When 66-year-old Clovis resident Deborah Cortes received notice that her rent would soon double, she made the decision to sell all of her belongings and move into her Nissan Versa Note.
She said it made more financial sense to keep up with her car payments than to continue to pay rent at an apartment that she would inevitably be priced out of.
“I know my finances; I knew I wouldn’t have made it,” Cortes said. “It’s terrible; it’s very terrible.”
Cortes, who lives off about $2,000 a month, said she fell behind on one month’s rent due to a parking ticket. She moved out July 30, roughly two months after receiving notice that her rent would soon jump from the restricted rate of $591 to the market rate, which she was told was about $1,295, not including utilities.
“I’m living day by day,” said Cortes, who bounces between Clovis and the Bay Area, sleeping in friends’ driveways and at Walmart parking lots.
Now, other tenants at the Sierra Ridge apartment complex in Clovis are fearing the same fate. As many as 36 households at Sierra Ridge are at risk of being priced out of their homes as the apartment complex’s contract to maintain affordable housing units comes to an end.
Tenants living in rent-restricted affordable housing units at Sierra Ridge apartment complex owned by Golden State Financial (GSF) Sierra Ridge Clovis Investors were told in late April that their units would soon become market rate — doubling the price in some instances from $591 to $1,295 for a one-bedroom or from $699 to around $1,400 for a two-bedroom.
One resident’s daughter, Cheryl Silveira, said her mother June Horton, 82, has lived at the apartment complex for 26 years and is “horrified” that she will be displaced, but “doesn’t get the full scheme of it.”
“Ethically, what they are doing is criminal,” Silveira said.
Legally, however, the property owners are allowed to convert the units to market rate so long as they follow specific rules during the transition period.
GSF Properties did not return several requests for comment made via phone call.
Elderly tenants fear they will have nowhere to go
Silveira, who is her mother’s caregiver, said Horton’s rent is expected to jump from $591 to around $1,295, excluding utilities, according to a notice her mother received about three months ago. It was the same notice that Cortes received.
“I don’t get it under normal circumstances,” Silveira said of the return to market rate. “ I especially don’t get it during COVID-19.”
Silveira said she lives in a two-story house that her mother would not be able to navigate and is on a fixed income herself. She and her sister are struggling to put together a plan for their mother.
“We’re in an impossible situation,” Silveira said. “It’s like throwing a life preserver to somebody, and then you’re going to drown.”
Eloy Cardenas, Horton’s next-door neighbor, said he was told by management that the rent for his two-bedroom apartment would rise from $699 to around $1,400 a month in January 2022.
Cardenas, 67, has lived at Sierra Ridge for two years after waiting one year for a unit to open up at the apartment complex. He shares the two-bedroom apartment with his aunt who has moved into a family member’s house since she learned of the upcoming rent increase.
His daughter, Holly Cardenas, a Fresno State student, said she is worried for her father, but she lives in a market rate one-bedroom that does not have the space for him to move in with her. She has called a handful of affordable housing apartments in Clovis and Fresno and placed her father on waitlists wherever they are open, but with only 583 affordable housing units in Clovis and a shortfall of 36,000 affordable housing units in Fresno, she knows that finding a low-cost unit for her father before the deadline is not realistic.
“Clovis is short on affordable housing units,” Holly Cardenas said. “Village on Shaw no longer has a waitlist, and others have a three- to five-year waitlist. Some even have a seven- to 10-year waitlist.”
Cardenas said he is not sure what he will do when his rent is raised.
Other tenants who rely on Section 8 housing vouchers, but do not reside in rent-restricted apartments, said they have had recent rent increases and also are fearful of being eventually priced out.
“They don’t want low-income (tenants) here anymore,” said James Evans, who lives across the way from Cardenas and Horton.
Evans is paraplegic and has lived at the complex for 16 years. His friend Michelle Toler, who lives on the other end of the apartment complex and also relies on Section 8 vouchers, said her rent recently increased by $300.
Toler said if the rent increases again, she will be homeless.
“I don’t think there is anywhere to go; my neighbor upstairs sold everything and moved into her car,” Toler added, referring to Cortes.
How affordable housing units can be converted to market rate
Despite the Tenant Protection Act of 2019 — which prohibits landlords from increasing rent more than 10% annually in California — units that were rent-restricted through the low-income housing tax credit program can be raised to market rate once the contract between developers and the state has ended.
The low-income affordable tax credit program has helped create and preserve affordable homes in California and is the biggest driver for new affordable housing developments; but as is the case with Sierra Ridge, when the affordable housing contracts expire, there is no guarantee that the owners will choose to keep them affordable.
Sierra Ridge, which has more than 180 units, received low-income tax credits in 1990 with the stipulation that 36 of the units be rent restricted from 1990 to January 2021, according to the California Department of Housing and Community Development (HCD) as well as a notice tenants received from Sierra Ridge management.
As of January 2021, the developer’s contractual agreement was complete.
Now the property owners are in a transitional period to convert the 36 units to full price, effectively displacing tenants like Cortes, Cardenas and Horton who live with fixed incomes. The Bee could not confirm whether all 36 rent-restricted units were currently occupied.
