Project Financial Summary

As of March 1, 2026

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The financial analysis included here is indicative of an early schematic approach to the Project.

The sources of funding and project costs have not yet been fully vetted or formally committed. The intention of the summary proforma is to demonstrate that based on information currently available, the Project is financially feasible following a well-considered structure for mixed use – mixed income developments of similar complexity. As with all affordable and supportive housing projects with mixed use commercial / community components, the sources and uses will continue to be refined throughout the development process.
 

Two of the components of the CTE TAY Hub (housing and education) are represented here independently in stand-alone financial proforma. Although the intention is to develop the overall campus as a single project, each component is expected to be on its own parcel allowing for greater flexibility with separate ownership, financing, construction contracts, and long term
operations.
 

Initial Project Financials Q&A

1. If TAY residents cannot pay much rent, how will the project continue to operate long – term?
 

The current assumption is that 25 of the 79 apartments will have project based Section 8 vouchers (or similar – fair cloth / RAD) to subsidize tenants rents for those with incomes at or below 20% of Area Median Income (AMI) – extremely low income households. For the remaining 54 units, between 30%-50% of AMI, the current assumption is that a Capitalized Operating Subsidy Reserve (COSR) will be funded on completion of the building and contribute annually to cover operating expenses deficits. This reserve has been sized for 15 years and is expected to be funded with a combination of local and state public funds.
 

2. State and Local government is funding being cut, how can this development feasibly move forward?

The current availability of affordable and supportive housing financing in the Bay Area has recently become increasingly constrained. Given the proposed development is still on a 3-4 year trajectory, there is a reasonable expectation that proposed state and local affordable housing bond funds, homeless and supportive housing programs and tax credit pricing will rebound. The current financial modelling assumes that with concerted advocacy for a high profile project and target population, that sources of public funds will become available in three to four years.
 

3. Will the education and housing components cross subsidize each other?

The housing and educational elements will each be on their own parcel, have separate financing, ownership, management and operations. For the young people living and utilizing the hub, the entire project will read as ‘one community’, but for the purposes of financing, the two components are assumed to be legally separate. The housing component will be financially solvent with required reserves and operations per tax credit and public financing regulations. Likewise, the educational component is expected to have annual contracts for public funding through state and local programs (probation, workforce development, dept. of education, behavioral health etc.) that address the needs of justice and institutionally impacted youth as well as private funding. The education component will also carry healthy operating and replacement reserves to bolster long term viability. The education and housing components are designed as a complement rather than co-dependent – from a financial perspective.
 

4. Who is carrying the risk for developing and operating this ambitious project? Is there a developer and property manager?

The housing component will be developed by an experienced and qualified low income housing developer with specific expertise in supportive housing. As part of this work, the developer will assume ownership of the land, responsibility for the development and design process and be party to the construction contract. The housing developer will also be responsible for employing the services of a property manager, collecting rent and operating the property in a fiscally responsible manner for the long term in keeping with tax credit and public financing regulations. The educational component will be run as a hub model, with a single non-profit entity overseeing all programs on site including operations, services and management. The hub is expected to contract with the housing developer to build the educational component and on completion will
take over all management duties. For the long term, the two components will operate side by side in a cooperative and integrated way to support all young people who set foot at the CTE TAY Hub.