The two 31-year-old Anritsu workers, who together make under $80,000 a year, could continue renting their $1,500 a month two-bedroom apartment in Morgan Hill and forget building equity or raising their two children with a backyard.

     Or the couple could try to buy a house here with little or no money down, and face staggering monthly mortgage payments between $3,000 and $3,800.

     "It was very hard," Elizabeth said. "(Lenders) wanted so much down. I have kids, and there's no way I could have saved it."
     That meant moving out of the area or even out of state to buy a home -- and raising their two young children away from the help and love of their grandparents. Fortunately, there was another option. After they married, the Sotos visited seminars and joined waiting lists for an affordable home. It took about six years, but they eventually paid $428,000 for a 1,600-square-foot, four-bedroom house worth $600,000 in South County Housing's mixed-income Los Arroyos subdivision in Gilroy.

     The couple doesn't qualify for the development's subsidized daycare and their home resale rates are restricted to keep it affordable for future users. But grandma takes care of the 2-year-old while the 4-year-old goes to preschool, and the children have their own bedrooms.

     "They wouldn't have as much freedom" in an apartment, Elizabeth said. "When you own a home, you have a backyard where they can play, a safe place to be."
    
Roll out the statistics
     There are hundreds of similar stories in South County, thanks to the work of nonprofit agencies such as South County Housing, the Emergency Housing Consortium and the Housing Trust. Officials showcased their efforts in Morgan Hill and Gilroy in a bus tour last weekend to kick off Affordable Housing Week.

     It couldn't have been timelier. Two days after the tour, reports showed median home prices for the nine-county Bay Area rose to a record $622,000 in April, 20 percent higher than at that time the previous year. Median home prices in San Benito County hit $599,000 in April; Santa Clara County hit a new record at $681,500, nearly 20 percent higher than in 2004.

     So it's not a surprise that a family can earn $126,600 and still qualify for some sort of affordable housing.

     "We continue to hear from business leaders and CEOs that housing is the top impediment to doing business in the Silicon Valley," said Shiloh Ballard, the event's co-organizer and the housing director for the Silicon Valley Leadership Group. "This is one way to engage business and civic leaders and community members to showcase quality housing, where we can house the folks that make our economy thrive."
     Very-low income households in Santa Clara County earn up to $53,050, or 50 percent of the county's median income of $105,000 for a family of four. Low-income households earn up to 80 percent of the median, or roughly $84,900. The ceiling for below-market housing is $126,600.

     The statistics show these families need the help: more than 40,000 Santa Clara County residents – more than the population of Morgan Hill – pay more than 50 percent of their income for housing, according to the 2000 Census.

     As of March, only 19 percent of Santa Clara County households could "afford," or spend less than 30 percent of their income on a median priced home, versus 53 percent nationwide, according to the state's Association of Realtors. Figures for San Benito County were not available.

     Meanwhile, the San Jose area's "housing wage" -- the amount a full-time worker must earn to "afford" the $1,313 fair-market rent for a modest two-bedroom home -- was $25.25 an hour in 2004, according to the National Low Income Housing Coalition's annual "Out of Reach" report. It's the seventh least affordable metropolitan area in the country, even surpassing New York City ( San Francisco is tops at $29.60).

     San Benito's housing wage was $17.06 an hour; the state's is $21.24 and the nation's is $15.37, or $31,970 a year.

     Waiting lists for the affordable homes that do exist are long: 155 families applied for 23 affordable homes in South County Housing's Viale and Morgan Station developments in Morgan Hill this year.
    
‘Housing project' redefined
     There's a big payoff these days, however. What affordable housing has sprung up in South County is often cutting-edge stuff, last week's tour showed. And it's far from the crumbling "housing projects" of past popular stereotypes.

     "When many people hear the term ‘affordable, subsidized housing or project,' they have a picture pop in their heads, but many times it's not accurate," said Ballard, the leadership group's housing director. "The idea is to show people what it looks like. Often, the end result is ‘I couldn't have told you that was affordable housing.' "
     That was often the case during last weekend's tour, at least on the surface, anyway. The 100-rental town homes in Morgan Hill's Murphy Ranch off Dunne Avenue feature multiple colors and varied rooflines that make each seem like its own detached house, situated around a central playground, swimming pool and common room used for a MACSA homework club.

     Units in the $30 million First Community Housing development are rented to workers who make between 30 and 55 percent of the county median income, and some tenants pay only $500 a month for three or four bedrooms. The first phase was finished in 2003.

