The city of Orange has approved bond financing for a new apartment complex with 62 units that will be affordable for low-income families.
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A $20 million tax-exempt bond that will come from the California Municipal Finance Authority, a loan agency for local governments, non-profit organizations, and private enterprises, will help build the complex, called Valencia Garden Apartments, at 637 W. Struck Ave., according to a city staff report. According to Aaron Schulze, senior assistant to the city manager, the bonds are purchased by private investors and will be paid off by project revenue, which the developers will acquire through rent paid by tenants. Schulze also said that the apartments will be affordable for tenants for 55 years.
The Orange City Council voted unanimously to approve issuance of the bond during a meeting last month. Mayor Mark Murphy said in a telephone call that his decision to vote for the bond was easy since it ensures that the development will be cost-effective to the taxpayers.
According to the staff report, the City Council had already begun the process to approve and finance this low-income housing complex in January, when the council approved the sale of approximately two acres of city-owned land for the project and okayed development agreements, as well as the allocation of HOME Investment funds, which are federal grants given to local governments for the express purpose of developing strategies “to increase homeownership and affordable housing opportunities for low and very low-income Americans.”
The council considered issuing tax-exempt bonds to fund the project in January, but finalized the issuance during its meeting last month so that project developers Orange Housing Development Corp. and C&C Development Co. can now move forward with the development.
Orange is not the only city to consider ways to address the issue of affordable housing. Every city in California has been mandated by the state to build a certain number of affordable housing units by October 2029. Orange is expected to build 3,936 units in total, with specific quotas per income level. To meet these goals, some Orange County cities have mandates that require developers to either build a certain number of affordable housing units within their projects or pay a fee to the city that will go toward such developments elsewhere in the area.
As of Nov. 1, the city had not decided on the construction schedule, according to Schulze.