The Santa Clarita City Council has approved a plan to enter into a multi-million-dollar workforce housing project designed to bring rent-restricted housing to local middle-income residents.
Adopted as a resolution by the council in a 4-0 vote on Nov. 23, the workforce housing project would result in the purchase of the 264-unit Skycrest apartment complex, located at 27800 McBean Parkway.
The apartments would be taken from market-rate apartments to rent-restricted, income-eligible units, which could then be rented to local residents whose incomes “are too high to qualify for affordable housing, but not high enough to afford market rate housing,” the City Council agenda item reads.
In order to execute the workforce housing plan, the motion authorized the city staff to create a joint powers agreement, or JPA, related to the California Municipal Finance Authority’s Special Finance Agency, or CMFA, which issues bonds to help finance projects like workforce housing.
The apartment complex, according to city staff, would be acquired by the CMFA agency through the purchase of $164 million in government revenue bonds, which typically have a repayment period over 35 years. The agency will be solely responsible for the bonds, which will be paid back through rents, and the property is set to be managed by a private investment company, Catalyst Housing Group.
“Upon approval of the recommended action and execution of related agreements, the city would forego property tax revenue for the Skycrest Apartments, which is approximately $36,150, annually,” the fiscal impact portion of the project plan reads. “However, for the city’s participation in the program, the city would receive 25% of CMFA’s issuance fee for bonds issued associated with the acquisition of the Skycrest Apartments and receive an annual monitoring fee of $39,600 during the bond repayment period.”
The city defined income-eligible households as between 80% and 120% of Santa Clarita’s median income of $80,000 per year, with the rent levels being specific to each resident and placed on a sliding scale based on said area median income. The regulatory agreement also places a limit on annual rent increases at 4%, prevents displacement of current tenants who do not meet the requirement, and places preference on professionals working in Santa Clarita, residents who graduated from a local school, first responders, teachers and medical professionals.
The apartment complex offers one-bedroom and two-bedroom apartments, and depending on a person’s relation to the average median income, as well as the type of apartment, tenants could pay anywhere between $1,850 to $3,192 based on 2021 projections.
Bond pricing, according to the agenda, was estimated to occur before the end of the year.