Posted on: September 21, 2022
The $13.5 million loan will come from the city’s Housing Impact fund
A rendering of the proposed Terra Bella Apartments. Rendering courtesy city of Mountain View.
A proposed affordable housing project on Terra Bella Avenue in Mountain View now has a financial commitment from the city, bringing the 108-unit development one step closer to fruition. The apartment complex will be reserved for extremely low-income households.
The city council voted unanimously at a Sept. 13 meeting to loan $13.5 million in Housing Impact funds to the project, $1.3 million of which will be used for pre-development and appropriated now ($1 million for Alta Housing and $300,000 for city staff time and consultant services, including environmental review, parking studies and other special studies for the project). According to the council report, the city currently has a balance of over $50 million in housing funds available, so there’s more than enough available to fulfill the loan.
The project, located at 1020 Terra Bella Ave., will be the third affordable housing project sponsored by Alta Housing to have tapped into the city’s Notice of Available Funding (NOFA) process. NOFA funds are available on a first-come, first-served basis for affordable housing projects proposed in the city and have allowed hundreds of affordable units to be built in Mountain View since 2015.
The Terra Bella Apartments will be six stories high, thanks to the state density bonus, and will serve extremely low-income households earning between 30 to 60% of the area median income, said Deanna Talavera, the city’s new senior housing officer.
“And what really makes this project special is the inclusion of much needed family sized units,” Talavera said at the Sept. 13 meeting. “It will provide 28 two-bedroom units and 27 three-bedroom units.”
Compared to other affordable housing projects that have been subsidized by the city, the Terra Bella Apartments have one of the lowest per unit subsidies, at $125,000 city dollars per unit. The last Alta Housing sponsored project, for instance – the Luna Vista Apartments completed in 2021 – utilized about $320,000 in city funds per unit. And because the Terra Bella Apartments have a high proportion of two- and three-bedroom units, the city subsidy per bedroom is by far the lowest among all the city’s NOFA projects, at about $70,000 per bedroom.
The city loan is just one piece of the funding puzzle that Alta Housing is putting together for the project, which includes about $50 million from the federal Low Income Housing Tax Credit program, $22 million from state sources, a conventional bank loan of about $12 million and $13 million in Measure A funding from the county. Approved by voters in 2016, Measure A is a $950 million affordable housing bond that allows Santa Clara County to partner with cities to build more affordable housing.
Per a memorandum of understanding between Mountain View and the county over Measure A, if the city contributes more funds than the county, the city will have the option to own the site. Talavera said the city will seek to obtain ownership of the land as part of the loan agreement.
With all the funding sources taken together, the total cost of the project will be in the ballpark of $110 million, bringing the total per unit cost to approximately $1 million per unit.
During public comment, community member Bruce England brought up concerns about whether the existing pedestrian and bicycle infrastructure on Terra Bella Avenue will be able to sustain the large increase in residents that the apartments will bring to the area.
“… The street is not very friendly for bicyclists, which means bicyclists tend to want to go up on the sidewalk, which means that compromises pedestrian travel,” England said.
After Councilmember Margaret Abe-Koga asked staff to address England’s concerns, Public Works Director Dawn Cameron said the city’s capital improvement program includes funding for a feasibility study to add bike lanes along Terra Bella.
“We are just waiting until we have the staffing capacity to start that project,” Cameron said. “We’re estimating we’ll probably start that by next spring or summer.”
Councilmember Pat Showalter, who serves on the council’s NOFA subcommittee, commended the project for catering to family-sized households.
“Many of our affordable housing stock is just one bedroom or studios, but we have a lot of families who need affordable housing,” she said. “So having such a high number of two- and three-bedroom apartments is a great thing.”
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