San Jose officials are loaning a multifamily housing developer tens of millions of dollars in an effort to create more affordable housing.
The City Council voted unanimously June 17 to approve loans totaling $72.5 million to nonprofit Community Development Partners to build an affordable housing 160-apartment complex at 525 N. Capitol Ave., of which a little more than $25.7 million is through lender Citibank. A portion will be funded by Measure E, a property transfer tax voters approved in 2020. Councilmembers made the decision without discussion.
A June 13 memo from Housing Director Erik Soliván stated $130 million will be needed to finance the project. Solivan’s memo breaks out how the project will obtain the financing through a series of loans, fees and other measures. Santa Clara County officials committed to loaning $8 million to the project in 2023 when Community Development Partners first announced the plans. Construction is expected to break ground next month and be done by April 2027.
“We need more housing for residents at all income levels in San Jose,” Deputy Housing Director San Banu told San José Spotlight. “The project at 525 N. Capitol Ave. is leveraging city financing to deliver 160 units of deeply affordable housing, including permanent supportive units for individuals who aren’t self-sufficient, and apartments set aside for military veterans.”
The apartments range from studios to three-bedrooms and 71 will be affordable to people making 30% of the area median income — $68,320 annually for a family of four in Santa Clara County. There will be 25 apartments affordable to people making 50% of the AMI and 62 for those making 60% of the AMI.
City housing officials increased the recommended loan by $5 million after Housing Trust Silicon Valley withdrew a $5 million pledge.
“There are many projects that need funding. As this project neared closing, the financing gap was filled by other sources, which allowed us to redirect our support to other affordable housing developments,” a Housing Trust Silicon Valley spokesperson told San José Spotlight.
Of the $15 million in Measure E funds dedicated to the project, about $1.7 million was allocated from the fund’s “extremely low income” housing priorities.
Councilmembers voted earlier this month to reallocate permanent affordable housing funds from Measure E in the 2025-26 budget and dedicate $39.2 million to propping up temporary shelter to address growing homelessness.
Mayor Matt Mahan made emergency interim housing a centerpiece of his budget plan this year and successfully proposed redirecting as much as 90% of Measure E dollars for temporary shelter.
Community Development Partners President Kyle Paine said they’re grateful to the city for its support.
Contact Vicente Vera at [email protected] or follow @VicenteJVera on X.
Leave a Reply
You must be logged in to post a comment.