March 16, 2022

San Luis Ranch holds first ‘affordable home’ lottery drawings

The long-anticipated arrival of affordable homes as part of the incoming San Luis Ranch development project has arrived. A lottery drawing was held Tuesday in which San Luis Obispo Mayor Erica Stewart selected the first prospective buyer of an affordable, deed-restricted house built by Coastal Community Builders. (San Luis Obispo mayor Erica Stewart, left, picked names in a lottery for a San Luis Ranch house that will be sold at below market value. Kayla Hanks, sales manager with Legacy Homes, is at right.)

The term “affordable home” under SLO city standards means that a home is restricted based on price for rent or sale to those ranging from very low to moderate incomes. Priority at San Luis Ranch will be given to the local workforce. The name of Tuesday’s winner wasn’t announced due to privacy laws and pending processing of qualification for purchase, according to project coordinators.

“It will be up to the buyer to announce (their new affordable home purchase),” said Josh Bivin, chief financial officer for San Luis Ranch working with the Minnesota-based company, Merced. “If they want to do it, they can do interviews or do whatever they want. We’ll present them with the opportunity.”

Thirty pre-qualified applicants were eligible for Tuesday’s drawing for a 1,339 three-bedroom, two-bathroom home under the city program that applies to those in the “moderate-income” category.

Under the city’s 2021 affordable housing guidelines, a household of four earning $117,350 would qualify to buy a three-bedroom home for $427,175 in the moderate-income category. That compares to market-rate pricing for similar homes in the high $700,000s, according to project coordinators.

“The market rate is probably about double of what it would cost under the affordable housing program,” development representative Jim LaLoggia said.

SLO MAYOR ‘EXCITED FOR THIS OPPORTUNITY
On Tuesday, Stewart picked three names, concealed in envelopes, out of a bowl for the applicant lotto. One individual household will be awarded the right to proceed through the purchase process after further vetting of the qualifications and finances, with priority given in order of the names drawn in case the processing falls through due to lack of qualification or otherwise.

Those who weren’t selected this time will have their names re-submitted for future drawings in coming months. Stewart was on hand to celebrate the addition of new affordable homes at the project site near Madonna Road and Oceanaire Drive, as the council moves forward with an ongoing review of its city policy toward expanding its Inclusionary Housing Ordinance.

“This is a chance to be able to bring more housing for people who are living here and working here,” Stewart said. “We’re looking at very-low-income, low-income and moderate-income housing and really excited to expand the opportunities.”
Steward added: “We’ve been working with San Luis Ranch for a long time, and we’re looking at mixed-use development, so this is rental housing, purchased housing and commercial, all-electric, and we’re really excited for this opportunity.”

HOW MANY AFFORDABLE UNITS WILL THERE BE?
San Luis Ranch is approved to build 577 homes as part of its mixed-use plan, which also includes future commercial and hotel plans. Those will be built over the next couple of years in phases.

While most of the homes are market-rate housing, San Luis Obispo’s affordable housing program requires that a certain number are set aside with price caps based on income under the city’s affordable housing standards.

The total number of affordable units required at the site, according to Housing Policy and Programs Interim Manager Teresa McClish, are the following:
• Workforce (those qualifying may make 121% to 160% of average median income): 14 units
• Moderate-income units (25% to 100% of median income): eight total for homeownership
• Low-income units (30% to 60% of median): eight total for ownership
• Very-low-income units (30% to 50% of median): 52 for rentals.
• Income levels and pricing of homes are described on SLO’s “Affordable Housing Standards” site.
• The total number of affordable units required on-site is 68, with the possibility of up to 77 total units that could be built on the property (workforce housing isn’t considered affordable but falls within income limit guidelines).

HOW SAN LUIS RANCH AFFORDABLE HOUSING WORKS
Dozens of market-rate homes are under construction on-site, with about 35 households currently occupying their new homes.
Affordable housing will be added in phases as portions of the project go in. Future drawings will be held and anyone who pre-qualifies is eligible for the next round of drawings. “We have an affordable agreement for the single-family units that require affordable houses to be occupied after so many of the market rates homes are built,” Bivin said.

Bivin said the next drawing that Coastal Community Builders will hold is about six to seven months out because it takes eight to nine months to build homes due to supply chain delays — and the drawings are typically done two to three months in advance of construction completion. “We don’t do the drawings too much in advance because lock-in (interest) rates might expire,” Bivin said. “They qualify now, then right before they close, they have to qualify again. So, we have to time the drawings fairly close to the house being finished with construction.”  For more information, go to sanluisranch.com.

WILLIAMS HOMES AFFORDABLE UNITS
Williams Homes, the other builder on-site, has held third-party drawings to draw names for two affordable single-family three-bedroom homes thus far, said Christina Hamill, a company Central Coast Division Sales Manager.

Drawings for two workforce units also already were held for the project’s Fig neighborhood site.

Williams will have future drawings for two low-income and two workforce single-family homes (ranging from 1,564 square feet to 1,610 square feet) in its Heirloom neighborhood. A "loft" drawing will be held for sales of six workforce units as part of its Harvest Loft neighborhood units. Those are studios that are 407 square feet.
An email to the public will announce future drawings, Hamill said.

“A lot of people are interested in the affordable ones, but then you have to weed through those who actually do qualify based on the parameters set forth,” Hamill said. “So it narrows down your list quite a bit when you do that.” Williams is advertising market-rate homes starting at $645,745 on its website, which also has a link to schedule an appointment for information on affordable or market-rate sales.

Nick Wilson: 805-781-7922, @NickWilsonTrib