TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: Erik L. Soliván
Jim Shannon
SUBJECT: See Below DATE: September 15, 2025
Approved
Date:
9/22/2025
COUNCIL DISTRICT: 3
SUBJECT: Actions Related to the East Santa Clara Senior Affordable Housing Development Located at 675 East Santa Clara Street
RECOMMENDATION
(a) Adopt a resolution:
(1) Approving a Construction-Permanent Loan commitment of up to $6,800,000 in Low-and Moderate-Income Housing Asset Funds and Real Property Transfer Tax Funds to Eden Housing, Inc. or an affiliated development entity for the East Santa Clara Senior affordable housing development; and
(2) Authorizing the Director of Housing, or his designee, to negotiate and execute loan documents and all other documents, including any amendments thereto, related to City of San José financing for the East Santa Clara Senior affordable housing development.
(b) Adopt the following 2025-2026 Appropriation Ordinance amendments in the Real Property Transfer Tax Fund:
(1) Decrease the Measure E – 40% Extremely Low-Income Households Reserve by $5,000,000; and
(2) Increase the Measure E – 40% Extremely Low-Income Households Appropriation to the Housing Department by $5,000,000.
(c) Adopt the following 2025-2026 Appropriation Ordinance amendments in the Low and Moderate Income Housing Asset Fund:
(1) Decrease the Housing Project Reserve by $1,800,000; and (2) Increase the Housing Loans and Grants Appropriation to the Housing Department by $1,800,000.
COUNCIL AGENDA: 10/7/25
FILE: 25-1068
ITEM: 8.1
HONORABLE MAYOR AND CITY COUNCIL
September 15, 2025
Subject: Actions Related to the East Santa Clara Senior Affordable Housing Development Located at 675 East Santa Clara Street
SUMMARY AND OUTCOME
In response to the Housing Department’s rolling Request for Proposals released on April 14, 2025, Eden Housing, Inc. (Eden) submitted a proposal to develop the East Santa Clara Senior affordable housing development (Development), creating a total of 67 homes for extremely low-, very low-, and low-income seniors 1 and one manager’s
unit on a 0.76-acre County of Santa Clara (County)-owned site located at 675 East Santa Clara Street, San José, CA 95112.
Approval of the staff recommendation would enable Eden to assemble the financing for the Development and move forward with the closing of construction financing.
BACKGROUND
On April 25, 2019, the County, in collaboration with the Santa Clara County Housing Authority, published the East Santa Clara Master Plan.
2 The master plan spans across
12 acres on East Santa Clara Street between 14th Street and 17th Street and will consist of over 550 residential units, 320,000 square feet of office space, and 5,200 square feet of retail space, with the goal of creating a highly integrated mixed-use project that promotes health and wellness in the community. The County owns seven acres of the master plan area, and the Santa Clara County Housing Authority owns the remaining five acres. In December 2020, the County issued a Request for Offers to develop affordable housing on its land and selected Eden’s proposal for a portion of the master plan. The County intends to develop the remaining County-owned land into affordable large family housing and affordable for-sale townhomes.
Table 1 provides a detailed summary of the City of San José’s (City) proposed funding commitment to the Development and the overall cost of the Development.
1 For the general non- U.S. Department of Housing and Urban Development assisted units, the East Santa Clara Senior development defines “senior” as an individual who is 55 years of age or more at the time of initial occupancy.
2 Final East Santa Clara Master Plan.
Weblink:https://files.santaclaracounty.gov/migrated/East%20Santa%20Clara%20Master%20Plan.pdf
HONORABLE MAYOR AND CITY COUNCIL
September 15, 2025
Subject: Actions Related to the East Santa Clara Senior Affordable Housing Development Located at 675 East Santa Clara Street
Table 1 – Summary of City Funding and Cost for the East Santa Clara Senior Development
Development
Name
City Loan
Request
City
Subsidy
Per Unit
Total
Units
Project
Based
Voucher
Total
Development
Cost
Cost/Unit
East Santa
Clara Senior $6,800,000 $100,000* 68 20 $53,225,817 $782,733 *The U.S. Department of Housing and Urban Development Section 202 Supportive Housing for the Elderly Program Capital Advance funds received by the Development significantly lower the City’s per- unit subsidy funding.
ANALYSIS
Development Description
This Development will provide housing for seniors in a new four-story building with three levels of residential units over a podium garage. Next to the Development is the historically significant Building 800
3 that will be utilized as an amenity center to serve
the residents and the community in the area. The amenity center will include a communal kitchen with a food distribution program.
