They can build the apartments, but only if they accept low rent in some units after the city rejected a developer's request Monday night to remove 48 affordable housing units from their apartment complex plans at 28601 Los Alisos.
Donald MacKenzie, representing developer UDR, was surprised the city rejected their request to remove the affordable units, which require the owner to accept lower rent for 55 years.
When the apartments, which would be built over a former K-Mart site, in a split vote, UDR expected $4.1 million in entitlements to partly defray the affordable housing costs.
MacKenzie said the entitlements would not make up the lost rent from affordable housing. Originally the city had intended to use its redevelopment agency to loan money to UDR to help provide the housing.
But in December, the state Supreme Court ruled that by a vote from the state legislature.
The state requires all cities to provide a percentage of affordable housing. The city still needs 147 affordable housing units to be built to come into compliance with state law, but the state sent the city a letter saying the UDR project does not necessarily need to provide that housing.
As approved, the UDR apartments still enjoyed city entitlements, but with no hope of receiving a loan from the dissolved redevelopment agency.
That's a risk they knew they were taking, Councilwoman said. She's one of three council members who voted against UDR's request to remove affordable housing from their plans. She was joined by Councilwomen and .
"UDR did accept the entitelements and did know the redevelopment question was in question," Kelley said. "Everyone knew what might happen with redevelopment. If you make less profit on this project than you planned on, I think that’s one of the risks of doing business."
MacKenzie said the site was never zoned for affordable housing. He said UDR agreed to that element under the expectation of further public money.
"We expected to be approved," he said.
And he said either the company would need government money to provide affordable housing or it would need to make the complex more dense.
Mayor voted in favor of UDR's request along with councilman . Ury and said he was afraid of the developer returning to the city with a request for a more dense development.
"Right now we can control the density of this project," he said before the vote.
UDR has owned the site for almost seven years, MacKenzie said. He said housing will eventually be bulit there and UDR will have new plans before the city in 45 to 60 days.