Calistoga approves $400,000 housing loan to convert four units at 1405 Cedar Street to deed-restricted housing

With Mayor Williams recused and temporarily out of the chambers, Calistoga’s City Council voted to provide a 10-year loan of $400,000 from the city’s Affordable Housing Fund to assist the Napa Valley Community Foundation and Burbank Housing in converting four market-rate rental units at 1405 Cedar Street into deed-restricted affordable housing.

Planning staff explained the Foundation received the property as a donation in February 2021. The requested loan would assist with the purchase; the listed purchase price is about $1,100,000. Napa Valley Community Foundation representative said the units currently function as workforce housing with tenants paying about $1,450 per month and described the Foundation’s willingness to accept a reduced return to secure permanent affordability. “We do have a fiduciary duty to convert these dollars into grants… I am delighted to take a haircut,” the Foundation representative told council.

Council members asked about terms and risks. One council member said the loan was acceptable because of the Foundation’s track record though the structure (deferred payments, 2% interest) is atypical for market lenders. Councilmember Eisenberg argued the loan keeps units in local affordable housing stock and returns funds to the city housing fund for future use.

Vice Mayor Lopez Ortega presided while the mayor was recused; on motion and voice vote the council directed staff to move forward with the loan per the staff recommendation. Councilmembers indicated support for the loan as a way to secure long-term affordability and to reuse the housing fund when repaid.

Next steps: staff to finalize loan documents, close escrow under the terms presented and report back when the transaction is completed.