A proposal by a nonprofit housing developer to build what could be the largest affordable housing project in Menlo Park history was met with general approval by the City Council during a June 20 study session.

Meghan Revolinsky, an analyst with the city's housing and economic development department, confirmed last week that the proposal by MidPen Housing Corp. to tear down 82 existing apartments in the 1300 block of Willow Road and replace them with at least 118 new ones would be the "largest affordable housing project in Menlo Park, ever."

According to Jan Lindenthal, vice president of real estate development at MidPen Housing Corp., the current Gateway apartments on the site are functionally obsolete.

MidPen Housing has proposed several options to the council. It could, by locating the new structures closer to Willow Road, build up to 150 apartments, versus a maximum of 28 if built at the existing site. By reducing the number of apartment by 10, the developer could create an 8,000-square-foot, mixed-use space.

Council members agreed that all of the apartments should be designated for families that make less than 60 percent of the area median income, which means an income maximum of $78,960 for a family of four, based on this year's San Mateo County data.

They also expressed support for a plan to give preference to prospective tenants who have been displaced or are at risk of being displaced from Menlo Park. Homeless families in the Ravenswood City School District may also get preference. Establishing preferences takes careful legal considerations, Ms. Lindenthal said.

Planting trees or shrubs to provide screening to neighbors on Carlton Avenue was also recommended.

Any space that's not going to be rented as affordable housing, she noted, will have to either be subsidized by the city or be leased at a high rate to cover the construction cost, since that won't be covered by federal tax credits.

Ideas about what that space could be used for include a day care center, a library, a pharmacy or a grocery store.

A pharmacy or grocery store may be difficult, and would likely require some subsidization, because the site is considered too small for that type of retail location, Ms. Lindenthal said.

Some Belle Haven residents polled don't like the idea of using the space for a library because it would require kids to cross busy Willow Road. Others, who live in the apartments to be replaced, Ms. Lindenthal said, did support a library or ground floor retail space there.

There was also interest expressed in putting a daycare center on-site, and finding a service provider that would be able to help take care of children from low-income families.

In 2013, when the city of Menlo Park updated its housing element – part of the city's general plan that designates where new affordable housing can be built – the council upgraded the zoning to allow the MidPen properties on Willow Road to build more units. According to the city's zoning allowances, MidPen would be permitted to build up to 182 units on five stories at the site, Ms. Lindenthal said.

In public comments, several residents of Belle Haven said they did not believe the city should put so much affordable housing in their neighborhood only. Nina Wouk suggested that each affordable unit built in Belle Haven be matched with one built in Menlo Park west of U.S. 101. Pam Jones said having affordable units for lower-income families that allowed them to live in western Menlo Park would allow kids the opportunity to attend schools in higher-performing districts.

The agency has requested funding from the city's Below Market Rate fund, which the Housing Commission has agreed to put a maximum of $6.7 million toward, though less would be preferred, according to Commissioner Meg McGraw-Scherer.

Longtime Menlo Park resident Francis Robert supported the maximum number of units.

"I know there's all these organizations that provide affordable housing, but as far as I can tell, you have about as much chance at winning the Powerball as getting one of these units," he said. "Anything you can do to increase the number available would be a lifesaver."

Next steps are for MidPen Housing to pursue funding from the county and complete a schematic design. Initial occupancy is targeted for as soon as April 2020, according to a staff report.

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