1304 MIDDLEFIELD ROAD. Courtesy city of Redwood City

The Redwood City Council approved more than $4.3 million in funding for constructing a new affordable housing project at 1304 Middlefield Road on Feb. 12.

Last year, Redwood City approved applications for the construction of affordable housing at 1304 Middlefield Road. The project was approved under Senate Bill 35, passed in 2017 by the state, which helps streamline the construction of new housing if it satisfies specific planning standards.

The proposal, to be constructed by the Sand Hill Property Company, includes 94 affordable studio units with one or two bedrooms. The building will include a community room with a kitchen, computer lab, multi-use wellness spaces, and a community garden. Office spaces for property management and on-site resident services are also planned for the building.

The approved funding totals $4,366,460 and will come from three sources. The first source is two loans from the HOME Investment Partnerships Program (HOME) funds, which were shifted to the Housing Support Fund, and unrestricted affordable housing funds from the city’s property sale at 1306 Main Street in 2020.

The loan, approved during a Feb. 12 city council meeting, will be for 57 years at 3 percent simple interest. It is a residual receipts loan, which means the borrower agrees to use excess income from the property to repay the loan.

The 1304 Middlefield Road project was approved for funding over other projects due to its readiness, including its previous approval, and because it met the city’s guidelines, Rachel Horst, Management Analyst for Redwood City, said during the meeting.

She added that they plan to seek state, county, and federal funding and apply for federal tax credits to push the project forward.

“Based on the budget that the developer of 1304 Middlefield, Sand Hill Properties, submitted to the City as part of their NOFA application, the City award of $4,366,460 represents just under 6% of the total project cost,” said Deputy City Manager Jennifer Yamaguma.

“If the Council says, ‘yes,’ (I don’t want it to) tie up $4 million indefinitely,” said Mayor Jeff Gee. “I don’t want $4 million tied up in perpetuity waiting for a project to break ground, so there’s gotta be some time.”

Horst said the money would not languish as there are time constraints on how certain funds can be used. The funds used for the loans are exclusive to constructing affordable housing.

The motion was approved unanimously by those present, with Vice Mayor Lissette Espinoza-Garnica absent.

“The City funding is our first step towards leveraging all other funding sources,” said Candice Gonzalez, the Chief Housing Officer for Sand Hill Property Company. “Our estimated timeline for construction start is the middle of 2025, with construction completion in 2027.”