Merced approves housing projects for homeless vets, victims of violence

The Merced City Council approved two housing projects this week despite scrutiny from the council and local real estate agents concerned about the cost.

The projects, one for housing domestic violence victims and the other for homeless veterans, are to be built using more than $1.1 million in Department of Housing and Urban Development funds under the city’s control.

The projects were approved in separate votes at Monday’s meeting. Both votes were 6-1, with Councilman Mike Murphy casting the dissenting vote in each case.

About $1 million is set to be loaned to the Central Valley Coalition for Affordable Housing, which will build four units to house 28 homeless veterans near 13th and K streets. Those units will cost about $240,000 apiece.

There is a need for that kind of housing, according to a homeless count conducted in January, which found 88 homeless veterans in Merced County. Seventy-six of them are in the city of Merced.

Mark Hamilton, Merced’s housing program supervisor, said the project – including four units, a common area and surrounding infrastructure – ultimately will cost about $6.7 million. The other funding will come from state sources. The city will not pay anything into the project.

According to the city’s staff, the project needed to move forward before the April 20 deadline to guarantee its approval. Hamilton said the city dropped a plan that would allow the units to house 42 homeless veterans because there wasn’t time to ready that project for this round of HUD money.

Murphy said the project needed to stretch the dollars further, and he would support a plan that used the money to house more than the 28 homeless veterans. “The bottom line is we can do more for our veterans,” he said.

A few real estate agents at the meeting said the numbers didn’t seem to add up. Steve Tinetti of Tinetti Realty Group said the high cost for each unit doesn’t make sense.

“From an apartment complex standpoint, you can still buy units in the $50,000 to $60,000 per-unit range,” he said. “If you had an extra $100,000, you could make them more than brand new, so it’d still be about half the price of this.”

Another real estate agent, Phillip May of London Properties, said housing veterans is certainly a noble cause, but the project cost exceeds its value. “Looking at the numbers, really what we need is for this project to be rejected,” he said.

Christina Alley, chief executive officer of Central Valley Coalition for Affordable Housing, said HUD requirements add to the cost of building affordable housing. For example, construction crews must be paid prevailing wages, she said, and the buildings have energy-efficiency requirements that other buildings do not.

“This (project) is pretty standard,” she said. “We are not out of the market.”

The project will use most of the federal allocation HUD gives the city through its HOME Investment Partnerships Program in the next four years. Councilman Noah Lor said the housing is needed. “I understand that we’ll use the majority of the money, but I think it’s worth it,” he said.

City staff members said the housing will be near public transportation, and veterans living at the site will be supplied with bus passes.

The rest of the HUD funding approved Monday, about $115,000, will be used to refurbish a duplex home to be used for victims of domestic abuse. Its location remains a secret to protect the victims.

That home has termite and water damage, according to city staff members. It also needs upgrades to its electrical and water line systems.

This story was originally published April 7, 2015 at 7:49 PM with the headline "Merced approves housing projects for homeless vets, victims of violence."