Home Page

Using HOME

Plaza Arizona
San Diego, California

The completion of Plaza Arizona transformed a neighborhood eyesore into attractive housing.

San Diego is one of the nation's highest cost housing areas, with a median sales price of more than $269,000 for a new home. This presents a significant challenge for the San Diego Housing Commission (SDHC), which, as the city's housing authority, attempts to provide affordable homeownership opportunities to low- and moderate-income households. There are more than 15,000 families currently on the SDHC's waiting list for rental assistance.

In 1994, the SDHC seized an opportunity to purchase a site located in the North Park neighborhood, home to a mix of rental property and owner-occupied single-family homes. A 50-unit condominium complex had been partially constructed in the mid-1980s and then boarded up. The site had been in receivership since the original developer went out of business in 1986 and was owned by the Federal Deposit Insurance Corporation.

The SDHC's initial plan was to complete all 50 units as rental housing. However, following extensive meetings with local residents anxious to improve neighborhood stability, a revised plan was developed, reducing the complex to 38 units and offering the units for sale to first-time low- and moderate-income buyers.

HOME funds were made available for all but $50,000 of the $4,403,381 acquisition and development costs for Plaza Arizona. The remaining $50,000 came from local funds. Construction was completed in November 1995. Currently, 35 of the units are sold and occupied, and sales are pending for the remaining 3 units.

Buyers of the two-bedroom units at Plaza Arizona must be first-time home buyers with incomes that are less than 80 percent of the area median. They must have sufficient funds to cover closing costs and the minimum down payment (approximately 3 percent of total sales price) and must qualify for a first mortgage loan with a participating lender. Also, they must agree to live in the unit as their principal residence.

The SDHC has made a variety of assistance programs available for potential buyers who meet these conditions. These include a shared equity program that provides a deferred payment, "silent" second mortgage equal to 20 percent of the purchase price. The equity is shared with the SDHC if the unit is sold within 15 years. The Mortgage Credit Certificate program provides qualified first-time home buyers in San Diego with a federal tax credit of 20 percent of the mortgage interest paid each year. The SDHC also offers a down payment assistance grant (up to $5,000 or 2 percent of the purchase price) and closing cost assistance, which averages $1,500 to $2,000. In addition to application fees and specific qualifications for each of these programs, applicants must complete homebuyer classes offered by the participating lenders to qualify for assistance.

With per-unit costs of $113,247, buyers at Plaza Arizona are able to purchase two- bedroom homes for as little as $2,700 down and a $600 monthly mortgage payment, well below the average cost of homeownership in San Diego. The average income of the buyers is 71 percent of the area median. One of the buyers previously resided in public housing.

The development of Plaza Arizona was an important achievement for the SDHC in providing affordable homeownership opportunities in a very high cost market. The project was also important to the North Park neighborhood. Residents helped define the project, which removed a decade-old eyesore and brought 38 new homeowners into their area.

Contact: Janine Rojas, Community Relations Specialist, San Diego Housing Commission, 619/525-3613

Copyright 1998 - 1999 - 2000
Affordable Housing and HOME
National Association of Housing and Redevelopment Officials (NAHRO)
630 Eye Street, NW
Washington, DC 20001-3736
Telephone: (202) 289-3500
Fax: (202) 289-4949