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Affordable/Workforce Housing Study
Executive Summary


Table of Contents

Executive Summary

Introduction: Defining Affordable and Workforce Housing

Chapter 1: Monterey County Housing "Least Affordable in U.S."   

Chapter 2: FORA’s Original Affordable Housing Goals

Chapter 3: Barriers, Opportunities and Strategies

Chapter 4: Models and Examples

Chapter 5: Federal, State, Local and Private Resources

Chapter 6: Findings and Recommendations


Executive Summary

Monterey County housing was the least affordable in the United States in 2002. Only 40 percent of the people living in Monterey County own their homes. The closure of Fort Ord in 1994 seemed to offer a bright, new opportunity to address the critical workforce housing shortage. In fact, one of the foundations of the Department of Army's no-cost economic development conveyance to The Fort Ord Reuse Authority (FORA) was that jobs would be created and houses would be produced for the people hired for those jobs.

FORA recognized the important relationship of housing to economic development and job creation in 1997 when the Board said in its Reuse Plan, “Residential development will be critical at the former Fort Ord to achieve the employment to generate development capture rates that are projected.”

Progress toward production of new workforce housing has been slow. Barriers to housing development such as complex regulatory procedures and approvals, antiquated infrastructure on the former Fort Ord, and environmental contamination and costly building removal have made the reuse of Fort Ord a particularly difficult challenge for any kind of development, including workforce housing. In order to remove these barriers to the production of workforce housing at Fort Ord, FORA must not only overcome these external forces, but must rethink and renegotiate those constraints imposed upon affordable housing by FORA itself.

The Clark Group recognizes that the professional staff at FORA has put a lot of effort into the redevelopment of the installation and this report does not assume there is any magic formula to solve the problem of affordable housing in the Monterey Peninsula. Any solution will take a disciplined, structured approach, a summoning of political will, and use of all the appropriate financial tools and strategies currently available for affordable housing development.

FORA retained The Clark Group to identify methods, strategies, and resources to increase affordable housing at Fort Ord.

To produce this report The Clark Group:

  • Interviewed a number of Fort Ord Reuse Authority officials and staff, city staff and officials of the US Army, US Army CERL, UCMBest, CSUMB, Clark-Pinnacle and Landwatch
  • Researched federal, state and local government resources.
  • Researched private and foundation resources.
  • Reviewed private and public sector housing studies, documents, reports, abstracts, news stories, letters and proceedings.
  • Talked to federal, state and local housing officials.
  • Reviewed the FORA Base Reuse Plan, Capital Improvement Plan, and Environmental Impact Report.
  • Analyzed information on 280 U.S. housing trust funds and 16 community land trusts.
  • Selected several housing developments and trust funds as potential models for FORA discussion and action.

Based on this research and these interviews, The Clark Group focused its analysis on five main strategies for increasing production of affordable and workforce housing on Fort Ord:

  1. 1) Establishing a housing and community land trust.

  2. 2) Enhancing FORA's internal capacity to address housing needs.

  3. 3) Attracting new funding and applying existing and future funds.

  4. 4) Initiating regulatory changes.

  5. 5) Enlisting legislators in achieving long-term housing goals.

  6. 6) Engaging the U.S. Army in solving the water issue.

The recommendations to carry out these strategies are summarized below. Additional details begin on page 49 of the Report.

The report is divided into seven chapters:

  • Introduction:             Defining Affordable and Workforce Housing
  • Chapter One:          Monterey County Housing “Least Affordable in U.S.”
  • Chapter Two:          FORA's Original Affordable Housing Goals
  • Chapter Three:       Barriers, Opportunities and Strategies
  • Chapter Four:         Models and Case Examples
  • Chapter Five:        Federal, State, Local and Private Resources
  • Chapter Six:             Findings and Recommendations


Finding: California jurisdictions that are producing workforce and affordable housing adequate to their needs devote other resources and revenues to that production besides 20% set aside funds. They, in turn, attract numerous grants, subsidies and loans from a variety of outside sources. Some of the most successful jurisdictions in producing workforce and affordable housing have done so through the creation of housing trust funds to (1) dedicate specific resources to increased housing production; (2) capture subsidies, grants and below market loans available to such non-profits; (3) leverage funds 5-10 times the contributions of participating jurisdiction(s).