If the staff recommendation is approved, the City will place an affordability covenant on the site for a term no shorter than 55 years, as part of the requirements of the City’s funding. The affordability restriction will not be subordinated to any deeds of trust or instruments with a power of sale. The County will ground lease the site to Eden or an affiliated development entity. The City’s Deed of Trust will be recorded against the County’s leasehold.
Table 2 provides a detailed summary of the Development’s maximum income and rent limit unit mix.
3 Building 800 (Temple Laundry/IBM Building 800 Structure) is listed on the City’s Historic Resources Inventory List and is an industrial building constructed in 1919 with additions made in 1920 and 1928. A 2008 historic study of the building determined the structure as eligible to be listed as a historic resource and a California landmark.
HONORABLE MAYOR AND CITY COUNCIL
September 15, 2025
Subject: Actions Related to the East Santa Clara Senior Affordable Housing Development Located at 675 East Santa Clara Street
Table 2 – Summary of East Santa Clara Senior Development’s Maximum Income and Rent Limit Unit Mix
UNIT
SIZE
30% Area Median
Income
50% Area Median
Income
60% Area Median
Income MGR
UNIT TOTAL
Units Max.
Income *
Rent
Limits Units Max.
Income*
Rent
Limits Units Max.
Income*
Rent
Limits
1-BD 20 $45,225 $1,130 43 $73,375 $1,884 4 $90,450 $2,261 0 67 2-BD N/A N/A N/A N/A N/A N/A N/A N/A N/A 1 1
Total 20 43 4 1 68
*Maximum rent and income limits are based on California Tax Credit Allocation Committee occupancy guidelines of 1.5 persons per bedroom.
Development Financing and Assistance
U.S. Department of Housing and Urban Development (HUD) Section 202 Program
HUD has awarded Eden a $5,877,717 Capital Advance under the Section 202 Supportive Housing for the Elderly
4 Program for development funding, in addition to
rental assistance for 43 units serving very low-income seniors earning up to 50% Area Median Income (AMI). The Capital Advance does not require repayment, provided the units remain available to low-income seniors for at least 40 years. In addition, Eden will enter into a Project Rental Assistance Contract Agreement with HUD to provide rental assistance for the 43 units. The initial term of the agreement is 20 years, with a potential option to extend the term for at least five years, subject to funding availability.
Additionally, the Santa Clara County Housing Authority has committed to providing 20 Project-Based Vouchers to support extremely low-income homeless seniors earning up to 30% AMI. Eden will enter a Housing Assistance Payment Contract with the Santa Clara County Housing Authority with an initial term of 20 years and a potential option to extend the term up to 20 additional years. Refer to Table 3 to view the details of the Development’s assisted unit mix.
4 Consistent with HUD, occupancy in Section 202 housing is open to any very low-income household composed of one or more persons, one of whom is 62 years of age or more at the time of initial occupancy.
HONORABLE MAYOR AND CITY COUNCIL
September 15, 2025
Subject: Actions Related to the East Santa Clara Senior Affordable Housing Development Located at 675 East Santa Clara Street
Table 3 – Details of East Santa Clara Senior Development’s Assisted Unit Mix
ASSISTANCE PROGRAM UNIT SIZE AMI LEVEL UNITS
HUD Section 202 Project Rental Assistance
Contracts 1-Bedroom 50% AMI 43
Permanent Supportive Housing Project- Based
Vouchers 1-Bedroom 30% AMI 20
Total 63
Table 4 provides a detailed summary of the Development’s funding sources and uses for the construction and permanent phases.
