EMERYVILLE — A 100% affordable housing development in Emeryville has hit a series of roadblocks for years now. City officials just granted the developer a $12.8 million loan to push it past the finish line.
Since 2020, nonprofit development firm EAH Housing has been seeking necessary funding and approvals to build a 68-unit housing site at 4300 San Pablo Ave. The development would be targeted toward low-income seniors and transitional age youths.
As currently proposed, the site would include studio, one-bedroom and two-bedroom units that would be affordable to people earning between 30% and 60% the area median income, or about $32,700 to $65,400 annually, with rents set between $731 to $1,553 a month.
The proposal was pushed for and backed by the city which sought out a developer and contributed land and a $2.5 million Alameda County Measure A-1 grant to the project. It also led to legislative change: Senate Bill 591, which reversed a state regulation that wouldn’t allow tax credits for senior housing to go to senior housing developments that serve other groups.
Despite strong backing from the city, the growing cost of construction and limited funding sources made it challenging for EAH Housing to see the project through, said Economic Development and Housing Manager Valerie Bernardo during a council meeting Tuesday.
More specifically, EAH Housing has been unable to access project based vouchers, key subsidies used to underwrite affordable housing projects, through the Housing Authority of Alameda County, which is preparing for a funding shortfall, Bernardo said.
“That’s the only way a project serving that low level of income can move forward,” Bernardo said. “Without project based vouchers, the project can’t support any debt.”
Without the vouchers, Bernardo said an earlier project goal of providing units at 20% the area median income was infeasible and needed to be increased to the 30% now being proposed. But doing so has potentially put the $2.5 million Alameda County Measure A-1 grant in jeopardy given that a project is required to offer 20% of its units at or below 20% the area median income levels, she said.
Further challenging the project is an 8% increase in construction costs between 2020, when cost assumptions were first made, and 2025. The project site is also no longer in a federal Housing and Urban Development-designated Difficult Development Area, meaning it’s no longer eligible for a 130% federal and state tax credit boost.
The California Department of Housing and Community Development has also removed the ability for projects seeking funding through the Multifamily Housing Program to receive an extra $25,000 per unit if at least 45% of the units are for special needs populations, Bernardo said, noting the Multifamily Housing Program is also expected to run out of funding by the end of the year with no assurance it will be replenished.
Those funding issues would be overcome by a $12.8 million loan from Emeryville’s Development Opportunities Program and the Special Needs Housing Opportunity program. About $2.6 million could be reduced from the loan if the county agrees to waive the 20% average median income requirement, allowing the developer to retain its Measure A-1 Bond funds.
Councilmembers thanked staff for identifying solutions that would move forward a project Councilmember Courtney Welch called “very necessary,” particularly at a time when a growing number of seniors and young people are facing housing insecurity.
“We’ve seen it not necessarily in Emeryville but across the region that when the funding trials and tribulations, as they feel like, come through, many cities hit a wall and they just abandon the project,” Welch. “This is something that is necessary, something we promised to our community.”
While in support of issuing the loan, Councilmember Kalimah Priforce said the city had “fallen short” of its promise to offer units for rent at 20% the area median income, a feature of the initial proposal. He shared appreciation that people in that income bracket would still be considered for units in the 30% area median income bracket, but said he’d also be monitoring to ensure that’s true.
If EAH Housing is able to access project based vouchers, they’d be required to make a good faith effort to provide at least 20% of units at 20% area median income, Bernardo said.
“It’ll be on paper, but the actual process of it may not look like what we need, what we want, what we desire,” Priforce said. “It is something I’d like to take a look at as this develops to make sure that’s being honored.”