Santa Clara OKs $50M Bond for Housing

Affordable housing is the core story here — not city borrowing in the usual sense. On May 5, Santa Clara’s City Council approved a conduit bond issue of up to $50 million for Clara Gardens, a 120-unit affordable project on El Camino Real. That matters because the city needs more low-income housing, but also because this kind of bond can sound riskier than it is. The short version: Santa Clara opened the financing door, but the developer carries the debt, not the city. ### What did the council actually approve? The council approved tax-exempt multifamily housing revenue bonds for Resources for Community Development, or RCD, to help finance Clara Gardens at 3550 El Camino Real. This is a classic conduit financing move — the city authorizes the bond issuance so the project can tap lower-cost financing, RCD said in a report on the vote published May 6. ### So is Santa Clara on the hook? Basically, no. The clearest detail in this whole story is that the city does not take on “moral, legal or fiscal responsibility” for repayment. That language matters because “city approves bonds” can sound like taxpayers just guaranteed a housing deal. Turns out this is closer to the city lending its legal authority than lending its balance sheet. ### Why is the number “up to” $50 million? Because the cap is not the same thing as the expected sale size. At the meeting, the California Municipal Finance Authority said the actual issuance will likely be closer to $31 million. The higher ceiling gives the financing room to close, but the expected borrowing is well below the headline figure. ### What is Clara Gardens, exactly? Clara Gardens is a 120-apartment affordable development at the former Bella Vista Inn site, at El Camino Real and Flora Vista Avenue. The plan combines renovation of the old motel into 43 apartments with a new building containing 77 more below-market-rate units. The city’s project listing says the new structure includes six residential floors over parking and commercial space. ### Who is this housing for? This is the part that gives the project real weight. Of the 120 apartments, 64 are set at the extremely low-income level — 30% of area median income — and 30 of those are reserved as permanent supportive housing. Another 55 units are for very low-income households at 50% of area median income who have the hardest time finding stable housing in Silicon Valley. ### What changed on the ground already? A lot more than the vote alone suggests. City staff said a building permit has already been issued. The county owns the land, and the interim homeless residents who had been on the site moved out at the end of March, with many placed into planned permanent housing. So the council action was not a vague future gesture — it was a financing step for a project already moving. ### What’s the catch? Parking is tight — just 83 spaces for 120 apartments, with spots assigned by lottery. But that tradeoff is pretty standard for deeply affordable infill housing on a busy corridor. The more important long-term condition is the affordability term: the site stays below market rate for 55 years. That gives Santa Clara a durable housing asset, not a short-lived subsidy. ### Bottom line? Santa Clara did not write a $50 million check. It approved a financing tool that helps a nonprofit developer build deeply affordable housing faster and cheaper — with the debt sitting on the project, not the city. In a place where affordable units are painfully hard to add, that is the real news.