From the Marin IJ: Marin worker housing plan faces budget shortfall
This article, written by Richard Halstead, was published by the Marin Independent Journal on February 17, 2025
An effort to build housing for educators and county workers in Marin has a $17.4 million budget shortfall.
A plan has been floated to close the gap by having the county and school districts guarantee the rental income of the apartments in order to lower the interest rates on bonds to finance the project.
The project, known as the Village at Oak Hill, would involve 135 apartments on a site adjacent to San Quentin prison. They would priced to be affordable to households earning between 50% and 80% of the area median income.
A household of three earning $88,150 per year in Marin is at 50% of area median income, while a household of three earning $141,000 a year is at 80%.
The bond guarantor program has been proposed by the Marin County Public Financing Authority, which was created by county supervisors and the Marin County of Office of Education in 2023 to finance and manage the Oak Hill project.
In January, county supervisors approved a $108,000 loan to the authority to cover executive management, administrative and fiscal services for the project. Not counting that loan, the county has contributed more than $4.57 million to the project, which has an estimated cost of more than $118 million.
“It’s hard to imagine we can have the project go forward without this,” said Matthew Hymel, the authority’s director and a former county executive. “This project was conceived five years ago when interest rates were at a historic low. Now rates are much higher.”
Hymel said it is estimated that the lower interest rates on the bonds made possible by the guarantor program would increase revenue from the bond offering from $85 million to $94 million.
The guarantor program also would save another $1 million because the size of a required bond reserve would be reduced.
Two members of the Coalition of Sensible Taxpayers, a fiscal watchdog group, attended a meeting of the joint power authority’s directors on Feb. 6 to voice their concerns about the proposal.
“You can’t use taxpayer money to guarantee that those units are going to be filled and shift all that risk away from the bond holders,” said Mary Stompe, retired director of PEP Housing. “It’s not fiscally responsible for the county.”
“If you can’t balance your budget, you don’t have a viable project,” Stompe said. “When I didn’t have a balanced budget, I couldn’t move forward.”
Mimi Willard, president of the Coalition of Sensible Taxpayers, said “the lack of interest by the usual investors is a red flag.”
“It demonstrates skepticism about the financial projections, including but not limited to the rental income over the 30- to 35-year period,” she said.
Stompe and Willard also questioned the size of the $5.9 million fee that is slated to be paid to the project’s developer, Education Housing Partners.