Los Gatos Planning Commission approves cost-saving concessions on North 40

"The Los Gatos Planning Commission approved several cost-saving measures for the developers of the North 40 to help ensure that the number of affordable housing units in the second phase of the project doesn't decrease any further. The commission voted 5-2 on Oct. 29 to agree to conditions of approval that would enable developers Grosvenor Property Americas to complete regrading the site and building 127 for-sale townhomes before the nonprofit Eden Housing can construct a 67-unit affordable housing building."

"Grosvenor argued that if the townhomes were finished first, they could sell those homes and use the cash to fund the rest of the project infrastructure and reduce the need for financing and the associated interest payments. When asked why Eden Housing couldn't help provide the affordable housing first, director of real estate development Dixie Lira-Baus said the nonprofit simply can't finance its own projects."

"The project was initially supposed to have 184 units for very low income tenants, 89 units for low income tenants, 92 units for moderate income tenants and 87 units for above moderate income tenants. However, the current version of the project only has 67 units for people with very low incomes, 10 units for those with low incomes, no units for people with moderate incomes and 373 units for people with above moderate incomes."

Los Gatos Planning Commission approved cost-saving measures allowing Grosvenor Property Americas to regrade the North 40 site and build 127 for-sale townhomes before Eden Housing constructs a 67-unit affordable building. Developers said building the affordable units first would strain project finances; Grosvenor said selling townhomes first would fund infrastructure and reduce financing needs. Eden Housing's director said the nonprofit cannot finance projects with high debt because restricted rents limit net operating income. Town staff noted the current North 40 plan contains far fewer very low, low, and moderate-income units than initially planned, creating an affordable housing deficit.

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