HOW GREEN IS MY VALLEY?

 Just as one of Bishop’s two affordable housing projects – Valley Apartments, a 1950s motel turned senior and disabled living – seemed headed for the drain, affordable housing nonprofit Eastern Sierra Community Housing (ESCH) secured a grant to fix it up. 

But now, Patricia Robertson, ESCH Executive Director, said the project is the organization’s most “complicated” and “controversial” undertaking. 

A grant, secured in December through the State’s Portfolio Reinvestment Program, gives ESCH $4.8 million to fix the old building, which has numerous infrastructure problems. 

Additionally, in the time it takes to develop and remodel the complex, the current residents will likely be temporarily or permanently relocated. 

ESCH plans to close escrow on the property by December 2025. The grant includes a stipulation declaring the units affordable for 55 years. 

“I’m hoping [the grant money] is going to be enough,” she said. “But it needs a lot of work.” 

She’s concerned about three main things in the 65+ year-old building: lead and asbestos remediation, an outdated foundation, and relocation costs. 

The Valley Apartments currently house people who make 30% of the area median income (AMI), mainly seniors and people on disability who make less than $1,000/month. The rent payments are under $400 and include utilities. 

The current plan is to relocate the tenants on a rolling basis, but that may not be possible depending on feasibility. 

ESCH is hiring a relocation consultant to find appropriate housing for the current tenants. ESCH will also have to store the residents’ belongings and pay them to live elsewhere while they renovate the building. Robertson estimates the total relocation cost to be between $300,000 and $400,000. 

“Some [residents] will probably move on,” Robertson said. “Some may pass away.” 

ESCH may relocate the current residents from the building for a year or longer. When they return, they’ll probably not see rents as low as before.

 Apartments income restriction from 30% to 60% AMI to make the project feasible for ESCH, but that has implications for a higher rent demand.

“If we raise the rents, which I assume we will, we will have to look for subsidies for [the current residents],” Robertson said. “We are going to have to take that on.” 

The subsidies could be hundreds of dollars every month per person. 

“There are some programs we can finagle, but we’d have to spend all that time coordinating that,” Robertson said. 

One more catch: the property comes with an approximate $2 million debt. 

The story and the debt begin with the Inyo-Mono Advocates for Community Action (IMACA), a local nonprofit that provides social services to the community. 

In the 1980s, IMACA obtained the property through a 30-year loan from California’s Department of Housing and Community Development (HCD). IMACA and its board assumed the loan would be forgiven. But it wasn’t, and by the time the contract expired, the state wanted its money back — plus interest. 

Jeff Griffiths, current Inyo County Supervisor, served on the IMACA board in 2011 when the deal went awry. 

“There was nothing we could find forensically [saying the HCD would forgive the loan] written into the loan agreement,” he said. 

Robertson explained that these debts are common in low-income housing projects, and the funds aren’t usually forgiven because they’re traditionally refinanced and kept as affordable housing. 

“The concept is that you’re not ever going to pay it back because you can’t afford to pay it back because you’re not making any money,” she said. “But they can’t just give it to you because that would be a gift of public funds.” 

The incentive to re-signing the loan is that it would be kept as affordable housing, not turned into a commercial project or torn down, Robertson said. 

The HCD did try to negotiate a new deal with IMACA, which would refinance the building into a new $1.2 million loan with annual monitoring fees. 

However, IMACA isn’t primarily focused on housing projects, and its lenders weren’t used to seeing or understanding these debts. So, after running the complex at a deficit for decades, IMACA didn’t want to make another commitment to losing money and didn’t take the new loan. 

For a decade, IMACA continued to fight the HCD for loan forgiveness. Then, in January 2021, the HCD put the loan into default. 

“That became critically important because it made IMACA’s books look really, really bad,” Griffiths said. The default was detrimental to IMACA’s grant funding, and it couldn’t secure a line of credit. IMACA declared a “fiscal crisis” and sought local funding to allow the organization to continue providing needed public services to economically vulnerable community members. 

Soon thereafter, it backed out of the affordable housing market and handed off its projects to ESCH. 

ESCH went into escrow on the Valley apartments years ago but hesitated to purchase them because it didn’t have the funds to renovate them. Robertson applied for the grant two separate times before the state awarded it. 

ESCH will take on the debt as part of the purchasing price, and the $4.8 million in the grant won’t contribute to the debt. Still, ESCH isn’t as concerned about carrying the debt as IMACA was – the renovation is enough of a challenge in its own right.