The Sobrato Organization, a major developer in Silicon Valley, wants to help solve the affordable housing problem.
The Mountain View-based company launched a plan to combine its real estate, capital investment and philanthropic arms to keep residents in their homes, San Jose Mercury News reports.
Last month, its Sobrato Family Foundation paid 68-unit Vista Pointe condominium worth $26.1 million At 3455 Homestead Road in Santa Clara. These apartments were built in the 1960s.
John Sobrato, the company’s chairman, said buying apartment buildings has now become the basis for a pilot program to help address local housing woes. Sobrato aims to keep rents low to keep its units affordable.
“We call it the Housing Security Initiative,” Sobrato told Mercury News. “The key to economic mobility is stable affordable housing for low- and middle-income people. This is key to building self-sufficiency and moving up the economic ladder.”
The problem, Sobrato said, is affordability, with rising costs driving up home prices across Silicon Valley, and rents far outpacing growth in median incomes. As households spend more on rent, they have less money to spend on food and transportation.
The company aims to address the affordable housing problem by building more homes, preserving existing affordable housing and advocating for the development of more. It can also help fund affordable housing programs.
“We need all types of housing in Silicon Valley because if there isn’t enough housing, including market-rate housing, then that shortage puts pressure on affordable housing,” Sobrato told the paper. “We can help build housing, including affordable housing.”
Its new complex in Santa Clara is part of its conservation initiative.
Older condos, such as Vista Pointe, built in 1969, often sell with major upgrades, mostly to justify the big rent increases. But the Sobrato organization will only make the improvements necessary to keep rents modest.
“We’re going to fix the maintenance,” Sobrato said. “People can rest assured that no low-income families in Vista Pointe will be displaced.”
Sobrato Organization has developed nearly 21.5 million square feet of office, R&D and multifamily real estate. Its portfolio includes 7.5 million square feet of office and research and development buildings, as well as 30 apartment complexes in the Bay Area, according to its website.
— Dana Bartholomew
