When California officials decided to expand the state’s university system in the late 1990s by adding a campus in Camarillo, they already knew that the spiraling cost of housing in Southern California would limit their ability to recruit faculty and staff, so they wove 900 units of housing into the building plan.
The university worked with private developer UniDev, LLC, to finance and build 426 rental and 474 for-sale units on the site of the former Camarillo State Mental Hospital, which opened in 2002 as California State University, Channel Islands. The fourth and final phase of housing construction, composed of 242 units, is scheduled to break ground this summer.
The state provided the land for the development, but retains ownership. Apartments are priced at about 10 percent below market rents. Single-family homes are sold at 65 percent of market value, and appreciation is capped at the inflation rate plus any gains in market value from improvements.
Bethesda, Md.-based UniDev, which specializes in workforce housing, managed the planning, design, financing, and implementation of projects for a set fee instead of an ownership interest.
It is one model developers can use to partner with public entities on development projects that use public land. Developers also can structure deals so they retain an ownership or leasehold interest in the property, said Bruce Dorfman, a principal with Thompson Dorfman Urban Residential Development in San Francisco. The firm has developed two rental housing communities for teachers in Northern California.
In Denver, the largest urban infill project in U.S. history is being developed on the former site of Stapleton International Airport. In that public-private collaboration, the municipality declared the area “blighted,” allowing it to issue bonds backed by tax-increment funds, and Forest City Enterprises, the master developer, agreed to buy the nearly 3,000 acres from the city and county over a 15-year period.
By the time it’s built out in 2015, the site is expected to include 4,000 rental and 4,000 for-sale units, plus 13 million square feet of office and retail space. Several hundred affordable apartments will be part of the development, and about 10 percent of the homes will be sold at below-market prices.
“It’s very efficient for for-profit developers to be entering into this ‘nonprofit area,’” said Dorfman. “They’re quicker and more efficient at delivering the housing and can do it at lower price points.”