Pasadena Pioneers Climate-Funded Affordable Housing Initiative

In a groundbreaking move, the City of Pasadena has secured $8.75 million in state climate change funds to support both affordable housing and sustainable transportation improvements. This innovative approach marks the first time California’s Affordable Housing and Sustainable Communities (AHSC) program has ever funded a homeownership project.

The initiative, centered around a development at 1878 East Walnut Street, will create 60 mixed-income for-sale housing units. Of these, 31 will be designated as affordable, with 25 units for low-income and 6 for moderate-income households.

Bill Huang, Pasadena’s Housing Director, emphasized the project’s unique nature during the Economic Development and Technology Committee’s Tuesday, July 16 meeting.

“This is the first project in Pasadena and the first project in Pasadena to receive affordable housing, sustainable communities funding,” Huang said.

The AHSC program, often referred to as “cap and trade money,” aims to address both climate change and housing needs. Recipients are given a cap on emissions and can trade emission allowances.

Half of the funds, $4.375 million, will go towards housing development, while the remainder will support transportation improvements benefiting Pasadena.

While the AHSC funds have been awarded, they have not yet been released, leading to project delays. 

To address this, the City is seeking authorization to apply for an additional $3.25 million construction loan from the newly formed Burbank-Glendale-Pasadena Regional Housing Trust.

The project broke ground in January 2024, despite the funding delays. 

Sales prices for affordable units range from $332,000 for a low-income one-bedroom unit to $726,000 for a moderate-income three-bedroom unit, significantly below market rates.

Charles Loveman of Heritage Housing Partners, the Project Developer, highlighted the importance of workforce housing included in the development. 

“If you look at the census statistics for incomes of renters in Pasadena and in LA County, the majority of renters are out and 30% of renters are … making about $150,000 a year or more,” Loveman explained.

Pasadena’s unique workforce housing program targets households earning between 120% to 150% of the area median income, addressing a critical gap in the housing market. The City will apply its local preference and priority system guidelines to homebuyer selection, prioritizing those who live or work in Pasadena.

City officials view this project as a model for future developments.

 “Pasadena is one of the few housing agencies that actually does a good amount of affordable ownership units,” Huang noted, emphasizing the City’s commitment to addressing housing needs across various income levels.

The initiative has garnered attention for its comprehensive approach to urban challenges. By linking affordable housing with sustainable transportation, Pasadena could set a precedent for how cities can leverage climate-focused funding to address multiple community needs simultaneously.