Real Estate

Hope for housing amid market woes

the Palm Valley Apartments on Coolidge Drive were built two years ago by private investors for about $5 million, but the complex now is priced below $4 million,  The Housing Authority of Stanislaus County is trying to buy the 40-unit building.
the Palm Valley Apartments on Coolidge Drive were built two years ago by private investors for about $5 million, but the complex now is priced below $4 million, The Housing Authority of Stanislaus County is trying to buy the 40-unit building. Modesto Bee

There's a silver lining to the current real estate crisis: Plummeting prices are creating buying opportunities for nonprofit groups that help low-income and disabled people find homes.

Houses and apartment complexes are cheaper to buy, and so are construction materials. Building contractors are eager to offer competitive bids, and landlords are more willing to rent to those with special needs, according to several Modesto housing-assistance groups.

"This is a once-in-a-lifetime opportunity for us to make a difference in this arena," said Anita Hellam, executive director of Habitat for Humanity for Stanislaus County. Her organization is busy buying foreclosed and bargain-priced homes, which it will help new owners renovate.

"We're looking for houses in need of rehabilitating that we can buy for way below market rate," said Hellam, noting that five south Modesto homes already have been purchased for about $70,000 each. "We're in escrow on additional properties that banks have repossessed."

Negotiations also are under way for a 40-unit Modesto apartment complex, which the Housing Authority of Stanislaus County is trying to buy.

The Palm Valley Apartments on Coolidge Drive were built two years ago by private investors for about $5 million, but the complex now is priced below $4 million.

"We're lining up financing," said Bill Fagen, the housing authority's executive director. "I like the buying opportunity there."

No deals to be had during boom

Such opportunities weren't around several years ago when the region was in a building boom.

"During the height of the market, I wouldn't even consider buying a single-family home because it didn't pencil out financially," said Fagen, whose organization owns more than 1,500 housing units in Stanislaus County.

"Now, every day I'm seeing more and more opportunities to buy," he said. "I'm watching the market for the right single-family homes and duplexes."

Fagen said he particularly wants one or two good deals on homes his agency could buy now, then resell to low-income families.

The housing authority also is building an apartment complex in northeast Modesto at Belharbour Drive and Roselle Avenue. When it opens in April, it will provide 20 rent-subsidized apartments for low-income residents, such as families of four earning $37,000 or less.

That 20-unit complex was put out to bid before the construction market tanked, so Fagen said its more than $7 million price tag is no bargain.

Contractors these days, by contrast, are offering more competitive bids. Fagen said he sees that when his agency does rehabilitation work on its properties.

Property managers being more flexible

Construction costs also are coming down for the Stanislaus County Affordable Housing Corp., which this year plans to start building four apartment complexes in Modesto and Ceres.

"The price of raw materials has softened, and subcontractors, quite frankly, are hungry," said David Meling, the nonprofit housing corporation's executive director. He said materials such as cement and steel are cheaper to buy, in part because so few houses are being built.

His group plans to build an 18-unit senior citizen complex in Modesto, a 30-unit senior citizen complex in Ceres, a 32-unit housing project for those with mental disabilities in Modesto and a 30-unit project for those with mental disabilities in Ceres.

When the housing market was tight, many private rental homeowners would not participate in rent-subsidized programs for people with special needs, but that's changed.

"Property managers have been much more willing to work with us lately," said Denise Gibbs, executive director of the Stanislaus Community Assistance Project, which provides housing for low-income people with chronic and life-threatening illnesses, such as AIDS. "It's been easier to place people."

Bee staff writer J.N. Sbranti can be reached at jnsbranti@modbee.com or 578-2196.

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