City narrows in on affordable housing deal

NeighborWorks Sacramento crew, which is working to secure millions in funding to develop an affordable housing subdivision in Winters, raises a wall to an affordable housing unit the group sponsored through the program, which was founded in 1987. (NeighborWorks/Courtesy photo)

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Lower-income and households of color face unrelenting housing price pressures.  

As pandemic financial stresses persist and home price growth hits record highs, the State of the Nation’s Housing 2022 fact reveals just how critical affordable housing is in the U.S. The City of Winters recognizes the vital role local governments play in the supply and affordability of housing, which is why they passed a resolution to execute an exclusive negotiation agreement with NeighborWorks Sacramento for 24 “self-help” housing units. 

According to the resolution staff report, affordable housing is difficult to achieve in a state where housing costs are as high as they are in California. Winter’s Affordable Housing Steering Committee is attempting to ease the burden by working with non-profit affordable housing developer NeighborWorks Sacramento for a million-dollar Winters Highlands Subdivision equaling $7,488,000. 

“Homeownership is not easy because there are very few affordable homes in both rural and urban communities,” Frank Pasquale. NeighborWorks construction manager, said. 

This is not the first time Winters and NeighborWorks Sacramento have drawn a contract. Exclusive negotiation and disposition development agreements were drawn up in January 2020 and extended to August. After that expired, the council approved another proposal in June 2021. 

“In addition, staff has met and talked with NeighborWorks representatives on multiple occasions regarding the possibility of a “self-help” detached unit housing project, which would be targeted at “moderate” income level households in the Winters area,” according to the staff report.  

The deal is back on the table with a new term sheet. It now includes donating the land to NeighborWorks rather than selling under the condition that the nonprofit developer pay all related city fees. Additionally, there is now a 30-year deed restriction for the property rather than the 15-year term outlined in the municipal code.

The deal had to be approved by the United States Department of Agriculture (USDA), the financing entity for self-help homes program designed to help place lower-income families into ownership positions in small, rural areas. 

“The USDA focuses on working in smaller communities such as Winters to empower them to move into home ownership,” Pasquale said, adding that while Winters 2022 median family income is about $112,000 per year, the average family income is $49,000. “These lower-income families cannot afford the average market rate house of about $425,000.”

Targeting these first-time homeowners in the financial bracket is what it’s all about, said Pasquale, who noted about 40 percent of the people in Winters do not own their homes. 

“This, coupled with the fact that the poverty rate in Winters is 9 percent, calls for building affordable homes,” he said.” But, most importantly, the Winters City Council is very progressive and wants to add more affordable housing choices for its residents.”

Some Winters families can qualify for USDA loans based on the stable population and growth rate of about 1.38 percent since 2020, which is why the USDA is choosing to invest in the Winters community, according to Pasquale. 

“The average rental goes for $1,600 in Winters, and our participants can own the home for that monthly rate by putting in a little sweat equity,” Pasquale said.

NeighborWorks is close to securing several million in funds to develop the subdivision.

“The USDA has already expressed its excitement about supporting the $8 million investment,” Pasquale said. “The City Council and NeighborWorks must now work together to complete the lengthy USDA application process to get the funding for the Winters Project to go into our next funding cycle.”

If all goes as planned, the Winters Highland subdivision will see 24 new homes within two years. Meanwhile, NeighborWorks is finishing up 20 homes in Williams and 17 homes in the City of Arbuckle.

Pasquale encourages eligible Winters residents to visit and sign up for the Winters Project waiting list. 

“We will select 24 families from that list who meet the USDA eligibility requirements to become the new homeowners,” he said.

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