Mayor, City Council to Consider $4.2 Million Loan for Elk Grove Senior Affordable Housing Project
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| The Elk Grove Boulevard frontage of the Old Town affordable senior housing project. | |
Elk Grove Mayor Bobbie Singh-Allen and her four city councilmen will hold a public hearing on April 23 to consider approving a $4.2 million conditional loan commitment for an affordable senior housing development in Old Town-Downtown Elk Grove.
The proposed Old Town senior affordable housing project would be developed by Elk Grove Old Town Mutual Housing Associates, a nonprofit affordable housing developer with over 20 properties in Northern California. If approved, the 89-unit complex would be built on approximately two acres of city-owned land at 9220-9244 Elk Grove Boulevard.
According to the staff report, the project would provide needed affordable housing for seniors, with 88 units designated for households earning between 30 and 60% of the area median income. The housing mix includes one studio apartment, 74 one-bedroom units, 13 two-bedroom units, and one three-bedroom manager's unit.
The city acquired the site in 2023 and selected Mutual Housing California through a competitive bid process. The developer plans to apply for 4% tax credits in May 2025 to help finance the $50.8 million project.
The staff report listed strengths of the proposal, including:
- The developer's extensive experience in affordable housing
- Prime location near shopping, restaurants, and the future Elk Grove public library
- Focus on deeply affordable units for seniors, a demographic with limited affordable options in Elk Grove
- On-site property management and social services
However, the report also highlighted potential financial pitfalls:
- Disparity between projected rent increases (2% annually) and operating expense increases (3% annually)
- Inadequate replacement reserve contributions may affect long-term maintenance
- Limited likelihood of significant loan repayment to the city over the 55-year affordability period
The $4.2 million loan includes $1.2 million for the land value plus $3 million in cash from the city's Affordable Housing Fund. If approved, the loan would carry a 4% interest rate and require the developer to provide 12 hours per week of on-site social services.
City staff recommends that the Council declare the property as exempt surplus land, authorize the City Manager to execute a Disposition and Development Agreement with the developer, and approve the conditional loan commitment.
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