While affordable housing has been produced through a variety of public private partnerships (PPPs) for many decades such ventures are garnering new and increasing attention by local governments sideswiped by the Great Recession.
To say that the Riverside-San Bernardino economy has been battered by the collapse of the sub-prime housing bubble would be a gross understatement.
The region has lost almost 90,000 jobs over the past 12 months and currently has the dubious distinction of having the second- highest unemployment rate (13.7%) among the 50 largest metro areas in the U.S. Nowhere are the spoils of the Great Recession more evident than in communities like San Bernardino’s long-neglected Westside where stability of the housing market and surrounding infrastructure is of grave concern.
So when San Bernardino County Supervisor Josie Gonzales, Mayor Patrick Morris, 6th Ward Councilmember Rikke Van Johnson, along with a host of city officials and dignitaries, walked across a muddy construction site during a November ground breaking ceremony for The Magnolia at Highland Project it was a testament to the joint efforts of a PPP.
Infrastructure is a serious investment with a sizeable price tag. City officials are increasingly looking to accomplish their project goals with a private sector partner.
Public-private partnerships (PPPs), often used interchangeably with privatization, are not revolutionary; they have been used in the United States long before it declared independence. They have, however, revolutionized the provision of public infrastructure-based services since the 1980s. Today, the average American city works with private partners to perform 23 out of 65 basic municipal services.
Thanks to a multi-prong (PPP), the $17.5 million Magnolia at Highland project transforms a blighted automotive site into 80 units of high quality, affordable housing for seniors, retains a one-acre parcel of land for future sale or development opportunities, and creates a future stream of income that can be used for future developments including senior or single-family housing.
Located on the South West corner of Highland and Medical Center Drive, the project is declared to be a milestone for the City of San Bernardino and was the result of a study conducted in 2008 that revealed the city was approximately 1,000 units below what is needed for an aging population in the form of affordable senior housing.
Carrying a total development cost of $19 million, the San Bernardino Economic Development Agency partnered with Optimus Construction, Inc. , Wells Fargo Bank, Chase, California Community Reinvestment Corporation, Western Community Housing Management and Meta Housing to reach their goal.
This partnership showcases San Bernardino’s commitment to connecting cutting-edge companies to our citywide revitalization goals, said Johnson, who represents the city’s 6th Ward.
“We don’t have the funds to bankroll major infrastructure projects, yet there’s a bottom line,” he said. “We can’t afford not to address our aging infrastructure. Public private partnerships like Magnolia at Highland provide a chance for important revitalization projects like the Westside commercial corridor to finally bloom.”
“This was the easiest city we ever worked with,” said John Huskey of Meta Housing, Inc. “The work we do in partnership with local governments exemplifies the true value of redevelopment, as we provide safe and affordable quality housing for people who need it most.”
Johnson identified a number of areas that could utilize PPPs for longterm job growth. He says “while the recession is diminishing the municipal pocketbook, it is also lowering building and equipment costs, making large-scale infrastructure projects more cost-effective.”
“Not only does investing in infrastructure provide for better bridges, buildings, subsidized housing and services, but it creates much-needed jobs. In fact, infrastructure expenditures have the highest rate of return on employment numbers: for every $1 billion in infrastructure spending, an estimated 18,000 jobs are created.”
Johnson cited the need for more enterprise zones and tax incentives to keep businesses from leaving California, and he stressed collaboration among government entities. He said local municipalities, particularly small cities, should not have to feel that they are competing against larger cities to attract businesses to generate jobs and tax revenue.
By Chris Levister