According to Matt Schwartz, the president and CEO of the California Housing Partnership, converting affordable housing back to market rate “is not very common” in California. However, a 2017 California Housing Partnership analysis of low-income housing tax credit developments found that it is more common if the properties are not owned by a large, stable nonprofit or mission-driven developer and if the property doesn’t have overlapping funding that extends affordability.
The 2017 study identified nine developments (274 affordable homes) in the Central Valley which were at risk of conversion.
“There’s no strong mechanism at the statewide level to renew those contracts,” said Andrew Haussler, the Clovis Community and Economic Development director.
“Those developers have the opportunity to either refinance those and be done with the affordability covenants or seek funding for more affordability,” Haussler said. “But these projects cost in the neighborhood of $20 million and $40 million, and the level of subsidy needed to make it affordable is significant.”
While it is within the property owner’s legal right to convert the units to market rate once the agreement expires, there are certain regulations during the transition process that must be followed, according to the HCD.
Sierra Ridge property owners must give tenants a 12-month notice and then a six-month notice that rent restrictions will expire. All notices to tenants and public agencies affected must be made by first-class mail, according to the state preservation notice requirements.
The property owners must also issue a Notice of Opportunity to Submit an Offer to Purchase, which would allow nonprofits and other entities the chance to buy the building and keep the units affordable. Even if GSF Properties does not intend to sell the property, they must give others the opportunity to make a bid, according to the HCD. If they reject any offers made, then they must commit to not selling the property for at least five years.
So far, tenants said they have received only one notice that was posted to their door in late April, not via mail. Beyond being told their rent would increase, tenants also said they’ve been left in the dark about when exactly that change will occur and where else they could move.
Holly Cardenas said she contacted The Bee upon realizing that many tenants impacted by this rent hike were elderly, some without families.
“The thing is,” she said, “a majority of the residents don’t know the gravity of this.”
The Bee submitted a public records request with Fresno County on Friday to determine whether any bids for the property have been made or rejected.
The HCD said if regulations are not followed, tenants have “legal footing to enforce their rights under the law.” GSF Properties did not return several requests for comment.
Could this have been prevented?
In the city of Clovis, affordable housing is difficult to come by, so much so that the city is currently in the midst of a lawsuit for not meeting affordable housing zoning requirements based on the Regional Housing Needs Assessment. Haussler said a “financing gap” and lack of state resources has made it challenging to bring new affordable housing units to the city.
According to Haussler, in Clovis, there are 582 multifamily affordable housing units, but “there are waiting lists for almost all of those, and there is a lack of supply; there’s incredible demand throughout the region.”
“We have a lot more (affordable housing) to replace those 36 underway, but it doesn’t mean it is matching up with these residents in particular,” Haussler said.
Haussler said he reached out to Sierra Ridge management and was told that they are meeting their contractual agreements with the state. Haussler also said Clovis tracks when contracts are set to expire — the next complex is set to expire in 2053.
According to the California Housing Partnership, there are several ways local jurisdictions can take part in preserving affordable housing that is at risk of conversion — including, tracking contracts in the area, identifying potential buyers, providing tenants with legal services, setting up local housing trust funds to purchase properties or requiring owners to provide relocation assistance. However, Haussler said Clovis’ limited housing funds has narrowed what the city can do at this point.
“It’s almost easier to build new projects,” Haussler said. “It’s been a challenge, and it’s unfortunate.”
Haussler said tenants at Sierra Ridge who have reached out to the city have been directed to other affordable housing complexes in the area.
While the city said they aren’t able to step in directly, Silveira said Sierra Ridge’s property management company could have.
GSF Properties, which owns and manages Sierra Ridge, also manages Solivita Commons, a new 60-unit affordable housing complex owned by Fresno Housing Authority in Clovis.
A lottery for Solivita Commons was opened to the public from March 22 to April 5, prior to Sierra Ridge tenants receiving a notice dated April 28 that stated the affordable housing program at their complex was ending. Several tenants said they received the notice in May.
“They put it up to the public in a lottery before they would offer it to their own residents who they knew they were displacing,” Silveira said.
Fresno Housing communications manager Brandi Johnson said the housing authority does not track expiring low-income housing tax credit contracts throughout the county and does not have affiliation with Sierra Ridge, despite the property management company overlapping.
Silveira said her mother and other Sierra Ridge tenants would not be in the situation they are in now if they had been given priority to apply to Solivita Commons, or even notice that their rent would increase prior to the application window for Solivita Commons closing.
There is currently no availability at Solivita Commons, Johnson said.
Haussler said he did not know why GSF did not prioritize displaced Sierra Ridge tenants for units in Solivita Commons. GSF Properties did not respond to multiple requests for comments.
“Everybody is standing by and saying, ‘Yeah, go ahead and kick these senior citizens out,’” Cardenas said. “Somebody needs to step up and get something corrected.”
The Fresno Bee will be following the stories of tenants who are facing potential displacement through the process.