     "These are kids who never had their own bedroom," said First Community Housing's Jeff Oberdorfer. "For many people, it's the first time they've had independent living."

     Green building amenities added 2 percent to the initial project cost. Solar panels light the common room and the parking lots, while carpets and chairs are recycled. Patio furniture is sustainable teak. The swimming pool is solar heated and "only a minor part of the budget, even though it seems extravagant to many people," Oberdorfer said.

     Gilroy's award-winning Los Arroyos subdivision features homes designed for all income levels, along with traditional market-rate homes which helped pay for a portion of the $32-plus million project completed in 2003.

     Standing on the corner near the community center on a sunny Saturday morning, it's hard to tell them all apart. In fact, the $600,000-700,000 for-profit models seem, well, bland and monolithic compared to their below-market counterparts priced in the $300,000s and $400,000s. They're modest but often feature charming trim, their rooflines and porches meant to mimic those of historic downtown neighborhoods.

     "Nobody would have ever thought it would be possible to have all kinds of housing streams and income types," said Mayor Al Pinheiro, who greeted visitors. "It's the perfect world. We shouldn't all be in our different cocoons. Whether you make $10 million or $10 an hour, we should all work together."
    
Building communities
     There is plenty of evidence and several studies that show well-designed, well-managed affordable housing does not, in the long run, lower property values of homes nearby, said Dayana Salazar, who chairs San Jose State University's urban planning department.

     "In some cases, it actually increases values in the surrounding neighborhood," she said.

     In fact, South County Housing replaced crumbling buildings and old trailer parks with three of its Morgan Hill projects showcased on the tour. The $1.4 million Skeels Building at Third and Monterey features 3,600 square feet of commercial space and 13 single-room apartments for extremely low-income renters who make below 30 percent of the county median. Finished in 1996, it replaces the dilapidated old Skeels Hotel, where 20 families once crammed into the upstairs.

     "They thought if this could be revitalized, others could follow," said SCH project manager Karen Saunders, noting the new building that houses a bagel shop building across the street.

     A few blocks to the south, Villa Ciolino's 42 tidy family apartments for low-income families sprung up in 2001 to replace a trailer park officials said was blighted, as did the 72 family apartments of the $20 million Jasmine Square project recently completed on Monterey next to the post office.

     Officials said it cost $400,000 to relocate the Jasmine trailer park's 23 families, many to Villa Ciolino or other existing projects. The city's Redevelopment Agency helped pay for the three projects.

     There are more than just homes. Jasmine Square features on-site day care, as does Los Arroyos. South County Housing helped residents there launch a 500-member neighborhood organization that stages an annual community-wide party.

     Getting it all done can require creativity and patience. Officials said many projects now demand funding from a dozen or more public and private sources, all with their own hoops.

     South County Housing developed and sold 13 market-rate homes to subsidize the state-of-the-art Sobrato homeless services center and transitional apartments it will run with the Emergency Housing Consortium. Forty-four families helped build their own Los Arroyos homes. Jasmine Square's playground rose with donated labor.

     The Wheeler Manor senior apartments project saved famed Gilroy-area architect William Weeks' historic landmark, the old Wheeler Hospital, from the wrecking ball. San Martin's Boccardo homeless and transitional apartments finished in 1998 feature units with central doors that can expand to accommodate larger migrant families.

     Political savvy is important, too. South County Housing and EHC met with neighbors multiple times and entertained a laundry list of their demands to get the Sobrato center approved, with some help from South County Supervisor Don Gage and then-Mayor Tom Springer. Officials hope to finish the apartments next spring and the center by Christmas 2006.

     "The political will is really critical for projects like this," Saunders said at the Boccardo center, built by SCH and run by EHC. Ninety percent of residents move to stable housing at the end of their nine-month stay.

     The quality of the projects on South County's tour should help create support for state legislators as they work to replace a nearly depleted state housing bond, said Gilroy state Assemblyman Simon Salinas. When he was elected to the Salinas City Council 20 years ago, Salinas said officials in his community seemed to simply throw up swaths of apartments, something even he resisted at the time.

     "You folks build homes, neighborhoods and communities," he told the developers and city officials on last weekend's tour.

     The tour was co-sponsored by Greenbelt Alliance, the cities of Gilroy and Morgan Hill, the Emergency Housing Consortium, First Community Housing, the Housing Action Coalition of Santa Clara County, South County Housing, the Santa Clara County Association of Realtors and the League of Women Voters.