History

BEGINNINGS OF RCHDC (1974-1977)

Rural Communities Housing Development Corporation (RCHDC) originated from North Coast Opportunities, Inc. (NCO) in the early 1970s, driven by a senior citizen needs survey that identified housing as one of the two most important needs in Lake and Mendocino County. The housing development efforts began in the early 1970s under the leadership of Tom MonPere, NCO Executive Director.

A discussion ensued at an NCO Board meeting in 1974 in which Lois Anderson, board member and realtor, explained that several seniors had contacted her about the difficulty of finding affordable housing while having only their retirement income. In response, NCO explored the possibility of getting the Mendocino County Housing Authority or private developers to build affordable housing, but those were both dead ends. It was decided to use agency staff to explore the possibility of NCO developing housing projects.

As a result, NCO hired Duane Hill to develop a housing strategy for the agency. He established a housing advisory board as a precursor to setting up a separate nonprofit agency for housing development, RCHDC. Although the legal entity of RCHDC was organized in November 1975, the original housing development work was financed under the umbrella of NCO up to 1983.

Duane worked with various groups, including the Mendocino County Community Development Commission, to secure State funds to purchase property for projects. Duane also worked with architect Jim Dodd from Sacramento and contractor Jim Collingsworth from Sonoma County.  Completing the development team at that time was Dave Kroot from Goldfarb & Lipman, who provided legal assistance to the agency.

In the late 1970s, Duane increasingly worked independently – fostering the development of the RCHDC Board and conducting predevelopment work on several projects, many of which required at least three years of predevelopment.  Duane spent a substantial amount of time working with local cities and counties. He understood that the housing effort needed to be a two-county effort (Lake and Mendocino) with the work focused on the urban centers in each county.

INITIAL PROJECTS (1978-1983)

The first RCHDC housing projects were developed and managed while RCHDC was still a program of NCO. This first wave of housing construction, which occurred between 1979 and 1983, included the development of eight housing projects, including:  

• Holly Heights – a 26-unit family project in Willits, completed in 1979 and financed with USDA/RD 515 funds.
• Walnut Village – a 48-unit senior citizen project in Ukiah, completed in 1979 and financed primarily with HUD 202 funds.
• Cypress Village – a 42-unit senior citizen apartment complex in Fort Bragg, completed in 1981 and financed with USDA/RD 515 and California Coastal Conservancy funds.  

• Sunshine Manor – a 30-unit senior citizen project in Lakeport, completed in 1982 and financed with HUD 202 funds.  
• Highlands Village – a 40-unit senior citizen project in Clearlake, completed in 1982 and financed with HUD 202 funds. 

• McCarty Manor – a 40-unit family project in Ukiah, completed in 1982 and financed with USDA/RD 515 funds.
• Creekside Village – a 44-unit senior citizen project in Ukiah, completed in 1983 and funded with HUD 202.
• Holden Street Apartments – a 6-unit project in Ukiah for mentally ill residents completed in 1982 and financed with HUD 202 funds. 

It is noteworthy that Holden Street was the first housing for the mentally ill in Mendocino County since the closure of the Mendocino State Hospital in 1975. RCHDC partnered with Mendocino County Behavioral Health and Recovery Services to offer on-site supportive services and empower people with disabilities to remain housed independently.   

NCO/RCHDC did this with just two staff devoted to the effort: Duane Hill and his assistant Carolyn Tappin. Property Management was contracted to a private firm, Barcelon and Berger, from 1975 to 1984.

RCHDC Formative Period (1984-1989)

In late 1981, Tom realized that NCO could not continue to support RCHDC without additional funding. In 1982, Duane and Tom prepared an application for $250,000 through the Washington, D.C. office of the federal Community Services Agency. The successful procurement of these funds enabled RCHDC to officially separate from NCO.

In January 1983, RCHDC became financially and administratively independent of NCO. RCHDC’s mission is to “provide decent, affordable housing to low and moderate-income persons.”

This was a critical period for RCHDC in which the new agency would need to generate administrative funds to support staffing and cover predevelopment costs for new projects. RCHDC had received a small amount of development and property management funds from the previously developed multi-family projects, but these funds would need to be supplemented to cover the organization’s operating expenses. 

In 1983, RCHDC submitted a successful application to the USDA/RD program for a Self-Help Housing Grant. This USDA/RD 523 grant allowed the agency to pay for both administrative and program staff to initiate Self-Help Housing projects. The program developed groups of eligible families to help build their houses with assistance from RCHDC in the financing and construction of the houses. The first projects were developed in Willits, Ukiah, and Clearlake. These projects enabled RCHDC to support homeownership among low-income residents, while also generating administrative monies for the agency. Duane was very supportive of this program – he believed in its purpose, and he had personal experience with the program as he and his wife, Ramona, built their house in Potter Valley through a Self-Help Program in 1973. 

