Santa Clara County supervisors have agreed to lend the developers $21 million to help cover soaring construction expenses for a Palo Alto teachers apartment project.
The project’s costs have increased from $62 million when the project was proposed about four years ago to $87 million today, although the county’s loan is to be paid back over time with rent from the developers’ future tenants, The East Bay Times has reported.
Reasons for the price hike include the pandemic’s toll on the construction industry in general, said Doug Shoemaker, president of Mercy Housing, which along with Adobe Communities is building the structure.
“We were all hoping that 18 months ago, costs would flatten or decline, but with supply chain and commodities, we’re seeing 8 to 12 percent inflation in the construction world,” Shoemaker was quoted as saying. “Whatever way you slice it, it’s not specific to this project.”
Apartments on the 1.5 acre site at 231 Grant Ave., across the street from the county’s superior court building, would go to Peninsula teachers who don’t qualify for low-income subsidies but cannot afford the area’s expensive rents, the published report says.
The initiative to create teacher housing began in 2017. The city of Palo Alto and local school districts contributed several million dollars. In 2019, Facebook offered to contribute $25 million as part of a wider effort to address a housing crisis it and other tech companies have been blamed for exacerbating.