SAN JOSE — A Santa Clara County housing agency says its deals to buy senior citizen apartment complexes in San Jose will help it chart a steady course for the organization’s affordable homes mission.
The property deals involve the Santa Clara County Housing Authority’s purchase this month of Girasol Apartments at 1710 Alum Rock Avenue and Jardines Paloma Blanca apartments at 132 North Jackson Avenue, both in east San Jose.
In both instances, the Housing Authority bought below-market-rate apartment complexes whose delinquent mortgages were foreclosed by the U.S. Housing and Urban Development Department, or HUD.
HUD then turned around and immediately sold to the Housing Authority the two apartment complexes that the federal agency had just seized through the foreclosure proceeding.
That represented an unusual way for the properties to land under the ownership of the county Housing Authority.
“These acquisitions mark a new role for the agency, allowing us to preserve and enhance the availability of affordable housing in the region,” said Preston Prince, the Housing Authority’s executive director.
The deals also help the Housing Authority to push beyond a financial blunder it committed when it bought a north San Jose building that at one point it had intended to use as its headquarters.
In 2020, the Housing Authority bought an office building at 3553 North First Street for $37.35 million, saying that it planned to use the prominent property for its head offices.
But within two years, that property deal morphed into a $13 million loss when the Housing Authority decided it would pivot to a different strategy for its headquarters. In 2022, the county agency sold the building for $24.5 million.
Now, the Housing Authority can use the purchases of the two apartment buildings in east San Jose as a springboard to a more focused and successful approach to its primary mission.
“It is an excellent example of how we, as a Public Housing Authority, continuously strive to make a difference in the lives of our residents,” Prince said, referring to the new role for the county agency.
The Housing Authority paid $4.15 million for the 60-unit Girasol apartments complex and paid $2.65 million for the 42-unit Jardines Paloma Blanca residential center, according to documents filed with the Santa Clara County Recorder’s Office.
In both transactions, the grant deed documents for the respective apartment complexes specify that rental payments for the residents should be tied to the area median income for Santa Clara County.
In a two-person household, that income restriction would point to a monthly payment of around $1,800 a month.
Federal officials welcomed the outcome for the foreclosed properties, the assurance that their rental payments would remain affordable, and the Housing Authority’s involvement in preserving the low-cost structure for the apartments.
“HUD is pleased to provide this opportunity to preserve the long-term affordability of these apartments for low-income seniors in East San Jose,” HUD Pacific Regional Administrator Jason Pu said in a prepared release.
The federal agency said it is looking forward to an ongoing partnership with the Housing Authority. County officials anticipate that the Housing Authority and HUD might strike a deal for a purchase of a third apartment complex in San Jose that has also tumbled into default.
For now, however, the Housing Authority will focus on the two apartment complexes, including potential upgrades to the residential properties that it has just bought in east San Jose.
“The renovations to the buildings that the Housing Authority makes will allow the residents to continue to age in place and live with dignity in safe, decent, and affordable housing,” Pu said.