buildings, has been in the works for nearly a decade. City officials first committed Redevelopment Agency funds to the project in 2000 - $1.5 million to acquire land.
Such a past agreement, however, at no time committed Hollister to funding the entire project and building costs now reaching $7.4 million, the amount most recently requested by the Community Service Development Corp. of San Benito County. Hollister council members at their meeting last week sent a message that the funds would have to come from the outside because the price tag is too hefty as the RDA's restricted fund balance stands at just $6.5 million.
Hollister is in a much different position than it was 10 years ago, as is the housing market. The local and national economies are in a historic recession. Tax dollars - specifically, RDA funds - are dwindling as government officials examine broad cuts to budgets.
When this project began, city coffers were artificially flush. Leaders had neglected to fund necessary infrastructural upgrades for years as building impact fees continued feeding their operating budgets and a cash reserve that sank as quickly as the local economy when the moratorium hit in 2002.
Now, citizens are paying the back taxes of sorts for those prior mistakes in the form of such increases as inflated sewer bills - to fund the $100 million-plus wastewater plant - and a 1 percent sales tax hike deemed necessary by voters in late 2007 to keep city services maintained. And on that, Hollister is barely getting by and faces the prospect of widespread, major cuts - or an extension to the sales tax increase - by 2013 when Measure T expires.
Since this is a supply and demand concern - whether the supply of affordable housing matches the need - then another crucial consideration in rejecting such a loan is the fact that the county's housing market has flopped even more so than the historically poor national industry.
The downside of the cycle has naturally and vastly increased the supply of "affordable" housing in Hollister. The need, or demand, has declined since CSDC started the project.
That, however, does not mean the proposal lacks validity, or that it does not stand to benefit the community, particularly the west side. It does, eventually, when the cost is lowered or Hollister's financial position strengthens and shows signs of long-term stability.
Until then, $7.4 million is simply far too costly for taxpayers to burden.
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