Waterford starts 75-unit Milpitas affordable build

Waterford Property Co. has started construction of a 75-unit affordable multifamily property at 1397 California Circle in Milpitas, inside a larger residential master-planned community in Santa Clara County, with apartments reserved for families earning between 30 and 70 percent of the area median income. Completion is scheduled for early 2028; Connect CRE, which first reported the start, does not disclose the project's dollar value. The reason the project is being built at all is the financing stack.

Financing comes from 4 percent Low-Income Housing Tax Credits and private activity bonds, California Bank & Trust providing the construction loan, Citibank the permanent loan, and National Equity Fund as the tax credit equity investor. The credits replace the revenue a household at 30 percent of area median income cannot pay, and the bonds lower the cost of the money, allowing apartments to rent at 30 to 70 percent AMI.

At 75 units, the property is small relative to the region's needs, yet the deal brings together a bank construction lender, a permanent lender, and a national tax credit equity investor on a single property. That assembly treats the subsidy layers as durable revenue rather than a closing prop, and it is a structure smaller developers can replicate if they can line up the same partners.

KTGY Architecture designed the building, and C&C Development is building it in partnership with Waterford. The amenity list reads like a market-rate project — tot lot, barbecue and outdoor gaming area, lounge, community room, teen homework room, fully equipped community kitchen and dining area, entertainment space with TV and foosball, yoga and fitness studio, bike storage, and electric vehicle charging stations. The EV chargers and fitness studio suggest the design brief did not treat affordability as a reason to strip the program, and on-site social services programming is the detail that makes 30 percent AMI tenancy a real operating premise.

The Milpitas project sits on the other end of the spectrum from the Bay Area construction loan this publication covered last month in San Carlos, where senior banks and preferred equity from TruAmerica carried a $123.5 million market-rate project. Waterford's deal only pencils because the tax credits and bonds are there, and in Santa Clara County the subsidy is what delivers workforce units while the market-rate side waits on rents and preferred equity. Until the supply pipeline produces something closer to market equilibrium, every workforce unit starts with a credit allocation, a bond issuance, and a lender treating the subsidy as revenue.