Council approves Sarah Mesa affordable housing deal and $4M loan for veteran and low-income units

San Diego's City Council approved a ground-lease development agreement and a $4 million Bridge to Home loan on March 10 for a Community Housing Works project at 3440 Sandrock Road (Sarah Mesa). The 60-unit plan includes 59 rent-restricted apartments (30% to 60% AMI) and one manager unit; the developer proposes that half the units will be for veterans with supportive services and has secured VA vouchers for that purpose.

Economic Development staff described key terms: Community Housing Works will pay an initial deposit, conduct due diligence during a 90-day period, and be responsible for capital improvements and obtaining financing. The city will retain ownership of the land under a 65-year ground lease; the pro forma anticipates residual rent payments to the city with a present net value estimated in presentations. Staff said the project's total cost is roughly $42.4 million, that the ground lease keeps land ownership with the city and that improvements revert to the city at lease expiration.

Several neighbors and community members voiced concerns at public hearings about the project's scale (five stories on a roughly 0.34-acre former library site), the number of on-site parking spaces (22), traffic and one-lane access roads, and the project's reliance on tax credits. Staff and the developer said the plan complies with zoning and the Complete Communities program, that consultants reviewed costs and terms, and that CHW committed to ongoing community engagement. Councilmembers asked staff to correct resolution language referencing a sale (clarified to be a lease) so Surplus Land Act requirements are met; the city attorney said staff would file a corrected resolution after the vote if necessary.

Councilmember Campillo moved staff's recommendation for the DDA and ground lease; the motion passed unanimously (9-0). The related $4 million Bridge to Home loan (S402) likewise passed 9-0.