Construction expected to start soon on affordable rental units in west Modesto
Construction could start as soon as December on two west Modesto affordable housing projects that will provide 34 rental units for seniors, veterans and clients of Stanislaus County Behavioral Health and Recovery Services.
The City Council on Tuesday unanimously approved $3.2 million in loans and grants for the projects. The city’s funding is from the state and federal governments.
This was the last piece of the financing for the $10.8 million project, which is a partnership among Modesto, BHRS and the Stanislaus Regional Housing Authority. The Housing Authority will own the complexes.
The Housing Authority also is moving forward on another project to convert the former Clarion Inn Conference Center into 148 studio apartments. The authority purchased the Sisk Road property near Briggsmore Avenue in 2020. This would be market-rate housing, with apartments renting for $950 to $1,050 per month. The rent includes utilities.
These projects come as the demand for housing remains great.
For instance, the city announced last week that EAH Housing was taking applications for Archway Commons II, a 74-unit affordable housing complex in Modesto. An EAH spokeswoman told The Bee on Tuesday the development already has 1,014 applications. Construction is expected to finish in spring 2023.
The west Modesto complexes will be built next to each other on a 1.36-acre vacant lot on Vine Street just north of Dr. Martin Luther King Jr. Park and the King-Kennedy Memorial Center. Both complexes will be gated.
The senior complex will be named Helen White Court, in honor of the west Modesto civic leader who died in 2008. It will consist of a dozen one-bedroom, 650- to 700-square-foot apartments. The complex will have a courtyard and garden.
The complex is for seniors whose income is below 120% of the area median. That is $66,960 for a single person and $76,560 for a couple. Rent would be $950 to $1,050 per month.
One of the 12 apartments is for the on-site manager for both complexes.
One-bedroom cottages
The other complex consists of 15 cottages for Stanislaus County Behavioral Health and Recovery Center clients and eight cottages for veterans. The one-bedroom cottages will be 580 square feet. Residents cannot make more than 30% of the area median income. That is $16,750 for one person.
The U.S. Department of Veterans Affairs will place veterans in the complex and provide them with services. BHRS also will provide services for its clients. The cottages at one time were envisioned only for veterans.
Rents also will be $950 to $1,050 per month, but the rents will be subsidized with vouchers and tenants will pay no more than 30% of their income for rent.
A city report states it will cost $6.4 million to construct both complexes. The project is along a one-tenth-mile section of Vine Street that is a private road, and the Housing Authority will be responsible for bringing it up to city standards, including curbs, gutters and sidewalks.
The report identifies $2.9 million in land development costs, which include the road improvements as well as the utilities for housing developments, such as water and sewer.
Housing Authority Executive Director Jim Kruse said in a Tuesday interview the authority was working on some of the final details of the projects’ other financing but he expects construction to start by December and take 12 to 18 months.
Besides Modesto, funding is coming from Stanislaus County and a loan the Housing Authority is taking out with F&M Bank.
The Housing Authority on Thursday will ask the city’s Board of Zoning Adjustment for what is called a conditional use permit for its Sisk Road hotel conversion. City staff is recommending the board grant the permit.
The authority bought the 186-room Clarion Inn Conference Center for $13.5 million in July 2020. Kruse said the authority has nearly completed phase one, which is converting some of the hotel into offices for its administrative staff and building a roughly 16,000-square-foot maintenance facility on the property. The city granted all of the approvals for phase one.
Kruse said he expects the Housing Authority will relocate its administrative and maintenance staff of about 60 employees from its Robertson Road facility by the end of this year. Phase two is converting 148 motel rooms into studio apartments.
Economic turbulence
Kruse said he expects construction could start in the first quarter of 2023 and take 12 to 18 months. He said that is contingent upon the Housing Authority getting the building materials in a timely manner. The authority also is facing rising costs.
It estimated in July 2020 that both phases would cost about $7.6 million, but that’s not panned out. “Everything is harder to get and more expensive,” Kruse said.
He said phase two alone could cost $6 million to $7 million. Phase one also was more expensive than expected, but Kruse could not immediately provide figures. He attributed the higher costs to the pandemic, supply-chain backlogs and global economic turbulence.
He said housing developers also are faced with rising interest rates that increase borrowing costs as the Federal Reserve tries to tamp down inflation.
The hotel conversion is the Housing Authority’s first workforce housing project. This is market-rate housing that is affordable for retail workers, restaurant servers and other moderate-income workers. And unlike traditional affordable housing projects, the rent is not subsidized.
This story was originally published October 26, 2022 at 9:24 AM.