Finding: To keep new housing units affordable in the long-term, some jurisdictions have created community land trusts, separate nonprofit corporations that retain ownership of the land on which for-sale affordable housing (and sometimes rental housing) is built, therefore keeping the dwelling appreciation from pricing future owners (or renters) out of affordable units.

Recommendation 1: Create a Housing and Community Land Trust Fund--a hybrid nonprofit corporation based on successful trust fund models and the unusual needs of the FORA jurisdictions--to produce affordable and workforce housing on Fort Ord and elsewhere within FORA jurisdictions. Jurisdictions and local groups and corporations willing to contribute to its success will dedicate a revenue stream, land, services, and/or personnel and constitute its core membership. The first three (or more) years of operation could be focused on production of mixed income housing at Fort Ord; thereafter, the fund's services could be expanded to include all of the Monterey Peninsula.

A formula for local funding of the Housing and Community Land Trust can be devised among the jurisdictions to take into account historical inequities, and allow jurisdictions with land at Fort Ord to dedicate land to the Fund for affordable housing instead of a revenue stream.

Recommendation 2: The Housing and Community Land Trust will need a variety of funding mechanisms and seed capital. The Clark Group recommends that FORA jurisdictions act to create a tax increment pool as one of the most significant funding mechanisms.

Finding: FORA and its jurisdictions are blessed with several experienced nonprofit developers and experts in building and managing affordable housing who are available to assist FORA in developing affordable/workforce housing at Fort Ord.

Recommendation 3: Invite local and regional nonprofit developers to help design the Housing and Community Land Trust Fund. Invite them to help FORA design financial packages, down payment assistance programs, employer assisted housing programs, homeowner information/education programs, and model a nonprofit and for-profit developer partnership to produce mixed income housing. They can also be tapped to provide administration and management of dedicated affordable units, i.e. qualifying potential tenants and administering resale restriction agreements.

  • Local nonprofit developers include: CHISPA, Mid-Peninsula Housing Coalition, South County Housing and the Housing Authority of Monterey County.

  • Regional nonprofit developers include nationally acclaimed BRIDGE, Inc., creator of award-winning mixed-income developments and Ecumenical Association for Housing, who has been instrumental in building workforce and affordable housing in the San Rafael and San Jose areas.

Finding: According to the last FORA Capital Improvement Plan (CIP) available to The Clark Group, the CIP allocates over $76 million dollars to contingency costs, including $30.78 million dollars for “potential sound walls for major streets” and “street landscaping”; $14.40 million for “caretaker cost contingency”; and $30 million for a contingency reserve. The plan also projects net revenue of $13.57 million. These contingencies, reserves and revenues total $89,719,569, nearly one-third of the entire capital improvements plans cost. That figure is the FORA developer fee equivalent of 2,564 units of residential housing.

Housing is, in effect, taxed most heavily to pay for all other improvements, giving landscaping and sound walls, reserves and revenues a higher priority in the CIP than creating the housing that necessitates items such as sound walls.

Recommendation 4: Instead of devoting the entire $89 million (or whatever the current figure is) to contingencies and net reserves, FORA could allocate some funds to forgive, discount or defer developer fees on affordable and workforce housing units. This would require an amendment of the Rate and Method of Apportionment of Special Taxes for the Community Facilities District (CFD), an affirmative vote of two-thirds of the current landowners.


Finding: No FORA or jurisdictional staff with appropriate expertise are focused fulltime on developing and implementing a FORA workforce housing strategic plan. FORA's Affordable Housing Task Force has been given no measurable goals or deliverables, and has not made the task force or any other group responsible for delivering an affordable and workforce housing action plan.

