Three years after Sonoma State University bought an apartment complex in Petaluma to house university employees, weak demand for the units forced university officials to open the development to the general public and raised new questions about the $ 40 million investment.
The university’s decision in 2018 to buy all 90 Marina Crossing Apartments with public money came as house prices continued to rise following the Great Recession and the Rohnert Park campus, located 16 km to the north, had difficulty attracting teachers.
But the move, once seen as a change in regional workforce housing, has so far failed to affect faculty and staff, according to records.
“We were all hoping we had more people out there now,” said Neil Markley, associate vice president of administration and finance. “I think there are certain factors (which explain the lack of demand). The other thing we didn’t want to do was put our financial situation at risk in any way. “
The five-story white and blue apartment complex reinforces the Petaluma Marina and serves as a landmark south of Petaluma for motorists on Highway 101 northbound.
But since its purchase in late 2018, Petaluma’s signature building to the east has remained largely vacant, its dozens of unlet rooms overlooking a Sonoma County landscape torn by the escalating housing crisis in the region.
Records uncovered through a California Public Records Act request show that less than 15% of the building’s units were leased in a month in 2019. As of September 2020, only 25% of the 90 units were leased.
Although the numbers have risen steadily, most of the housing gains came as a result of the university’s decision to open units to the general public, which began in October 2020, according to records.
For Lauren Morimoto, president of the Academic Senate of the SSU, the lack of success came as no complete surprise, although she was not entirely comfortable questioning the decision she called it as an “example of poorly executed good intentions”.
When SSU President Judy Sakaki convened the University’s Housing Task Force, made up of faculty, staff and students, the construction of the Marina Crossing Apartments by Petaluma-based Basin Street Properties, was already in progress.
JLL, the global real estate investment consultant SSU hired to guide the university’s push towards greater housing options for employees, has connected school officials with Basin Street Properties. And with a massive JLL-run survey showing the need for 118 units for university employees, the 90-unit building seemed to fit well, officials said at the time.
Sakaki cited the housing crisis in Sonoma County, exacerbated by the deadly 2017 forest fires, which destroyed 5,300 homes, including the one in Sakaki, as the main reason for the investment. Additionally, at a California State University board meeting on November 14, 2018, Sakaki said that 20% of SSU employee applicants declined job offers due to issues. housing.
Trustees praised SSU’s leadership and approved the project, including the university’s plan to fund the $ 42 million purchase in part through reserve spending of $ 5.5 million. The remainder would come from bond debt issued by the state of California system.
A spokesperson for California State University said college accommodation provided by the university was fairly common, but it could not provide a system-wide list. Yet in 2018 there were questions about the investment, including from an SSU speaker who hesitated over pricing for potential tenants.
Market-based prices at the resort range from $ 1,960 to $ 3,095, with a small discount for SSU employees. For Morimoto, the way SSU marketed its investment did not match the needs of faculty and staff.
“SSU’s own language showed its lack of clarity on who this housing would actually serve,” she said. “(Administrators) pointed out that SSU provides affordable housing to its staff at lower than market rates. When the apartments were about to open I saw the prices and would have had a hard time affording it.
SSU employs approximately 1,400 people on its 269-acre campus.
The campus-wide survey suggested the university needed nearly 300 units for faculty and staff – 118 rental units and 174 units for sale, according to the survey.
But as of August 2021, the Marina Crossing Apartments had never accommodated more than 25 SSU employees.
Along with a lack of demand from faculty and staff, officials say a sharp drop in housing income was at least partly responsible for the university’s decision to start renting apartments to the general public. Financial records obtained by the Argus-Courier show that the university earned around $ 26 million in rental income per year in 2018 and 2019. But when the COVID-19 pandemic led school principals to empty into much of the campus in 2020, these revenues have fallen to $ 4.4 million.