Housing for workers: Agency will turn 186-room Modesto hotel into apartments
The Stanislaus Regional Housing Authority has purchased the Clarion Inn Conference Center and will renovate the 186-room Modesto hotel into studio apartments for retail workers, restaurant servers and other moderate-income workers.
Housing Authority Executive Director and CEO Barbara Kauss said this is the first project of its kind in Stanislaus County that provides housing for workers who earn too much for traditional affordable housing but struggle to pay for market-rate housing.
A government or nonprofit subsidizes — pays part or all of the rent — in traditional affordable housing. There is no such help in market-rate housing. But the Housing Authority will rent these market-rate apartments at the lower end to make them affordable. The project also helps address the critical shortage of studio apartments in Modesto.
“We are trying to address this gap in affordable housing in our community,” Kauss said in an interview, adding she and other Housing Authority officials hear too many stories of people renting closets, garages, backyard sheds and other spaces not meant for living because they cannot afford an apartment.
Modesto, like the rest of California, faces an affordable housing crisis. A 2018 report concluded Stanislaus County needed nearly 20,000 more apartments and other affordable housing to meet the needs of its low-income renters.
This project provides what is called workforce housing. Besides being affordable it is close to jobs. The 1970s-era hotel on Sisk Road near Briggsmore Avenue is surrounded by restaurants, big-box retailers and stores and is a two-mile walk to Vintage Faire Mall.
But workforce housing is just one piece of the Housing Authority’s plans for the hotel, which longtime residents may remember was a Holiday Inn and then a Red Lion before its final incarnation as a Clarion Inn.
The authority will use one wing of the hotel for its administrative offices as it relocates its employees from its current 71-year-old administrative offices in west Modesto. The new offices will be more centrally located for Housing Authority clients. The authority provides housing for about 7,000 households in Stanislaus and several surrounding foothills counties.
It also will build a 16,000-square-foot building in the hotel’s back parking lot for its maintenance operations. The authority expects to relocate about 85 employees to the Sisk Road site. The authority will convert 142 hotel rooms into studio apartments and the hotel’s eight suites into one-bedroom apartments. Kauss said the apartments could provide housing for 200 to 250 people.
Rental cottages for seniors
The authority expects to bring in micro businesses operating kiosks in the former hotel’s courtyard, bring in someone to run the hotel restaurant, which could offer culinary training, and rent out the former hotel’s grand ballroom and conference rooms for such events as weddings, reunions and business meetings.
Kauss said within a few years the authority wants to build about two dozen small cottages on the couple of acres at the site that now include tennis and basketball courts. The cottages would be rentals for retirees who have too much income to qualify for traditional affordable housing but cannot afford market-rate housing.
She said the goal is to create a campus that supports the tenants as well as the surrounding area. The Housing Authority has renamed the hotel property The 1612 — Micro Community. The numbers refer to the property’s address, 1612 Sisk Road.
The timeline is for the renovation of the administrative offices and the building of the maintenance facility to be completed by December, and the renovation of the apartments to be completed by December 2021.
The Housing Authority purchased the hotel from the Khatri Bros. Limited Partnership and Khatri Inc. for $13.5 million. The renovations are expected to cost $7.64 million. The authority will pay for the project through a loan from F&M Bank and from its reserves.
Rent includes all utilities
Kauss said the project’s finances are based on the tenants’ rent paying the project’s costs and not from income from renting the ballroom and conference rooms and the other business ventures.
She said tenants would need to make 80 percent to 140 percent of the area’s median annual household income of roughly $54,000 to qualify. She said a studio could rent for $850 a month.
That may seem high, but Kauss said the rent covers all of the utilities — including Wi-Fi, cable and power — which could cost about $150 a month, making the rent more like $700 a month. And she said the apartments will come with washer-dryer units, kitchenettes and what is called a Murphy bed, which folds into the wall when not in use.
For some context, RentCafe, a nationwide apartment search website, has reported the average rent for a Modesto apartment was $1,281 in February. That is a blended average of studio, one-, two- and three-bedroom apartments in complexes with at least 50 apartments.
The Housing Authority project drew praise from the U.S. Department of Housing and Urban Development, U.S. Rep. Josh Harder, D-Turlock, as well as Modesto and Stanislaus County officials and others.
Kansas House for homeless people
“Affordable housing concepts for those earning a paycheck but unable to make ends meet have been endlessly discussed over the years,” Modesto City Councilman Doug Ridenour said in a news release. “This Stanislaus Regional Housing Authority project puts words into action — and ensures quality living space for those who serve as the backbone of our employment force. I applaud their effort and hope this will serve as a road map for selective reuse of existing footprints in our communities.”
This is the second innovative project that the Housing Authority has undertaken recently. In May it opened the Kansas House, a former 103-room Modesto motel it converted into studio apartments with services for residents who had been homeless. It’s a traditional affordable housing project in that the tenants use housing vouchers toward their rent.
Kauss said these projects are the result of a strategic plan the Housing Authority did several years ago to look at how to fill the housing gaps in the community. She thanked her staff and commissioners as well as HUD and the California Affordable Housing Agency, the consulting firm helping the authority, in making this project a reality.
“I am so thrilled about the purchase of the property,” Housing Authority Board of Commissioners Chairman Carlos Estacio said in the news release. “We have worked on this project for over three years and for it come to fruition is a miracle.
“Since Barbara coming on board as the CEO/Executive Director, she and her staff have put Stanislaus Regional Housing Authority on a different level, with even more exciting things to come.”
This story was originally published July 5, 2020 at 5:00 AM.
