Tax-Exempt Bonds Finance Housing in Downtown San Jose
Developers land California Municipal Finance Authority funding for 300 affordable units.
Jemcor Development Partners and Pacific Housing are partnering to build 300 affordable housing units in downtown San Jose with $107M in construction financing.
The California Municipal Finance Authority is providing the financing, $74M of which is in the form of tax-exempt bonds.
An affiliate of the developers paid $11.7M for development sites at 950 and 970 West Julian Street encompassing a combined 1.1-acre, according to a report in Silicon Valley.com.
Caminar, a substance abuse treatment facility at 950 West Julian for $7.3M. The Boy Scouts of America Silicon Valley Monterey Bay Council sold 970 West Julian for $4.4M, the report said.
The affordable multifamily campus will be an eight-story building that will be within walking distance of the Diridon train station in San Jose.
Units in the building will priced for households earning less than 30%, 50% and 60% of the area’s median income. In June 2023, the state Housing and Community Development Department estimated that the area median income for a household of four people was $181,300 a year.
The project is expected to be delivered in the third quarter of 2026.
The California Municipal Finance Authority (CMFA) is a state-backed Joint Powers Authority that provides financing for economic development throughout California.
Tax-exempt bond financing is a low-cost method of raising capital. The CMFA can provide access to this market for qualified borrowers by acting as the conduit issuer.
Eligible costs for a CMFA financing may include the purchase of land, project design costs, construction, rehabilitation, improvement, equipment purchase and installation and legal fees, according to its website.
The types of projects eligible to be financed on a tax-exempt basis through the CMFA include nonprofit projects Including health care, education and cultural facilities; affordable multifamily and senior housing; and infrastructure projects.
The CMFA’s Bond Opportunities for Land Development (BOLD) program is designed to help developers, municipalities and schools work together to cost effectively finance public infrastructure projects and development fees through bonds issued by a community facilities district (CFD) formed under the Mello-Roos Community Facilities Act of 1982.
Administration of the BOLD program, bond offerings and related CFD formation and ongoing administrative responsibilities are handled by CMFA, without cost or burden on the municipality or developer.