Brennan AngelNew off-campus housing Bella Monta¤a is at the end of its first phase with two available units left and the second phase will start in mid-June.
While the other 19 homes have been signed off and sold, two more remain and the Cal Poly Housing Corp. has expanded the eligibility restrictions for prospective buyers. The two available condos have two bedrooms and one bath, individually priced at $323,000 and $327,000.
“We have applications, (and prospective buyers) are currently undergoing loan prequalification,” said Jim Reinhart, managing director of the Cal Poly Housing Corp. “Once they’re qualified, they can reserve a unit through our realtors, who are available to show the units by appointment.”
Priority was initially given to new faculty recruits, then extended to a retention group that consisted of faculty hired in the past six years. Once Cal Poly knew that it had met the demand for those employees, it opened eligibility to all Cal Poly employees.
“We don’t have the waiting list that we expected when we broke ground in April 2005, but sales are progressing well in light of a soft real estate market,” Reinhart said.
Phase two of the project will be ready June 19 and half of the homes are already in escrow. The third and final phase is set for completion in September, which will introduce 30 more units.
“We are now offering the remaining homes in phases one, two and three to all Cal Poly faculty, management, staff, lecturers and coaches,” Reinhart said.
The housing corporation has also included a new type of eligible buyer: the individual colleges on campus. The housing was shown to the deans of the colleges so they would be able to see the housing opportunities available for their faculty.
“Some decided that they would like to buy a unit to house long-term visiting faculty,” Reinhart said.
The Orfalea College of Business was the first to purchase a unit and is now using it to house a visiting professor from Israel.
This also directly benefits Cal Poly when it comes to attracting faculty and staff to the area.
“The project is helping the university with recruitment efforts. The high prices in the San Luis Obispo real estate market are a deterrent to attracting faculty from parts of the country with lower housing costs,” he said. “Bella Monta¤a aims to provide a new outlet for faculty who wish to move here and buy a home.”
To buy or not to buy
As with any big purchase, there are many factors to consider.
Location, brand-new conditions, financial benefits, employee community and more fill the pros side of living in the new complex.
“The project is brand new. It’s built to the highest standards and it is all owner-occupied, with the exception of the few college-owned units” Reinhart said. “Many of the condominiums (in San Luis Obispo) are investor-owned and rented to students so it’s a different environment when you have mostly student residents versus owners. For the faculty it’s a nice environment where they can share the collegiality with their neighbors as they are all members of the Cal Poly community.”
First-time buyers also receive financial breaks that include not having to pay any closing costs, substantial discounts on their mortgage interest rates, and paid Home Owners Association fees for the first year. When homeowners decide to sell, the costs can be much lower than the average 5- to 6-percent sales commission, Reinhart said.
Additionally, the prices of the condominiums are substantially below those of comparable homes in San Luis Obispo.
“If you compare Bella Monta¤a to other homes that don’t have the same restrictions such as eligibility, this complex is 20 to 30 percent below those prices,” Reinhart said.
However, this lends a hand to the issue of investment value.
Purchasers own the condos, but the lease has restrictions that allow the condos to be affordable for the next round of buyers. This means that the resale prices will only be allowed to increase with the rate of inflation. The Bella Monta¤a Web site defines this as a price cap at “the original price of the home increased by the fractional change in the Consumer Price Index (CPI).”
“That limits how quickly the home can appreciate to keep it affordable to faculty and staff in the resale market in the future,” Reinhart said. “However, it still allows the homeowners to build equity, and it should provide a much better financial return than renting over the long-term.”
“The price cap is dramatic but in the long run it will help the university provide housing. The goal is to provide housing, not investments,” said Adrienne Miller, Office of Student Rights and Responsibilities coordinator and new Bella Monta¤a resident. “Without some sort of price cap, the original buyers would have an unreasonable financial advantage.”
However, this is a main concern for prospective buyers who would like their purchase to gain appreciation in excess of the CPI increase over the years.
Other aspects to consider include the fact that many of the condos back up to California Highway 1 and while there is no concrete sound wall to block out the noise from traffic, a fence has been built to help reduce the noise. An actual concrete sound wall was not allowed due to particular easements from the utility companies that restrict the deep concrete footing that would be needed.
The condos that back up to California Highway 1 are 3-bedroom, 3-bath homes going for $378,000 to $389,000, based on square footage, garage space and more.
“The location within the site, views, square footage, one or two-car garages, and number of bathrooms and bedrooms were taken into consideration,” Reinhart said. “We were guided by our real estate company on how to price the homes. No taxpayer or state funding is being used for the project, and the homes are being sold at our cost.”