With the blessing of the Grover Beach City Council/Improvement Agency, a four-unit affordable housing project at 506 Longbranch Ave. will be built by Habitat for Humanity of San Luis Obispo County.

Habitat for Humanity was chosen Monday over private developer Bischoff Properties Inc. of Grover Beach to develop the homes for low- and very-low-income residents at Longbranch and South Fifth Street.

On two 5-0 votes, with virtually no discussion of the two proposals, council members approved the staff's recommendation to award the project to Habitat for Humanity.

“This is an exciting time,” Councilman Steve Lieberman said before the vote. “Who'd have thought back in 2006 we'd have the gumption to buy property, then ask the staff to find us a partner (to develop it).”

Lieberman expressed appreciation to Penny Rappa, executive director of the local Habitat for Humanity chapter, for the help she offered the city when it embarked on its plan to provide affordable housing on the site purchased by the Improvement Agency in 2007.

“I'm not saying we're giving any favoritism, but she really helped on the process,” he added.

Mayor John Shoals agreed.

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“I think Habitat for Humanity will be a great partner.”

Shoals also told Paul Bischoff he appreciated the developer's presentation on his proposal and asked him to remain involved with the city's drive to develop affordable housing.

“I think there will be other opportunities out there (to develop a project),” he told Bischoff.

The city has $350,967 in funding for the project through a HOME Investment Partnership Act grant.

In addition, if the homes are sold to low-income buyers, 50 percent of the land value will be provided as a loan and the remainder as a grant. If they are sold to very-low-income buyers, 25 percent will be a loan and the rest a grant.

Most of those in the audience were Habitat for Humanity board members or supporters, several of whom urged the council to award the project to the nonprofit group.

“We're at a time when homes are being lost and foreclosed on, when the council has the opportunity to give low-income families a chance at the American Dream,” said Carlton Brown of Arroyo Grande.

Rappa told the council the organization would take applications for the homes from throughout the county, although the selection process would tend to favor local residents.

“We really try to give people the opportunity to move beyond poverty,” she said. “We don't give them the homes. We partner with low-income families and work side by side with them to build homes to become part of the communities they will live in.”

Although contract specifics remain to be worked out between the city and Habitat for Humanity, the nonprofit, volunteer organization plans to construct four three-bedroom, one-bathroom homes, each with its own garage and yard.

The two-story homes of about 900 square feet each will be constructed as townhomes, with the two units in each module sharing a common wall. Each unit will be individually owned, according to the proposal.

The organization's budget for the project puts the total cost at $570,050, with $117,990 of that supplied by in-kind donations.

Bischoff's proposal was very similar to Habitat for Humanity's plan but with a total cost of $769,967.

But he told the council he was allowing a $75,000 contingency fund, compared to Habitat's $5,000, and would post a $100,000 performance bond.

Bischoff also said he would provide homes with much higher-quality materials that would be more durable and attractive, criticizing the amount Habitat allocated for various fixtures and appliances.

“The project I would produce and have produced in the past are vastly superior (to Habitat for Humanity's),” he told the council. “It would be a source of pride for me if people drive by and don't know it's affordable housing.”

He also pledged to restrict the homes to local applicants and to build the project faster than Habitat for Humanity, which Councilman Chuck Ashton noted is known for moving “at a snail's pace.”

But Rappa countered that the organization's low cost estimate for fixtures and appliances is because much that is being donated outright or discounted as much as 50 percent.

She also told the council the organization has improved its ability to develop projects in a timely manner and the group expects the project to be completed within nine to 12 months after all permits are issued.

Bischoff also asked the council to consider adding his own family to the list of the four low-income households that would be affected by the project.

“It's no secret housing has not done well,” he said. “It's been a rough couple of years. A couple of other projects have not gone my way.”

Associate editor Mike Hodgson can be reached at 925-2691, Ext. 2221 or mhodgson@santamariatimes.com.

May 9, 2008