City Hall digests affordable housing bulge in Modesto

A surge in affordable housing proposals is working its way through Modesto City Hall at a time new homes aren't being built.

Plans to buy or build the projects with government cash are in development now for a mix of reasons. They range from lower construction costs to the availability of money earmarked for developments that benefit low-income renters or buyers.

"It's just providing an opportunity in our economy for a product that becomes untouchable" in a normal building market, City Councilwoman Janice Keating said.

She leads Modesto's Economic Development Committee, which monitors building proposals. Last week, the group counted 11 projects in some stage of development that would yield 391 apartments or homes for low-income residents.

It should take a few years for all of the projects to come together. The city's housing market could change by then.

In the meantime, Modesto has a renters' market with a 6 percent apartment vacancy rate and stagnant rents averaging $814 a month, according to a July report.

City and county officials say the proposed affordable projects will suit a mix of special needs.

One, for example, would yield 32 apartments on East Coolidge Avenue for working adults who need assistance from the county's Behavioral Services Department. It's being carried by the Stanislaus County Affordable Housing Corp.

Another in the early stages of planning would bring 89 apartments for low-income seniors to Dale Road.

"What you're seeing is a range of housing coming together," said Barbara Kauss, acting director of the Parks, Recreation and Neighborhoods Department.

Affordable housing advocates in Modesto are cost sensitive, particularly because the city's last project cost $360,000 per unit.

The 27-unit Village One Town Center faced high construction costs because its bids came in during the peak of Modesto's building boom. Its builders had to pay prevailing wage to their laborers because the project was developed with government money.

The other yet to be built affordable housing projects also will have to pay prevailing wage, but they might be able to save money on construction and land costs, Kauss said.

Scale could keep prices down for the biggest project, a proposed 150-unit apartment complex on Ninth Street. That proposal, being developed by San Rafael nonprofit group EAH, likely will cost $250,000 per unit.

It's expected to get $6.5 million from Modesto's Redevelopment Agency, which collects an annual property tax that must be spent partly on affordable housing.

Ryan Swehla, EAH's Modesto liaison, said the company anticipates breaking ground next summer. Its rents will be pegged to the county's median income and likely will range from $273 to $738 depending on the resident's income.

The county's median household income is $49,413, according to the latest census data. Renters at the Ninth Street complex could earn up to 55 percent of that sum.

The best bargain for an affordable housing project could come in the form of already built developments.

The Stanislaus County Housing Authority, which oversaw construction at Village One Town Center, recently paid $3.9 million for the Palm Valley apartment complex in Modesto. That price amounted to less than $100,000 per unit.

"I think there's going to be some more opportunities," said Bill Fagan, the housing authority's executive director. "They're like diamonds. You look for ones that'll meet the needs of the community for a long time."

Bee staff writer Adam Ashton can be reached at aashton@modbee.com or 578-2366.