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Council approves $4.5 million loan for 40th & Alpha affordable apartments
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Summary
The council voted unanimously to authorize a $4.5 million residual-receipts loan to Alpha Street Housing LP for the 40th & Alpha Apartments, a 91-unit affordable housing project restricted at 30–60% AMI for 55 years. Council cited the project’s neighborhood location and childcare component.
San Diego’s city council unanimously approved a $4,500,000 loan to Alpha Street Housing LP to support the 40th & Alpha Apartments, a proposed development that would create 91 affordable units restricted at 30%–60% of area median income for 55 years.
Michelle Marano, assistant deputy director for the Economic Development Department, told the council the project will be built on a vacant half-acre city-owned site in the South Crest neighborhood and developed by a partnership controlled by Community Housing Works. Staff described a $4.5 million city loan at 3% simple interest with a 55-year term, a $25,000 developer deposit to cover city costs, and projected total development costs of about $59,000,000. The project would deliver 69 one-bedroom and 22 two-bedroom units, one manager’s unit and a 2,400-square-foot childcare center.
Charles Monica, the independent budget analyst, flagged that the developer still needs to secure roughly $13,000,000 in soft financing before applying for low-income housing tax credits; he said that could delay a tax-credit application and push groundbreaking out, increasing carrying costs for the project. “Some of these sources have not yet been formally secured, which is typical with affordable housing funding,” Monica said.
Council Member Moreno, who moved the staff recommendation, described the project as “an important investment” for a neighborhood adjacent to a park and school and highlighted the childcare component. Council Member Campillo seconded the motion. The council’s roll call passed the loan agreement unanimously (8–0) with Council Member Von Wilbur absent.
Staff noted the city loan equates to roughly $49,000 per apartment and will be leveraged with other sources, including community development block grant funds through the San Diego Housing Commission. City and developer representatives said sources and uses are estimated and will be finalized at closing.
Next steps: the loan authorization allows the mayor to execute the agreement and for staff and the developer to finalize financing. The IBA advised the council it will continue to monitor the project’s remaining unsecured soft sources and potential schedule impacts.
