City Council Approves $3.25 Million Construction Loan for Affordable Housing Project

The Pasadena City Council on Monday authorized a $3.25 million construction loan to support an affordable housing project on Walnut Street.

Located at 1878 E. Walnut St., the mixed-income condominium development will add 60 for-sale units to the city’s housing stock. The project, developed by Heritage Housing Partners (HHP), includes 25 low-income units, six moderate-income units, and 29 unrestricted units.

The funding proposal was approved on Sept. 11 by the Burbank—Glendale—Pasadena Regional Housing Trust Fund Board after City Council approval on Aug. 19. This funding is crucial as the project faced delays in receiving state funding from the Affordable Housing and Sustainable Communities program.

With a total construction cost estimated at nearly $49 million, the project also incorporates funding from other sources, including the Affordable Housing and Sustainable Communities program and conventional loans.

The short-term loan from the city will help defray costs associated with construction until the state funds are received.

“This represents our most significant investment in affordable for-sale housing since 2020,” according to an agenda report.

The project’s affordable sales prices range from $332,000 for a low-income one-bedroom unit to $726,000 for a moderate-income three-bedroom unit, compared to the citywide median sales price of $1.23 million for new condominiums.

As part of the Burbank—Glendale—Pasadena Regional Housing Trust Fund funding agreement, Heritage Housing Partners has committed to increasing the number of moderate-income units from three to six, bringing the total number of affordable ownership units to 31. The project is expected to be a significant step in addressing Pasadena’s affordable housing crisis.

Heritage Housing Partners, known for its successful track record in affordable housing development, has previously completed projects such as Haskett Court and Fair Oaks Court. The organization aims to assist income-qualified first-time homebuyers through its marketing and selection processes.

The construction loan will be repaid from the project’s net sales proceeds, with the funds subsequently reinvested into other affordable housing initiatives in Pasadena.

The City loan will be secured by a deed of trust and is expected to stimulate local economic growth while providing much-needed housing options.