Sobrato buys aging apartment complex in Santa Clara to keep rents low
Developer launches initiative to address affordability in Silicon Valley
The Sobrato Organization, a major developer in Silicon Valley, wants to help solve the affordable housing problem.
The Mountain View-based firm has launched an initiative to combine its real estate, capital investments and charity arm to keep residents in their homes, the San Jose Mercury reported.
Last month, its Sobrato Family Foundation paid $26.1 million for the 68-unit Vista Pointe Apartments at 3455 Homestead Road in Santa Clara. The apartments were built in the 1960s.
The apartment building purchase has now become the basis for a pilot project to help solve the local housing dilemma, John Sobrato, chairman of the company, said. Sobrato aims to keep the rents low, preserving its units as affordable.
“We call it the Housing Security Initiative,” Sobrato told the Mercury News. “The key to economic mobility is stable affordable housing for people at low- and moderate-income levels. That is the key to building self-sufficiency and moving up the economic ladder.”
The issue is affordability, with increased costs leading to higher housing prices across Silicon Valley, with rents far outpacing the growth in median income, Sobrato said. As families spend more on rent, they have less money for food and transportation.
The company aims to address affordable housing by building more homes, preserving existing affordable housing and advocating for more to be developed. It can also help fund affordable housing projects.
“We need all types of housing in Silicon Valley, because if there’s not enough of that, including market-rate housing, then that shortage puts pressure on affordable housing,” Sobrato told the newspaper. “We can help with housing production, including building affordable homes.”
Its new complex in Santa Clara falls into its initiative for preservation.
Older apartments such as Vista Pointe, built in 1969, generally undergo major upgrades following a sale, primarily to justify a hefty hike in rents. But the Sobrato Organization will undertake only essential improvements in order to keep rents moderate.
“We will address maintenance issues,” Sobrato said. “People can rest assured that none of the low-income families at Vista Pointe are going to be displaced.”
The Sobrato Organization has developed nearly 21.5 million square feet of office, R&D and multifamily real estate. Its portfolio contains 7.5 million square feet of office and R&D buildings, plus 30 apartment complexes in the Bay Area, according to its website.
— Dana Bartholomew