During this period, the State Department of Housing and Community Development (HCD) approached RCHDC to administer the Section 8 subsidies and single-family rehab programs for Lake County. This program was an income subsidy that provided administrative revenue to the agency at a time when it was needed.

In 1987 Duane Hill was contacted by a group from Anderson Valley that wanted to purchase property for farmworkers. He worked with them to secure financing from HCD to purchase the property and provided help with property management. In time, the local group developed their own nonprofit—Anderson Valley Housing Association—which took over ownership and management of that property.

RCHDC also helped other nonprofits develop senior citizen housing. For example, RCHDC helped the Community Services Agency (CSA) of Washoe County, Nevada, develop two senior citizen projects in downtown Reno. The projects involved two phases of development with 43 and 40 units, respectively, funded by HUD 202. This work in Washoe County helped produce some development revenue and property management funds.

To strengthen RCHDC’s housing development capacity, Duane and Tom took several classes in Real Estate Studies at Mendocino College. Duane completed two years of classes which prepared him for securing his real estate broker’s license. Some of these classes were taught by Seiji Sugawara, who taught both business and real estate at the college. Seiji expressed interest in the agency, so Duane invited him to a meeting and shortly thereafter, he was appointed to the Board of Directors. Seiji had a varied background—he was a well-educated engineer who had also worked as a real estate broker/developer in the East Bay for several years before moving to Ukiah.

In the mid to late 1980s, as resources to support operations increased, RCHDC was able to expand the agency’s staffing to include a finance director, bookkeeper, and property manager. It was also a time to seek opportunities for expansion, new programs, and new revenue. RCHDC added Self-Help to the development of multi-family projects in terms of lines of business. By the end of this period, a core staff was in place that would continue with the agency for the next fifteen years, providing the agency with a strong foundation of experience and stability.

During this period, the Board of Directors also became more active in overseeing the agency and assisting Duane and the staff with some important decisions. The addition of Seiji Sugawara to the Board meant that there was a board member who had been very involved in developing residential subdivisions in both Alameda and Contra Costa Counties. Over time he became a major resource for the agency in guiding real estate purchases and development projects. The Board also included Bill Howland, a local bank executive, who served as Board President for much of this period and was very active in overseeing the finances of the agency.  

ORGANIZATIONAL DEVELOPMENT, EXPANSION AND CAPACITY BUILDING (1990-2000)

The 1990s were a time of agency stabilization, expansion into additional geographic areas, formation of new partnerships, and the development of the agency’s capacity to utilize multiple new funding opportunities – all the while continuing to develop new senior and family housing and significantly expanding the number of Self-Help houses constructed in the area.

Several senior housing developments that had been in the planning stages for a few years came to fruition. These projects included:

• Lakeview Housing – a 36-unit senior project located in Lakeport, developed in 1990 and funded with HUD 202.
• North Shore Villas – a 30-unit senior project located in Lucerne, developed in 1990 and funded with HUD 202.
• Jack Simpson School View Apartments – a 30-unit senior project located in Ukiah, developed in 1992 and funded with HUD 202.
• Oak Park Manor Apartments – a 30-unit senior citizen project located Red Bluff, completed in 1993 and funded with HUD 202 funds. With this project, tenant subsidies were changed to PRAC (Project Rental Assistance Contract).

The project in Red Bluff marked the beginning of the expansion of RCHDC’s service area to encompass several other Northern California counties, including Humboldt, Del Norte, Tehama, and Siskiyou.

From 1990 to 2000, RCHDC supported 205 families in the construction of their homes in Mendocino, Humboldt, and Lake County. These 205 homes brought the total number of Self-Help houses developed by RCHDC to 291.

Self-Help is a transformative project for many of the families that participate. Many remarkable stories come from the RCHDC Self-Help program, such as the following: the construction foreman for the project told the story of a woman – a single parent with one child – who built her house in the first group in Fortuna with the help of her father and members of her church. She had been a waitress in Eureka but became so inspired by construction work, that she became a licensed plumber within two years after the project was completed. 

The financing sources for Self-Help changed in the 1990s. The USDA/RD 502 loans were still the primary source of financing for Self-Help families, but secondary financing grew to include FHLB/AHP, Redevelopment funds, NeighborWorks, CalHome, and RCHDC’s Revolving Loan Fund. With the cost of housing increasing rapidly, RCHDC had to increase the amount of subsidy for each family. 

