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Small affordable housing project saved by city loan

By Gennady Sheyner, Palo Alto Online, January 19, 2020

“A 59-unit residential development, entirely of below-market-rate units, won unanimous approval a year ago, becoming the first affordable-housing project that Palo Alto has approved since 2013. [But the development] failed to receive a $10 million HCD grant that it had requested.

“Given the funding shortfall for the project, which has an estimated price tag of $46.3 million, the city council was asked to fill the gap. On January 13, it did just that, voting unanimously to approve a $10.5-million loan for [the El Camino Real project] Wilton Court. …

“The development will target residents with incomes between 30 percent and 60 percent of area median income — less than $70,260 for a family of two. Monthly rents in the development will range from $659 for a one-person studio to $1,442 for a one-bedroom apartment for two people. The project also includes 21 units for adults with developmental disabilities.

“The council’s vote makes Palo Alto by far the largest financial contributor to the development, with a total investment of $20.5 million. …

“Sheryl Klein, chairwoman of the Palo Alto Housing board of directors, lauded the council’s action. ‘It’s extraordinary what they’ve done, really incredible.’ …

“Palo Alto’s $20.5 million contribution will come primarily from impact fees the city charges developers. This includes $11.7 million from commercial fees, $0.6 million in residential impact fees, and $7.7 million from residential in-lieu fees, which are paid by housing developers who wish to avoid the city’s inclusionary-zoning requirements.

“Under the terms of the loan, the funding will be repaid after the development is built through payments made from any residual receipts beyond the project’s operating expenses.”

Read more about this project here.

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