The Sunnyvale City Council approved a $1.2 million loan to First San Jose Housing to develop a 30-unit apartment complex on Weddell Drive for low-income residents.
At its March 4 meeting, the council also gave the nonprofit group approval to begin construction.
Mayor Stan Kawczynski and Councilman Landon Noll voted against the complex, saying 30 units was too dense for the site, which is less than an acre.
"I don't think this is the proper project, in the right place, at the right time, for the right purpose," Kawczynski said. "If we worked with this developer, other developers, we could probably get a much better project [with] lower density."
The project could be "injurious to the community as a whole," he added.
But city officials said the project, though relatively small, will help make a dent in Sunnyvale's housing shortage. The city said there is a need for another 1,000 to 1,600 affordable housing units.
Councilwoman Patricia Vorreiter said the project is ideally suited for the area, and denying funding to FSJH could jeopardize the city's chances of getting similar funds in the future.
The loan involved $611,000 in federal funds the city controls to develop affordable housing. Of that amount, the city had until June 30 to commit $411,000 to housing projects, according to city documents.
If the city hadn't done that, the federal government could have reclaimed the funds and disbursed them to other cities, said David Vossbrink, the city's community relations officer.
The city faces a later deadline on the $200,000 balance.
The additional $650,000 in loans for the project will come from a city housing fund.
FSJH wants to use the money--structured as part of a 30-year loan at 3 percent interest--to acquire the land and to construct the apartment complex. It plans to obtain funds from other sources to pay for the $4 million project.
Vice Mayor Jim Roberts supported the project but not the funding, siding with some residents who said it was not government's place to subsidize a project that would compete with privately owned apartment complexes.
Paul Popoff, who owns an apartment complex next to the development, didn't attend the meeting. But he noted at other meetings that the government-sponsored project would result in lower rents and make it more difficult for him to lease his units.
The rates would be lower, but the units would be geared for families larger than those who would rent from Popoff, said FSJH representatives.
Leslee Coleman, a spokeswoman for the Santa Clara Manufacturing Group, which advocates housing development, commended the council for approving the project.
The units are "especially needed for moderate-income earners in the valley," she said.
The rent for a three-bedroom unit will run from $811 to $986 a month. A three-bedroom apartment in Sunnyvale rents, on average, for about $1,600, city officials said.
Rent for one-bedroom and two-bedroom apartments at the low-income site will run from $595 to $722 and $704 to $856, respectively, according to city documents.
This article appeared in the Sunnyvale Sun, March 12, 1997.
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