Waterford breaks ground on 75-unit Milpitas affordable project

Waterford Property Company has broken ground on a 75-unit affordable housing community in Milpitas, California, a small project that still carries the sector's standard financing: 4% low-income housing tax credits and private activity bonds, Connect CRE reports.

The community at 1397 California Circle is slated for completion in early 2028 and sits within a larger master-planned development where PulteGroup is building market-rate for-sale homes. Its 75 units will serve families earning between 30% and 70% of area median income. A partnership with nonprofit Pacific Housing Inc. will give residents access to no-cost on-site social services, a common feature in affordable housing aimed at helping tenants stay housed.

Waterford senior director of development Oren Hillel said the project addresses an acute need for teachers, nurses, first responders, and working families, and credited the firm for working with local governments to deliver long-term, mission-aligned housing, a strength that grows more critical in California's expensive coastal markets.

The deal is a compact case study in the financing model that still carries most American affordable housing construction. The credit-and-bond stack remains the sector's workhorse, and its use at a modest 75 units shows how dependent the industry is on public capital to make rent-restricted projects pencil: even the smallest groundbreaking requires the same intricate layering of tax credits, tax-exempt debt, and nonprofit partnerships as larger projects.

The arrangement also places the project inside a mixed-income master plan anchored by PulteGroup's market-rate for-sale homes, a structure cities are pushing as they seek income integration. But the affordable component still rests on the same foundation, and that stability means the pace of affordable construction will move only as fast as tax credit and bond volume allows.

This project is a compact reminder that affordable housing does not follow the repricing dynamics of the broader multifamily market. Where investors in market-rate deals bid on cap rates and current cash flow, affordable deals are anchored to federal tax credits and bond allocations. For a 75-unit project, that makes the financing both more complicated and more predictable, provided the public capital is there.