Two major new housing projects aimed at low-income renters – both planned long before the coronavirus struck – are expected to rise nonetheless later thsi year in central Sacramento even as much of the rest of the economy potentially remains shut down.
Cyrus Youssefi, completing the vision of his late son Ali, plans to launch construction of an $80 million apartment project next to the midtown Safeway as early as August, with the majority of its 159 units reserved for low-income wage earners.
The project at 1717 S St. won final financing, including state aid, this week. It will be built just south of the Ice Blocks urban renewal project and is expected to open in late 2022.
The project marks the second to last of a half-dozen apartment projects for lower-income wage earners envisioned by Youssefi’s son, Ali, who died more than two years ago from cancer at age 35.
The last of them will be housing at the corner of Eighth and K streets, a project on a key empty site downtown that does not yet have a timetable for construction.
Downtown leaders say the S Street project and another distinctive low-income project to be called Lavender Courtyard – set for construction later this year – offer evidence that the economic hit Sacramento is taking in the pandemic will not last forever. There will continue to be a housing need for service workers, beginning state workers and others that the city must address, Sacramento Mayor Darrell Steinberg said.
“This news could not come at a better time, as tenants all over our city are struggling to pay the rent,” Steinberg said. “When we come out of this, people are going to need help.”
The city itself is now projecting $90 million less in revenue into the city budget for the remainder of this fiscal year as well as the 12 months starting in July – a result of the coronavirus-cased economic downtown.
Steinberg and the City Council voted earlier this year to sell some $50 million in bonds this summer, backed by new voter-approved Measure U sales tax revenues, to fund more low-income housing. That plan is now up in the air, but Steinberg said in a text to The Bee on Friday that he has not given up yet on selling bonds.
The city is expecting a major funding boost from the federal government. According to the latest estimate from the state Legislative Analyst’s Office, the city is slated to receive $88.9 million from the federal Coronavirus Relief Fund.
The S Street project will be co-developed by Youssefi’s CFY Development Inc. and the Capitol Area Development Authority, a joint city-state agency.
Youssefi said rents in Sacramento may drop during the virus in the coming months and perhaps longer, as landlords deal with renters who lose jobs and are unable to pay rents. But, he said he believes the housing market will stabilize in a few years, with a continued need for lower rent apartments.
The two apartment projects are made possible via government tax credits and loans. Those government programs require rents be capped. The 1717 S Street project will include units set aside for workers who earn less than 50 percent of the area’s median income, as well as units for people who earn wages in the $60,000 range.
Lavender Courtyard will be built at the corner of 16th and F streets in midtown and will include 49 one-bedroom and four two-bedroom apartments. It represents an effort to create safe living for people who are at least 62 years old and who have been under financial stress, with a focus on helping struggling older members of the gay and lesbian community.
Nearly half the units, 24 of the 53, will be reserved for people who will be moving in from living on the streets or living in homeless shelters. That includes members of the LGBTQ community and also residents who are not gay.
