Belmont OKs affordable development cost increases

The city has an established Affordable Housing Fund, from which the financing will draw. But the loan is unique in that, in effect, it acts more as a grant. Only once the project’s revenue exceeds its operating budget will the developer begin to pay back the loan, at which point it will have a 3% interest rate.

“[Affordable housing developers] absolutely cannot accept the funding as a grant. It has to be a loan, even though repayment is unlikely to happen in full, and it will be a very limited amount,” Assistant City Manager Kathy Kleinbaum said.

The project will also secure funding from the county and state tax credits. 

But Councilmember Thomas McCune said the loan terms were not favorable for the city and declined to vote in favor of moving forward.

“I’m not inclined to vote for this, because I don’t like developers pulling this at the last minute. They can get the money somewhere else, and we can loan the million dollars to other people for other projects,” he said. 

Despite the project’s financial hiccups, the remainder of councilmembers’ will to move forward on the development is a strong indication that the most recent cycle of cities’ Regional Housing Needs Allocation — a state-mandated number of new units a city must plan for over an eight-year cycle — is higher and comes with more state scrutiny compared to previous cycles. The entire development will comprise what is considered very-low income or low-income units, per RHNA standards. The city needs to plan for at least 1,785 new housing units by 2031, with roughly 30% going toward those making less than 50% of the area’s median income. 

“We desperately need affordable housing. This is something that will not only make Belmont more beautiful but provide that housing, and I want our city to 100% support this in any way we can,” Councilmember Gina Latimerlo said.