A partnership looking to create more middle-income housing in California bought a 180-unit apartment complex in Fairfield for $70 million and plans to make it affordable for low- and moderate-income tenants.
Opportunity Housing Group and the California Statewide Communities Development Authority acquired the Waterscape Apartments at 3001 N. Texas St., according to a news release on Thursday. The seller was a joint venture between Angelo Gordon and Glencrest Group, which were renting units at market rates. The gated complex offers eight different, one- and two-bedroom floor plans ranging from $1,850 to $2,260 a month, according to Waterscape’s website.
Opportunity Housing Group, which is working as a property administrator for the authority, will cut rents to less than 80 percent of the local median income for low-income tenants and less than 120 percent for those classified as having moderate salaries, Lauren Seaver, president of the group, said in an interview. The partners expect about 80 percent of current residents to qualify for rent-saving measures included in the authority’s workforce housing program, Seaver said. Those who don’t will continue paying market rates.
Under the program, middle-income workers such as teachers, first responders, and civil employees are offered discounted rents that align with incomes and have annual rent increases capped. At Waterscape, the cap is no more than 4 percent, and could be less if a tenant’s income doesn’t rise by that much, Seaver said.
By contrast, apartment rents in Fairfield, nestled about halfway between San Francisco and Sacramento, jumped 12 percent in the last year to $2,034 a month, according to RentCafe data. The city is still a relatively affordable place for apartment renters compared with San Francisco’s $3,072, Oakland’s $2,817 and $2,365 for the East Bay in general, according to RentCafe.
More than 30 percent of the Bay Area workforce, or more than 1.5 million people, are part of the so-called “missing middle” demographic, Seaver said. It’s made up of people who earn too much to qualify for traditional affordable housing yet not enough to afford market rates where they work.
New California residential projects designed for that group remain scarce because, among other things, housing developments in general “can only pencil in the absolute best locations and with the highest rents,” Seaver said.
Opportunity Housing Group bought a 261-unit apartment complex in Monrovia, in Los Angeles County, in April for $100 million. That will also be converted into workforce housing. Institutional Property Advisors, a division of Marcus & Millichap, arranged the Monrovia deal and the sale of Waterscape. IPA’s Northern California team of Salvatore Saglimbeni, Philip Saglimbeni, Stanford Jones and Alex Tartaglia brokered the latter transaction.