HOUSING DEPARTMENT
Erik L. Soliván
Housing Director
Banu San
Deputy Director
October 6, 2026 Item 8.1
City Council
ACTION RELATED TO THE AFFORDABLE
HOUSING DEVELOPMENT LOCATED AT
1510 NORTH FIRST STREET
2 NOFA Priorities
10/2/2026
The City’s key priorities for gap financing are to:
• Increase the City’s housing stock supply to all income levels • Fund "shovel ready" developments
Provide gap financing as the last funding source into a development project 1510 North First Street is the third 2025 NOFA Applicant to be awarded • Will increase City of San José's affordable housing stock by converting a former hotel and adding 57 new affordable units serving 30% AMI households • The development received an allocation of Low-Income Housing Tax Credits and is projecting to start construction in December 2026 • The City is providing gap financing of $5.7M, or 18.2% of the total development cost • Motel to Permanent Housing Conversion
• 100% Affordable Extremely Low-Income Housing with supportive services • $5,700,000 City construction-permanent loan commitment • Developer: Santa Clara County Housing Authority
• Santa Clara County Housing Authority: providing $10,666,571 in permanent financing and 57 Project-Based Vouchers to subsidize rents for extremely lowincome households and residents with social services needs • Total public subsidy: $292k per unit
City's subsidy: $98k per unit
• Total private capital: $247k per unit
• Cost of development: $539k per unit
3 Overview
10/2/2026
4 Motel Conversion at 1510 North First
10/2/2026
District 6 Development
Acquisition and rehabilitation of the former Comfort Suites Planned renovations:
• Kitchenettes installed in every unit
• Accessible restroom upgrades and entry ramp modifications • New parking garage gate, flooring upgrades, and other minor repairs Rehabilitation anticipated to complete in ~12 months by Guzman Construction 5 Site Map
10/2/2026
VTA
Lightrail
SureStay
Comfort
Suites
Slide
6 Sources of Funding
10/2/2026
Permanent Sources Funding Type Permanent
Amounts
% of Total
Development
Cost
Santa Clara
County Housing Authority Public $10,666,571 34.1%
City of San José Public $5,700,000 18.2%
Accrued / Deferred Interest Public $552,335 1.8%
Federal Tax Credit Equity
(9%) Private $14,335,100 45.9%
Total $31,254,006 100%
7 Unit and Affordability Mix
10/2/2026
UNIT SIZE
30% AMI
MANAGER
UNIT TOTAL
Units Max Income* Rent Limits
0-BD (Studio) 57 $46,275 $1,156 0 57
2-BD 0 N/A N/A 1 1
Total 57 1 58
(*) Maximum rent and income limits are based on California Tax Credit Allocation Committee occupancy guidelines of 1.5 persons per bedroom.