Recommendation 5: Get free professional expertise from the Center for Community Change (CCC) to develop a Housing and Community Land Trust Fund. (Details page 48)

Recommendation 6: Hire a housing coordinator (or acquire a loaned housing executive from one of the jurisdictions' housing or redevelopment authorities) to work for 6-8 months with FORA and CCC to (a) to coordinate solicitation of funds necessary to found the trust fund; (b) organize a workshop (d) file for 501(c)(3) status for the Housing and Community Land Trust Fund.

Recommendation 7: Conduct an independent workshop for Board, staff and interested publics, inviting top nonprofit and for-profit affordable and workforce housing developers, lenders, underwriters and advocates (e.g. Enterprise Foundation, Center for Community Change, BRIDGE, LISC, Santa Clara Housing Trust Fund, Fannie Mae, Bank of America, FHLBSF as well as local housing officials) to help construct an action plan and timetable for overcoming barriers to affordable and workforce housing production at Fort Ord, including the establishment of a Housing and Community Land Trust fund.

These actions are recommended to be undertaken concurrently in order to move beyond discussion to action as quickly as feasible.


Finding: Nearly half ($145 million) of the Base Reuse Capital Improvement Plan revenues/costs are dedicated to transportation infrastructure.

Recommendation 8: Continue to seek transportation funding for FORA-related projects within federal highway appropriations and within the next round of highway funding, currently dubbed “Next-TEA.” Devote any funds awarded to these projects and no longer needed to underwrite transportation infrastructure on or off Fort Ord to forgive developer fees on affordable or workforce housing. Alternatively, place the funds in a Housing and Community Land Trust Fund to support a variety of affordable and workforce housing subsidies and services.

Finding: There are a number of free services which would increase FORA's understanding of affordable and workforce housing finance. Fannie Mae, for example, has a variety of special mortgage products designed to increase affordable and workforce housing. Federal Home Loan Bank, Wells Fargo, Bank of America and other financial institutions also have special programs and products which will boost the effectiveness of a Housing and Community Land Trust Fund. FORA, through its recently received credit enhancement grant, can initiate these steps in a logical follow-up to its previous work.

Recommendation 9: As current escrow funds from the previous grant become available, they should be reprogrammed for work with Fannie Mae, especially the Local Partnership Office, and other financial institutions (listed in the Resources section) to create partnerships between local or regional lenders and FORA to increase subsidies and decrease financial constraints to expanding affordable homeownership on Fort Ord.

Finding: The former Fort Ord made the Superfund list in 1990. Cleanup will include extracting and treating contaminated groundwater and capping the landfills to limit future infiltration and minimize additional leaching. Forty-one sites have been identified as potentially hazardous sites.

Recommendation 10: Working in coordination with the Environmental Protection Agency (EPA) and the State of California Department of Toxic Substances Control (DTSC), invite self-insured brownfield redevelopment companies with nationally recognized decontamination expertise to re-evaluate properties currently believed irremediable for housing and retail development at Fort Ord. In addition (not in lieu of) increasing production of workforce housing on clean property, work with the EPA, DTSC and the Army to transfer land that can be privately remediated by such companies, selling contaminated land at an appropriate discount, with stipulations for production of mixed income housing.

Finding: FORA has a grant to research innovative environmental remediation measures and with FORA's support, the U.S. Army Corps of Engineers Construction Engineering Research Lab (CERL), CSUMB and others are engaged in developing technologies and finding processes to reduce the costs of FORA building deconstruction and to prevent long-term environmental impacts from demolition. The potential exists at Fort Ord—and many other active and retired DOD facilities--for creating a public/private deconstruction program more cost-efficient than demolition, a program that could become a national model and provide an income center, local jobs and training programs. FORA has not factored in the full cost of disposing of these materials (such as landfill and opportunity costs)

There also exists the potential that millions of dollars can be saved through building deconstruction by companies and/or nonprofits. The materials that are salvaged can be reused or sold, the donated labor becoming “sweat-equity,” credited towards home ownership and relieving jurisdictions of some of the financial burden of building removal. Deconstruction also offers a better long term solution for the environment.

