Novato approves aid for Habitat for Humanity project

Novato has approved about $1 million in support for a Habitat for Humanity project to build 80 affordable, for-sale homes — the largest affordable homeownership project for low- and moderate-income families in the state, the nonprofit said.

The City Council voted unanimously on Tuesday to approve a $350,000 grant from its affordable housing fund for the project, which includes an office building, at 8161 Redwood Blvd.

The council also voted to waive several city development fees totaling about $591,000. The city previously provided about $161,000 to the effort in 2022 as part of a three-way matching grant with the county and the state.

The global nonprofit, which builds and manages affordable housing in partnership with working families, completed a project in Novato in 2017 when it built 13 homes at Mount Burdell Place near Fourth Street.

The new project, which the City Council approved in 2022, will include 23 housing buildings on a 14-acre lot with one to six homes in each building. Each home will have two to four bedrooms.

All homes would be deed-restricted, with 40 to 50 of the homes reserved for families of 50% to 80% of the area median income. The remaining homes would go to families with 80% to 100% of the area median income.

Habitat for Humanity will require no down payment on the homes and offer a no-interest mortgage. The housing costs will be capped at 30% of the household’s income.

“Which allows them to plan and move forward and do things like sign their children up for activities, potentially have a family vacation and also save for other educational opportunities for their kids,” Maureen Sedonaen, chief executive officer of Habitat for Humanity Greater San Francisco, told the council.

The project will include a 2,154-square-foot, 26-foot-tall Habitat for Humanity office building that will also be used as a community center.

Residents will be provided 162 parking spaces. The office building will have 23 parking spaces.

The project is estimated to cost about $97 million, including design and permitting, according to city staff.

Vicki Parker, director of the Novato Community Development Department, told the council that below-market rate developments such as this project typically need additional support, such as through fee waivers, to get off the ground.

While Habitat for Humanity asked the City Council to waive all development fees, city staff recommended only waiving some, given the city’s projected budget deficit.

“We certainly recognize that construction costs have gone up significantly,” Parker told the council. “Habitat is estimating their full construction and development costs to be over $97 million, so significantly increased over the past three to five years. It certainly would have been nice if we could have brought forward to you an option of a 100% waiver.”

Given the city’s projected budget deficits, Councilmember Pat Eklund supported the decision to waive some but not all fees, saying the approach “tries to reduce the deficit for Habitat without significantly impacting the city of Novato.”

Mayor Susan Wernick also supported city staff’s proposal. “It was very obvious that you turned over every stone to figure out what we could do,” she said.

Sedonaen said the nonprofit has secured about $3.7 million so far from organizations, donors and Marin County’s housing trust fund. The organization applied for an additional $8.3 million of state grants last month.

“This is a long project,” Sedonaen told the council. “It’s going to take us many, many years.”

About half of the project costs would be paid through resident mortgages, Sedonaen said. For the remaining costs, Sedonaen said, the nonprofit is aiming to have about 30% from public subsidies and 20% from philanthropic donations.

The project would benefit Novato by providing for-sale affordable homes for residents and providing a large number of homes toward the city’s state-mandated housing development targets, Sedonaen said. The project would make up 12% of the state-mandated low-income homes and 12% of the moderate-income homes required of the city by 2031, she said.

More information about the project can be found at novato.org/habitatredwood.