In the early and mid-1990s, RCHDC continued to pursue new lines of business, including working with the cities of Yreka and Weed and the County of Siskiyou to explore the feasibility of purchasing two LIPHRA (Low Income Housing Preservation and Resident Home Ownership Act) projects in Siskiyou County. One was a 76-unit family project in Yreka named Pine Gardens I and II, and the other was Siskiyou Gardens, a 48-unit family project located in Weed. 

RCHDC ended up purchasing only one of these projects.   

• Siskiyou Gardens—a 48-unit family project located in Weed, purchased in 1996 using HUD 236 funding and HOME funds from HCD.

During the late 90’s, the agency was also working on the development and construction of several smaller multifamily apartment projects, including:

• Lenore Senior Housing— a 12-unit senior housing project in Willits, completed in 2001.   
• Washington Court Senior Housing—an 11-unit senior housing project located in Red Bluff, completed in 2002.
• North Pine Street Senior Housing—a 10-unit senior housing project located in Ukiah, completed in 2002.

These projects were all funded with HUD 202 funds and PRAC tenant subsidies.

Throughout this period, the RCHDC offices were located at 237 East Gobbi Street. As RCHDC grew, most of these spaces were remodeled at least two or three times. One last remodel involved enclosing a patio area, which became a “new space” for the development staff.  By 2002 there were probably 20 staff members located in the Gobbi St. office.

RCHDC had an exceptional Board of Directors during this period, committed, experienced, and knowledgeable community members who came to meetings and devoted hours to ensuring the success of RCHDC.

By the early 2000s, housing development in California was becoming more difficult and expensive. The extension by the State Legislature of prevailing wage requirements to affordable housing projects, increased the cost of projects between 25% and 35%. Additionally, California expanded the environmental for all housing projects. Again, this increased the cost, development time, and feasibility of many RCHDC projects.  

With RCHDC’s expansion into other counties, new partnerships, and diversification of its programs, this period represented a time in which RCHDC was incrementally becoming a more important player in the affordable housing world of rural Northern California.  

CONTINUING ORGANIZATIONAL DEVELOPMENT AND NEW LINES OF BUSINESS (1999-2008)

In 2002, the RCHDC Board realized that the staff was outgrowing the existing office space. Board member Seiji Sugawara took the lead and located an office space behind the Ukiah Senior Center at 499 Leslie Street. The purchase was financed with a USDA/RD Community Facilities loan. The move to 499 Leslie marked the end of an era in terms of office space, but it was also symbolic of a major change in focus in terms of specific programs.

In 1999, Paul Rice, the USDA/RD Regional Director, contacted RCHDC and made the agency aware of Expiring Use Projects. These were USDA/RD-financed affordable housing projects that were owned by private for-profit entities and had been in existence for approximately 20 years, a period that fulfilled their commitment to maintain them as affordable. At that point, the owners/investors could sell the projects or convert them to market-rate rentals. There was a caveat that if they were to be sold, they first had to offer them to a nonprofit housing agency that would maintain them as affordable housing. With three of these expiring use projects available in Mendocino County, RCHDC decided to move forward with the purchase of these properties. This was an entirely new line of business for the agency and required a major investment of time, money, and expertise to pursue the initial three projects. The first expiring use transactions for RCHDC involved the following three projects:

• Orchard Manor – a 64-unit family project in Ukiah.
• Orchard Village – a 48-unit family project also in Ukiah.
• River Gardens – a 48-unit family project in Fort Bragg.  

The purchase of these three projects was RCHDC’s “baptism by fire” in dealing with expiring use and tax credit projects; the endeavor represented the beginning of a significant learning curve for the agency. This involved creating a partnership with investors which was both complicated and time-limited. One of the critical concerns was making sure that there were enough units in the deal to entice the investors, which explains why RCHDC included the Ft. Bragg project with the two Ukiah projects in one partnership. It is also important to note that there was common ownership for all three projects.

The Ukiah/Ft. Bragg projects were followed by the purchase of three expiring use projects in Crescent City in 2003:

• Totem Village – a 38-unit family project.
• Seabreeze – a 56-unit family project.
• Seagull Villa – a 50-unit senior citizen project.       

The purchase of these projects and maintaining them as affordable housing was important. These were large apartment complexes, centrally located in terms of services and available transportation. In both cases, the Redevelopment Agencies of the cities of Ukiah and Crescent City, and of Mendocino County, helped RCHDC with funds to cover some of the predevelopment costs.