Recommendation 11: (a) Develop and implement a policy to support federal and local pilot programs in deconstruction and recycling; (b) Raise the goal for recycling in building removal activities to 50 percent; (c) Support the creation of a building materials resale store on the former Ft Ord.

Finding: The state's recent passage of Proposition 46 offers FORA the opportunity to solicit funds from the new Local Housing Trust Funds program and other new programs.

Recommendation 12: Take full advantage of the provisions of Proposition 46—The Housing and Emergency Shelter Trust Fund Act of 2002. Programs of note:

  • Multifamily Housing development, $800 million annually, Notice of Funding Availability (NOFA) January, 2003, non-profit and for-profit developers and public agencies eligible for new construction, rehab and preservation of rental housing for low income households.

  • Local Housing Trust Funds, $25 million in grant funds, NOFA 07/03, non-profits and public agencies are eligible applicants. If a public agency is the applicant, grant is conditional on housing element approval.

  • Details on page 54 of the report
Finding: The state has a significant home purchase assistance pilot program to assist first-time homebuyers in high cost areas in California. The Monterey Peninsula area was the highest housing cost area in the state in 2002 but it is not included in High Cost Area Home Purchase Assistance Pilot Program (HiCAP). Currently eligible counties in the program are: San Francisco, San Mateo, Santa Clara, Alameda, Contra Costa and Sonoma.

Recommendation 13: Advocate state government inclusion of Monterey County in any extension of the HiCAP pilot program.

Finding: The housing crisis in Monterey County is a regional problem requiring a regional solution. The jurisdictions that currently have the most very low and low income housing and do not need to create more to achieve a jobs/housing balance (Marina, Seaside) are the cities that will be responsible, along with the County, for creating most of the housing on Fort Ord. If Marina and Seaside are expected to create more affordable housing (moderate, low and very low income) at Fort Ord, all FORA jurisdictions who need affordable housing should share in the costs as well as the benefits of producing that housing on Fort Ord.

Recommendation 14: Following Fair Housing Act guidelines, (1) expand and instigate Employer Assisted Housing programs for teachers, university employees, and city and county public safety employees (in all FORA jurisdictions) through the Housing and Community Land Trust Fund. (2) Use the availability of employer-assisted workforce housing programs in recruitment of business and industry to Fort Ord. (3) Use recruitment in Employer Assisted Housing programs as the backbone of the first workforce housing development on the former Fort Ord. Housing Trust Fund Employer Assisted programs could be used by the jurisdictions to offer 1) preference in Fort Ord affordable housing or 2) housing subsidies inside their jurisdictions


Finding: Monterey County, in its East Garrison option announcement, gives its developer the flexibility to reduce developer fees on affordable units (increasing fees for above-market units as a cross subsidy). This is the most straightforward way to increase affordable housing in developments at Fort Ord given current redevelopment cost-recapture policies and is an available option for all landowner jurisdictions.

Recommendation 15: FORA jurisdictions planning mixed income housing should develop a flexible development fee structure based on the goals and strategies for the redevelopment of Fort Ord.


Finding: Some of the regulatory hurdles that FORA faces can be overcome by enabling legislation. Workforce housing challenges at Fort Ord are understood by its legislators, who are willing to help either by seeking funding or relaxing barriers. Two in your Congressional delegation sit on committees that directly affect appropriations and the reuse of military installations.

Recommendation 16: FORA should develop a long term legislative strategy and work closely with the California legislature and the Congressional delegation to seek funds, relax barriers and acquire the water needed to produce more workforce housing.


Finding: The U.S. Army has retained 1691 acre feet per year (AFY) of water at the former Fort Ord, even though its maximum foreseeable need for water is only 600 AFY. Each 100 AFY represents 400 potential units of workforce housing.

Recommendation 17: The Army should relinquish 400-500 AFY of its retained water for workforce housing at Fort Ord, which will leave the Army with 591-691 more acre feet per year than they are ever likely to need.

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