Renters in a luxury apartment complex in Downtown San Jose may be pushed out for renters of affordable housing.
Catalyst Housing Group has offered to buy the 168-unit Modera The Alameda, a market-rate complex at 787 The Alameda, then rent all its apartments to lower-income households, the Silicon Valley Business Journal reported.
The Larkspur-based affordable housing developer received a go-ahead from the City Council to use money from bonds from a state agency to help buy and convert the six-story complex into affordable housing.
Catalyst has offered to buy Modera The Alameda from its developer, Florida-based Mill Creek Residential Trust, for an undisclosed price.
The California Municipal Finance Authority last month approved issuing up to $100 million in tax-exempt housing bonds to help Catalyst buy and convert the property.
Normally, San Jose requires the city to issue bonds for affordable housing-related projects. Catalyst asked the city to grant it an exception. The firm expects the deal to close by Jan. 5,
Under Catalyst’s plan, all the units would be set aside for lower income residents for 75 years. It’s not clear how the firm would deal with the building’s current tenants who pay market rates.
Rents at the complex, billed as a “sophisticated apartment community,” run from $2,818 to $5,082 a month for one- or two-bedroom apartments, according to Apartments.com. Each unit has 9-foot ceilings, wood-plank flooring, stainless steel appliances and quartz counters.
Plans call for 34 of Modera The Alameda’s apartments to rent to tenants who earn less than 50 percent of area median income, for no more than $1,785 for a one-bedroom unit.
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The remaining 134 apartments would rent to households that earn less than 80 percent of area median income, for no more than $2,743 for a one-bedroom unit.
The potential pivot to affordable housing comes five years after Mill Creek held its grand opening for Modera The Alameda, next door to an upscale Whole Foods Market.
Don Peterson, senior managing director of Northern California for Mill Creek, called the Downtown neighborhood “a paradise for the modern-day renter.”
— Dana Bartholomew