During this same period, RCHDC started working to develop Supportive Housing Projects. RCHDC had some experience in this field with Holden Street Apartments. These projects were designed to provide permanent housing for the chronically mentally ill (CMI) in partnership with the local mental health departments. RCHDC would be the owner and manager while the County Mental Health would provide the referrals of prospective tenants and ongoing services.

CMI housing projects that were developed during this period included:

• Gibson Court – a 16-unit project in Ukiah, developed in 2002. It was funded with City of Ukiah Redevelopment funds, HOME, and HUD 811 funds. Mendocino County Community Development Commission provided vouchers for 4 non-HUD units.
• Bevins Court – a 10-unit project in Lakeport, developed in 2004. It was funded with HUD 811 funds, AHP, and HOME funds.

These projects were a new line of business for RCHDC and presented unique challenges.  They were also a harbinger of RCHDC’s future involvement in developing these types of projects in other counties outside of Lake and Mendocino. The expansion into acquiring expiring use projects and Supportive Housing Projects placed an increasing burden on Property Management personnel. Tax credit projects in particular required an extensive amount of monitoring and reporting. Also, Supportive Housing Projects were multi-funded projects, which meant that Property Management was reporting to several different funding agencies.

This decade was also a period of significant expansion for RCHDC’s Self-Help Program. The 97 houses built during this period brought the total number of Self-Help houses built by RCHDC to 388.

For several years, RCHDC had explored property to construct a farmworker housing project in Lake County. After an extensive amount of work, RCHDC located a parcel in Kelseyville and while there was some opposition, both the Lake County Planning Commission and the County Supervisors approved the site.

This new construction project represented an expansion into the area of Farmworker Housing complexes:

• Oak Hill Apartments – a 40-unit farmworker housing project in Kelseyville. Completed in 2006, this project was funded by USDA/RD 514 funds, HOME and AHP.

In early 2007, RCHDC was contacted by Rob Weiner from California Coalition for Rural Housing (CCRH) about purchasing a 14-unit senior housing project in the community of McCloud. Rob wanted a nonprofit housing group to purchase it and preserve it as affordable housing. RCHDC was able to secure a loan from HAC to purchase the property.

From 2000 to 2004, RCHDC purchased several undeveloped properties that it planned to develop in the future, including:

• North State Street – a four-acre parcel in Ukiah intended for the development of Self-Help housing.
• Orr Creek - eight acres on Orr Creek just north of Ukiah city limits intended for multifamily apartments.  
• Lakewood- a ten-acre parcel north of Ukiah intended for the development of Self-Help housing.
• Collier— a six-acre parcel in Nice intended for the development of multifamily housing.  

This was a period in which available property for development was becoming very scarce – particularly properties already zoned for housing. By purchasing these properties, RCHDC assumed a great deal of debt and challenges in developing them, but those were the risks of the development business.

The holding periods for property over the past twenty years had increased substantially. In the past, RCHDC could keep the holding period down to a year or two on improved properties. With RCHDC carrying out its own development, there were now holding periods of five years or more before a project was ready to close loans and move into construction. These new timelines not only increased the carrying cost of projects but also increased risk over time.

Another major variable that confronted RCHDC during this period was the increasing complexity of development. Along with an increasing amount of regulation from the federal, state, and local authorities, there appeared to be a lack of knowledge or capability within these governmental agencies of how to implement and manage these regulations.

These issues were compounded by the increased need for new or upgraded infrastructure that confronted local communities. For example, RCHDC had a Self-Help project of 30 lots in Upper Lake, but the local community service district did not have the capacity to serve the project. The solution was that RCHDC, in collaboration with the County of Lake, applied for Community Development Block Grant funds (CDBG) to support the expansion of its water and sewer capacity. This was successful but it delayed the project for at least two years.

RCHDC moved into the 21st century, a pattern developed in which each project was challenged with infrastructure components, which means additional capital, coordination, and time. Despite these challenges, by 2008 the agency had over 1000 rental units in its portfolio and had assisted families in building almost 400 units of Self-Help housing. 

The world of affordable housing finance had changed drastically from the early days.  Redevelopment funds through individual cities and counties had become the major source of predevelopment funds. These were critical for determining the feasibility of projects. It also became essential to combine other financing with low-income housing tax credits to create a package that made a project feasible.

Duane Hill’s departure in 2008 marked the end of an era. Duane had been the founding Executive Director and had guided the agency for approximately 33 years, continually demonstrating his extraordinary creativity, tenacity, patience, and ability to find capable folks to work with successfully.     

RESILIENCY DURING THE GREAT DEPRESSION (2008 TO 2016)

In 2008, RDHDC hired Bruce Alfano. This was the beginning of the Great Recession, a financial crisis that caused a large number of housing foreclosures and reductions in funding for affordable housing programs. RCHDC was able to complete a multifamily development during this time.  

