Mutual Housing California plans to begin renovating 131 affordable apartments at three of its Davis complexes in January, its acquisitions manager told the City Council on Oct. 20. The complexes are Moore Village, 2444 Moore Blvd. (59 units); Tremont Green, 5663 Marden St. (36 units); and Twin Pines Apartments, 3333 F St. (36 units). They serve households with extremely low, very low and low incomes. Twin Pines opened in 1998, Tremont Green in 2003 and Moore Village in 2004.
Mutual said the homes would be completely renovated, with new appliances, flooring, cabinets, counters, paint, heating and cooling, windows and lights. City staff said the buildings, all more than 20 years old, need the ordinary repairs of that age, such as roofs and windows, and that the work would improve the properties' safety, appearance and sustainability.
Asked by a council member on Oct. 6 whether residents would be displaced, Mutual's representative said units cannot be lived in during the work, which lasts four to five weeks. Residents would be temporarily relocated, most commonly to vacant units at other Mutual Housing properties, and would return to the same unit, in line with California relocation law, the representative said.
The project is made possible in part by low-income housing tax credits, which require a new ownership entity, according to the Oct. 20 staff report; at the meeting, staff described the financing as including about $15 million in tax-credit equity, which is not city money. Mutual is therefore moving the three properties into a single partnership it created, Davis TRIO Mutual Housing Associates LP. Separately, on Oct. 6, after a federally required public hearing at which only Mutual's representative spoke, the council unanimously approved the issuance of up to $15 million in tax-exempt revenue bonds for the project by the California Public Finance Authority (CalPFA), a joint exercise of powers authority, which the city joined as a member. The bonds are solely the borrower's responsibility; the city has no obligation to repay them.
On Oct. 20 the council, also acting as successor to the former redevelopment agency, unanimously approved letting the new partnership take over the city's existing loans on the properties. Each complex has four city loans, from HOME, CDBG, former redevelopment agency and city funds, for 12 in all. They will be combined into four, one per funding source, each with a 55-year term, with accrued interest added to the balances, and placed behind the new bond financing. The city puts in no new money.
The loans are repaid only from residual receipts, money left after operating costs and debt payments, which staff said affordable projects rarely produce in their early years. The restructuring pushes any repayment further into the future; staff said they had expected some repayments to begin in the 2030s. Staff called that an appropriate cost because the city keeps the units affordable and in good condition without new funding, and said the 55-year term keeps the homes available to lower-income households. A council member asked whether the city could recover some money sooner. Mutual's representative said the properties' cash flow is minimal and they could not support required loan payments.