Table 4 – Summary of Development’s Funding Sources and Uses
Construction Period Sources Entity Construction Period Amounts
% of Total
Development Cost
Tax Exempt Construction Loan Private $9,880,000 19.5%
Taxable Construction Loan Private $22,257,864 43.9%
Bay Area Housing Innovation
Fund Construction Loan Private $1,300,000 2.6%
County of Santa Clara Measure
A/Local Housing Trust Fund Public $8,300,000 16.4%
City of San José Public $6,800,000 13.4%
Federal Tax Credit Equity Public $2,125,000 4.2%
Total $50,662,864 100%
Permanent Sources Entity Permanent Amounts % of Total
Development Cost
Tax-Exempt Permanent Loan Private $9,880,000 18.6%
Bay Area Housing Innovation
Fund Mezzanine Loan Private $1,300,000 2.4%
HUD Section 202 Capital
Advance Public $5,877,717 11.0%
County of Santa Clara Measure
A/Local Housing Trust Fund Public $8,300,000 15.6%
City of San José Public $6,800,000 12.8%
Federal Tax Credit Equity Public $21,068,100 39.6%
Total $53,225,817 100%
HONORABLE MAYOR AND CITY COUNCIL
September 15, 2025
Subject: Actions Related to the East Santa Clara Senior Affordable Housing Development Located at 675 East Santa Clara Street
Next Steps
If the allocation is received when the California Tax Credit Allocation Committee announces awards on September 30, 2025, the City will facilitate a construction financing closing by April 2026. If Eden is unable to obtain an allocation of tax credits from the California Tax Credit Allocation Committee to close all funding gaps, it will seek an allocation in a future round at a to-be announced date. The Development’s construction phase is estimated to initiate by May 2026 and conclude approximately 18 months later.
If the staff recommendation is approved, the Housing Director, or his designee, will negotiate additional terms and execute documents for this Development’s loan in accordance with the City Council’s approval using the authority delegated under Section
5.06.335 of the San José Municipal Code.
5 EVALUATION AND FOLLOW-UP
The Housing Department posts a dashboard on the status of its affordable properties undergoing rehabilitation or construction on its website. 6 If the recommended actions in
this memorandum are approved and the Development successfully closes construction financing, the Development will be included in the dashboard.
COST SUMMARY/IMPLICATIONS
The recommendations in this memorandum would provide a construction-permanent loan commitment of $6.8 million to Eden or an affiliated development entity for the East Santa Clara Senior development. The loan will be funded by Real Property Transfer Tax Funds ($5.0 million) and by Low- and Moderate-Income Housing Asset Funds ($1.8 million).
5 Section 5.06.335 of the San José Municipal Code is the authority to negotiate and execute council- approved loans, grants, and programs.
6 Housing Department Affordable Properties Webpage, Web Link: https://www.sanjoseca.gov/your- government/departments-offices/housing/homelessness-program-dashboard
HONORABLE MAYOR AND CITY COUNCIL
September 15, 2025
Subject: Actions Related to the East Santa Clara Senior Affordable Housing Development Located at 675 East Santa Clara Street
BUDGET REFERENCE
The table below identifies the funds and appropriations to fund the loan recommended as part of this memorandum.
Fund
#
Appn.
#
Appropriation
Name
Total
Appropriation
Rec. Budget
Action
Amount for
Loan
2025-2026
Proposed
Operating
Budget
Page*
Last
Budget
Action
(Date, Ord.
No.)
404 8744
Measure E -
40%
Extremely
Low-Income
Households
Reserve
$31,436,761 ($5,000,000) N/A 934 6/17/2025
31230
404 224L
Measure E -
40%
Extremely
Low-Income
Households
$21,969,800 $5,000,000 $5,000,000 934 6/17/2025
31230
346 8437
Housing
Project
Reserve
$33,000,000 ($1,800,000) N/A 906 6/17/2025
31230
346 0070
Housing
Loans and
Grants
$28,453,610 $1,800,000 $1,800,000 906 6/17/2025
31230
*The 2025-2026 Adopted Operating Budget was approved on June 10, 2025 and adopted on June 17, 2025 by the City Council.
COORDINATION
This memorandum has been coordinated with the City Attorney's Office.
PUBLIC OUTREACH
This memorandum will be posted on the City’s Council Agenda website for the October 7, 2025 City Council meeting.
In addition, Eden has conducted various community outreach initiatives since December 2021, including a community meeting to introduce the Development to key stakeholders in the community, three community workshops to refine the Development’s vision, and a focus group to gain insights from the community on design ideas and lived experiences.
HONORABLE MAYOR AND CITY COUNCIL
September 15, 2025
Subject: Actions Related to the East Santa Clara Senior Affordable Housing Development Located at 675 East Santa Clara Street
COMMISSION RECOMMENDATION AND INPUT
No commission recommendation or input is associated with this action.
CEQA
Exempt pursuant to Public Resources Code section 21080(b)(1) and CEQA Guidelines section 15369, Ministerial Project pursuant to Government Code section 65913.4, File No. ER20-109.
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
/s/
ERIK L. SOLIVÁN JIM SHANNON
Housing Director Budget Director
For questions, please contact Banu San, Deputy Director, Housing Department, at [email protected].