• Duane Hill Apartments – a 32-unit family project in Ukiah. It was financed with tax credits, HOME, and redevelopment funds.

RCHDC was successful in completing an additional 19 Self-Help Projects in McKinleyville and Lake Mendocino. The Lakewood Self-Help Project on Lake Mendocino Drive was the largest and most complex Self-Help project that RCHDC got involved with. It was composed of two parcels—the front parcel needed to be purchased due to the back parcel being landlocked. Years were spent working with the county and the owner of an adjacent parcel to get a clear title to the property. It took 9 years from the time of the purchase until RCHDC could start working on the infrastructure. With 59 lots, this was the largest Self-Help project RCHDC had undertaken.  

In 2010, Chuck Lange was hired as Chief Operating Officer, and in 2011, Lois Goforth took over as Chief Executive Officer. Working with Chuck, Lois realized the need to generate more revenue for the organization. Chuck had a great deal of experience in developing private market housing – so he developed a plan to refinance older RCHDC housing projects over a 2-to-3-year period. This produced a substantial amount of financing to rehab existing projects and developer fees that increased revenue for the agency’s administration.

By early 2013 the agency was starting to focus on new multifamily projects. RCHDC had been contacted about an Expiring Use Project--Autumn Village, a 40-unit senior project located in the city of Clearlake. This was a 9% tax credit project which was closed in early 2016. It produced property management funds for the organization, as well as some limited developer fees.   

Mike Pallesen, Director of Development, spearheaded the solar addition to Autumn Village. This was the beginning of a major initiative to add solar power to existing RCHDC projects to save energy and generate revenue for the agency.

In 2013, RCHDC began discussions with Humboldt Bay Housing to develop Arcata Bay Crossing, a 32-unit project that was both a rehab of an old hotel and new construction units for mentally ill adults. It was a joint development between RCHDC and Humboldt Bay Housing Agency and involved Humboldt County Mental Health Agency as the Lead Service Provider. RCHDC handled property management for the project, which was completed and occupied in late 2016.

In June 2014, RCHDC submitted a HOME application to HCD to rehab and refinance the McCloud senior housing project. It was an important project because RCHDC had not been eligible to apply for these funds for several years. RCHDC renewed its CHDO status with HCD and the HOME application was funded. This helped produce some developer fees for the agency and rehab the units.

In November 2015 the Board selected Brad McDonald as the next Chief Executive Officer for RCHDC, replacing Lois Goforth. Brad had an extensive background working with Fetzer Corporation in various management roles. He also was the CEO of the Coyote Valley Tribe for three years. Lois hired Brad as the Director of the RCHDC Self-Help Program in late 2014. He held this position with RCHDC before being hired as CEO.  

It is important to note that during Lois Goforth’s tenure as CEO, she assisted RCHDC in stabilizing its financial situation with major assistance from Chuck Lange. She also hired Mike Pallesen in Development which helped the development unit become a more focused and capable group. Finally, she helped the board believe in the organization and its future. It is difficult to detail Lois’s contributions to RCHDC, there were so many. For many years under Duane Hill’s leadership, she handled the agency’s finances and worked with other staff to develop new projects. She was invaluable to Duane Hill, and once she became CEO, she played a major role in rebuilding the organization. She had exceptional management skills and worked well with other employees.

In addition to developing Autumn Village, Arcata Bay Crossing, and the HOME-financed McCloud project, Lois also oversaw the revival of Self-Help during this period, which included an additional 16 homes in Lake Mendocino.

One of Brad’s skills was his ability to hire good staff and provide them with positive direction. Early in 2015, Brad connected Ryan and Mike Pallesen, resulting in Ryan joining the RCHDC Development team. In 2016, Ryan was promoted to Director of the Development Department while Mike continued as the Special Projects Coordinator, making major contributions to RCHDC’s future development plans. In 2017, he hired Dan McIntire as Director of Property Management. With Tom Simms, the Chief Financial Officer, and the rest of the management staff in place, Brad had the core of an effective senior staff. Brad learned quickly that in the affordable housing business, one has to stay ahead of the curve—adjusting to changes in funding.

Without a doubt, developing and funding a project today is far more complicated than it was in the 1980s and 1990s, but without the groundwork carried out by early staff and Board members, prospects today would be far less viable. Any building is only as strong as its foundation and the same can be said for any organization. RCHDC was built with a strong foundation and has withstood the test of time. If the current Board and staff members continue this, the agency will continue to play an important role in providing affordable housing in many rural communities in Northern California.