Fremont City Council Meeting: 04/21/26 07:00 PM
3300 Capitol Avenue Div/Dept: Housing
Fremont, CA 94538 Category: Affordable Housing
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5669) DOC ID: 5669
Updated: 4/17/2026 11:16 AM by Dina Lewis Page 1
ADOPT A RESOLUTION APPROVING ADDITIONAL FUNDING FOR THE THORNTON & POST APARTMENTS PROJECT – Approval of Additional Affordable Housing Funding for the Thornton & Post Apartments Project and Making Findings of CEQA Exemption
Contact Persons:
Name: Lucia Hughes Joel Pullen
Title: Housing Manager Community Development Director
Div/Dept: Housing Community Development
Phone: 510-494-4506 510-494-4436
E-Mail: [email protected] [email protected]
Executive Summary: Resources for Community Development (RCD) currently manages the development of the Thornton & Post Apartments project (formerly known as 3900 Thornton Avenue Apartments). On November 2, 2021, the City Council appropriated $7,600,000 and approved an acquisition and pre-development loan agreement to RCD. At that time, staff stated that once RCD could demonstrate project readiness for construction, staff would return to Council for the appropriation of balance of funding in the amount of $9,676,908 for the financing of the construction phase of the project.
The City recently received a request from RCD for $1,500,000 in additional construction phase funding to resolve a gap resulting from a nationwide drop in the value of low-income housing tax credits. While it has been determined that the project is facing a financing gap, staff has asked RCD for additional information to ascertain the size of the gap. Due to timeliness concerns, staff recommends that the City Council authorize the City Manager to execute loan documents and appropriate the additional funding of up to $1,500,000, totaling up to $11,176,908 to the project. The not-to-exceed amount would provide staff with flexibility to decrease the $1,500,000 authorized loan amount as deemed appropriate to fill the gap. The additional funds will come from the Affordable Housing Development Fund 196.
Background: RCD is a nonprofit affordable housing developer based in Alameda County. For the past 40 years, RCD has provided high-quality housing for low-income people in over 26 cities in the Bay Area, Northern California. Their model integrates housing with social services and addresses affordability by focusing on people whose income is between 20% and 60% of Area Median Income (AMI).
Council Staff Report (ID # 5669) Meeting of April 21, 2026 Updated: 4/17/2026 11:16 AM by Dina Lewis Page 2
Under the 2021 Notice of Funding Availability (NOFA), RCD proposed a 100% affordable multi-family housing development at 37027 Post Street and requested $17,276,908 in City financial assistance for land acquisition, pre-development and construction. On November 2, 2021, the City Council approved an acquisition and pre-development loan to RCD and appropriated $7,600,000 for the project. At that time, staff stated that once RCD could demonstrate project readiness for construction, staff would return to Council for the appropriation of balance of funding in the amount of $9,676,908 for the construction loan.
Discussion/Analysis: The Thornton & Post project will provide 115 new apartments for families and individuals, with one unrestricted manager’s unit (116 total). Located near the Fremont-Centerville ACE/Amtrak station and AC Transit bus lines, this development will provide residents with access to parks, schools, and other local and regional amenities. Studios, 1-, 2- and 3-bedroom units will be available in this development for people earning between 20% and 60% AMI. Ten units will be subsidized by HUD Section 811 and set aside for very low-income and extremely low-income adults with disabilities, ages 18-61. Onsite amenities will include a large 2-level courtyard space, community room, and secure bicycle parking.
Resident services and case management will be provided directly onsite to residents on a voluntary basis, free of charge. The building features up to 102 parking spaces. The corner of the ground level will include a 1,398 square-foot commercial space.
The costs of the project total approximately $98 Million. A large part of the project cost is proposed to be financed through multi-family housing revenue bonds, with Low Income Housing Tax Credits as another principal funding source. Construction financing will also include the following funding sources: City of Fremont, Housing Trust Silicon Valley, Alameda County, Affordable Housing and Sustainable Communities, the Department of Toxic Substances Control, California Public Utilities Commission, General Partner, and Equity.
