OCEANSIDE — The City Council has approved a loan of up to $65 million in tax-exempt state bond funds for an eight-story, 179-unit affordable housing project in downtown Oceanside.
The low-income housing development, located at 712 Seagaze Drive, will consist entirely of studio apartments, each about 300 square feet, and will be reserved for households earning 30% to 60% of the area median income (AMI).
The California Municipal Finance Authority granted the funds to the project developer. Under TEFRA (Tax Equity and Fiscal Responsibility Act ), the city must hold a public hearing and approve the loan. However, the city is not responsible for the loan or any associated debt.
According to Housing and Neighborhood Services Director Leilani Hines, who spoke during a March 12 public hearing, the bond issuance approval was necessary to comply with Internal Revenue Service and state law requirements.
Of the units, 45 will be designated for extremely low-income tenants earning around $32,000 annually (30% AMI), 43 units will be set aside for those at 50% AMI (approximately $53,000 per year), and 89 units will be for tenants at 60% AMI (about $70,000 per year).
The project was initially approved in 2022 with plans for 64 hotel rooms, with only 10% of the units designated as affordable housing. However, in early 2024, the City Council permitted the developer to convert the hotel rooms into additional apartments, increasing the total number of units to 179.
Last summer, Kansas-based developers Chris and Bryan Elsey secured $48.7 million from California’s Affordable Housing and Sustainable Communities Grant Program, which required the project to be fully dedicated to affordable housing.
The total project cost is estimated at $96.5 million, covered by the state grant and bond funds.
During the hearing, some residents raised concerns about the lack of larger units for low-income families with children.
Deputy Mayor Eric Joyce acknowledged the concern but emphasized that other multi-bedroom affordable housing projects are in the pipeline.
“This is part of a diverse affordable housing system that we’re attempting to build out,” Joyce said, adding that constructing extremely low-income units is a rare and challenging achievement.
Hines noted that the project will help serve people at risk of homelessness.
The Seagaze project will account for 26% of the 691 affordable units Oceanside expects to add by 2026. Other upcoming projects include the 111-unit South El Camino Real development, set to break ground in the spring, featuring two- and three-bedroom units for households earning between 30% and 80% AMI.
Other potential affordable housing developments include the 199-unit Olive Park Apartments, which applied for approval earlier this year, the 43-unit Shadow Way Apartments and the 56-unit South Coast Villas.
Mayor Esther Sanchez cast the sole dissenting vote on the Seagaze financing plan, citing concerns over the small studio sizes and a 30-space parking shortfall.
“I wish we could have had a better project,” Sanchez said.
