SAN JOSE — Plans to convert a prominent downtown San Jose apartment complex into affordable housing have taken a big step with the purchase of the property by a Bay Area nonprofit that specializes in low-cost homes.
Modera The Alameda, a 168-unit apartment complex in downtown San Jose near the SAP Center and Diridon train station, has been bought for $78.2 million, according to documents filed on Feb. 1 at the Santa Clara County Recorder’s Office.
Catalyst Impact Fund, a Larkspur-based nonprofit, bought Modera The Alameda, the county documents show.
The Modera apartment complex is located at 787 The Alameda in San Jose. The complex is new; it was built in 2018.
A $100 million package of tax-exempt bonds to finance the purchase of Modera The Alameda is the funding centerpiece of the affordable housing conversion, according to documents on file with San Jose officials.
The funding package of $100 million would be used for “the acquisition, rehabilitation, improvement, and equipping of 167 apartments and one manager’s unit to transition to an affordable housing development,” a city staff report states.
The California Municipal Finance Authority, an agency jointly established in 2004 by multiple government agencies, agreed to issue the bonds for the purchase of the Modera apartment complex. The California Municipal Finance Authority acts as a conduit for tax-exempt bonds to finance an array of projects to promote economic development.
“San Jose lacks a sufficient amount of affordable housing to meet residents’ needs,” a city staff report states. The report added that The Modera conversion plan will “create much-needed affordable housing.”
An affiliate linked to AEW Capital Management sold Modera The Alameda to Catalyst Impact Fund.
Of the 168 units, 34 units will be set aside for people at the 50% area median income level and the remaining 134 units will be restricted to people at the 80% area median income level, city officials say.
The 2023 income limit for households with 50% area median income is $62,450 to $89,200 a year and the 80% area median income is $96,000 to $137,100 a year, the city staff report stated.
“Low-income renter households face increasingly prohibitive housing costs and countless barriers to economic mobility,” said Annie Koo, president of Catalyst Impact Fund’s board of directors.