The pre-development period of the project has been prolonged because of the extremely competitive nature of the state’s tax-exempt bond market.
The City loan stipulated a construction start date by September 28, 2025.
On September 9, 2025, the City Council approved the extension of the loan term to September 28, 2027.
After five rounds of tax-exempt bond applications, the project received Tax Credit and Bond commitments in December 2025, which stipulated a Council Staff Report (ID # 5669) Meeting of April 21, 2026 Updated: 4/17/2026 11:16 AM by Dina Lewis Page 3
construction start date in June 2026. In February 2026, RCD formally requested that the City consider filling a remaining $1,500,000 financing gap resulting from a nationwide drop in the value of low-income housing tax credits. The value of tax credits has fallen from $0.95 in 2022 to $0.85 in 2026. In addition, interest rates on construction loans have risen over two percentage points since 2022, resulting in an estimated $4 Million more in interest for project construction. Although inflation, supply chain disruptions and tariff uncertainties have resulted in higher costs to the project, RCD has been able to limit the impact to up to $1.5 Million with value engineering savings and cost containment.
RCD submitted the revised financial proposal, detailed Uses and Sources of funds, a copy of their Low Income Housing Tax Credit application to the State Tax Credit Allocation Committee, and other supporting documents as part of their request for additional funding. The documents were reviewed and analyzed by the City’s financial consultant, Mosaic Urban Development, a firm that specializes in affordable housing finance. The consultant has determined that the project is facing a funding gap, however additional information is needed to ascertain whether the gap requires the full additional $1,500,000 from the City as the project move forward in a dynamic market. Additional information has been requested from RCD. Due to timing to meet various milestones to start construction in June 2026, staff is recommending up to $1,500,000 in additional funding for this project to provide staff with the flexibility to decrease the loan amount administratively should the subsequent financial analysis make this determination.
Staff recommends the City Council approve additional funding in an amount up to $1,500,000 for the Thornton & Post affordable housing development.
There is sufficient funding available in the Affordable Housing Fund (Fund 196) for this action. It would bring the City’s total contribution to $18,776,908 or $163,277 per unit subsidy, which is still competitive with the City’s other per-unit affordable housing contributions as part of the Notice of Funding Availability (NOFA).
Fiscal Impact: There are sufficient funds available for this appropriation in Fund 196. Additionally, the City received an award of $5,000,000 award in State Local Housing Trust Fund (LHTF) funding. On May 17, 2022, the City Council approved the use of this funding to finance the development of the Thornton & Post project. Up to $5,000,000 of the City’s $11,176,908 contribution for construction will be offset by LHTF. The use of LHTF reduces City funding for the project, allowing City funds to be redirected to other projects in the future.
Council Staff Report (ID # 5669) Meeting of April 21, 2026 Updated: 4/17/2026 11:16 AM by Dina Lewis Page 4
Environmental Review: The Thornton & Post Apartments affordable housing development project satisfied all the eligibility requirements to qualify for processing under Government Code Section 65913.4, commonly known as Senate Bill (SB) 35. Accordingly, pursuant to SB 35, the project was subject to ministerial review and then approved on
September 22, 2022. The project was found to be exempt from the California Environmental Quality Act (CEQA) pursuant to, without limitation, CEQA Guidelines Sections 15268 and 15369 (ministerial project) and was classified as "not a project" under CEQA. In addition, the proposed additional funding for the project and loan agreement are exempt from CEQA as it does not constitute a project within the meaning of CEQA, without limitations, in accordance with CEQA Guidelines Section 15378(b)(2), (4) and/or (5) and/or 15061(b)(3), each as a separate and independent basis.
ATTACHMENTS:
• Draft Resolution-Thornton Additional Funding
Recommendations:
1. Adopt a Resolution authorizing the City Manager, or her designee, to amend the existing loan documents to add up to $1,500,000 for a total of $11,176,908 in funding to the project, and take such other actions as required to increase the total loan amount to $18,776,908 to Resources for Community Development, and making findings of CEQA exemption; and,
2. Appropriate an additional $1,500,000 from the Affordable Housing Development Fund (Fund 196) for the Thornton & Post project.