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10 Summerfield Homes and Montevista Apartments Using a combination of financial tools,several public,non- profit,and private partners collaborated to produce 184 units of mixed-income rental and for-sale housing in the city of Milpitas,California,outside of San Jose in the competitive Silicon Valley housing market. The city of Milpitas chose the BRIDGEHousing Corporation,a Bay Area nonprofit housing developer,to acquire the land,arrange for financing,and build and manage the project. As a nonprofit developer, BRIDGEwas able to negotiate a lower price for the county- owned land––which was particularly crucial,as the high cost of land is one of the biggest hurdles to overcome in producing affordable housing in Silicon Valley. To develop the Summerfield subdivision of 114 single-family homes— 20 percent of which were below the market rate—BRIDGE partnered with the for-profit developer DKB Homes,LLC,in a profit-sharing agreement. DKB purchased the Summerfield site from BRIDGE,managed Summerfield’s public outreach efforts,and led the process to select the buyers of the assist- ed homes. To develop the adjacent Montevista Apartments, BRIDGEreceived a $3 million redevelopment loan as well as federal community development block grant (CDBG) and HOME funds from the city and county. Permanent project financing used tax-exempt bonds from the California Hous- ing Finance Agency and the sale of 4 percent tax credits to John Hancock. The completed apartment complex includes a pool,a cabana,play areas,a community building,and fit- ness facilities.21 Profile F or-profit developers can bring market savvy to the devel- opment of high-quality, mixed-income housing. Working independently or in partnership with a nonprofit or pub- lic agency, for-profit developers can produce mixed-income housing in a variety of forms and types. Master-planned communities that include a mix of housing types and price points provide greater affordability simply by offering a product at the lower end of the price scale. Knowledgeable developers realize that offering an assortment of housing types at a range of price points reduces the overall risk of the project and can help increase absorption rates. The mix of housing prod- ucts widens the scope of the target market and allows develop- ments to respond more flexibly to changing market conditions. For-profit developers also develop mixed-income housing with the help of a variety of federal, state, and local housing finance programs, incentives, or regulatory initiatives that support the development of affordably priced units. For example, the feder- al low-income housing tax credit encourages the development of affordable rental housing, while localities often offer develop- ers density bonuses as part of an inclusionary zoning program. An increasing number of for-profit developers are partnering with public agencies and/or nonprofit development organiza- tions to build mixed-income communities that combine market- rate and publicly assisted units. Many public/private partner- ships were established under the federal HOPE VI program (Housing Opportunities for People Everywhere) administered by the U.S. Department of Housing and Urban Development (HUD). Established by Congress in 1992 to improve the nation’s most severely distressed public housing, HOPE VI encouraged public housing authorities to collaborate with private developers to build new, mixed-income neighborhoods. Approximately 49 different private development firms varying in size, specialization, and experience—including some of the nation’s foremost devel- Myth #3 Only nonprofit developers and public housing authorities build mixed-income housing. Fact #3 For-profit developers produce mixed-income housing in many forms. To build the 114 for-sale Summerfield homes, for-profit developer DKB Homes purchased the site from the nonprofit BRIDGEHousing Corporation, managed public outreach efforts, and led the selection process for the buyers of the assisted homes. PH O T O C O U R T E S Y O F D K B H O M E S , L L C