San Jose Welcomes New Affordable Apartment Complex
Jemcor Development Partners and Pacific Housing Acquire Land for $11.7M Affordable Apartment Complex in San Jose
Jemcor Development Partners and Pacific Housing have finalized the purchase of two lots in Downtown San Jose for $11.7 million. The acquired land will be used for the construction of a 300-unit affordable apartment complex. The California Municipal Finance Authority has provided substantial support by offering $107 million in construction financing, including $75 million in tax-exempt bonds. Designed by KTGY, the eight-story building will cater to families earning less than 30%, 50%, and 60% of the area median income, with an expected completion date set for fall 2026. Moreover, Jemcor has disclosed plans for twin 10-story apartment buildings in San Bruno and secured a $108 million loan for a 271-unit affordable apartment complex in south San Jose in collaboration with Pacific Housing.
Key Takeaways
- Jemcor Development Partners and Pacific Housing secure $107 million for 300 affordable apartments in Downtown San Jose
- Acquisition of development sites at 950 and 970 West Julian Street for $11.7 million
- Inclusion of 7,700 sq ft interior space, parking for 85 cars, and storage for 75 bicycles in the plans
- Majority of units designated for low-income households, with 15 units each for very-low and moderate income
- Anticipated project completion by fall 2026, following the proposal for twin 10-story buildings in San Bruno
Analysis
The recent acquisition of two lots in Downtown San Jose by Jemcor Development Partners and Pacific Housing signifies a dedicated effort toward providing affordable housing solutions for low-income individuals and families. The substantial support from the California Municipal Finance Authority, including tax-exempt bonds, reinforces the state's commitment to fostering affordable housing initiatives. While this development will undoubtedly benefit local low-income families, it may also place strain on San Jose's existing resources and infrastructure. Over the long term, this ambitious project has the potential to inspire similar developments, transforming urban landscapes and recalibrating income distribution dynamics. With the availability of financial tools like tax-exempt bonds, other cities and developers might be encouraged to adopt a similar approach, potentially initiating a broader trend prioritizing affordable housing across the nation.
Did You Know?
- California Municipal Finance Authority (CMFA): A non-profit organization that offers financing solutions for California's public agencies, non-profit organizations, and private businesses. The CMFA issues tax-exempt and taxable bonds to fund projects, such as affordable housing, healthcare facilities, and infrastructure. The tax-exempt status of these bonds enables borrowers like Jemcor and Pacific Housing to secure funding at reduced interest rates compared to conventional loans.
- Tax-exempt bonds: These are a category of municipal bonds that are exempt from federal income taxes and, in some instances, from state and local income taxes as well. These bonds are frequently used to support affordable housing projects, as they provide lower interest rates, making it more economical for developers to construct and maintain affordable housing units. In this specific case, the CMFA issued $75 million in tax-exempt bonds for the construction of the 300-unit affordable apartment complex.
- Area Median Income (AMI): A metric utilized by the U.S. Department of Housing and Urban Development (HUD) for evaluating eligibility in housing assistance programs. AMI represents the midpoint of the income spectrum for a particular area, typically in metropolitan regions. In the context of this development, the apartment complex will cater to families earning less than 30%, 50%, and 60% of the area median income, ensuring a diverse array of affordable housing options for low-income and very-low-income households.