SOUTH LAKE TAHOE, Calif. — Construction on the Sugar Pine Village affordable housing project is underway in South Lake Tahoe.

Trees are being removed and the site is being prepared to provide South Lake Tahoe with additional long term multi-family rentals.

According to the California Department of General Services, the executive order signed by Gov. Gavin Newsom was intended to address the shortage of housing for Californians. Newsom ordered the Department of General Services and the Department of Housing and Community Development to identify and prioritize excess state-owned property and aggressively pursue sustainable, innovative, cost-effective housing projects.

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According to the report to the City Council from the city staff “In July 2020, the California Tahoe Conservancy announced the state had selected Related Companies of California LLC in partnership with the St. Joseph Community Land Trust to construct and manage the Sugar Pine Village project.”

Jessica Wackenhut Lomeli, associate housing planner for the City, told the Tribune that the land chosen for the Sugar Pine Village project was the second to be selected in California but the first to break ground and move forward with the project. 

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As the digging season comes to a close at Lake Tahoe, Oct. 15, the site will be winterized but construction offsite will continue.  

Zach Thomas, City housing manager, said “Modular components are being constructed in a factory in Vallejo, Factory OS. At the onset of spring, site work will resume. Including final grading, underground infrastructure and utilities, foundation and the initial work with going vertical.” 

The modular components will at that time be transported to South Lake Tahoe for the pieces to be put together. 

Thomas said, “It’s a technique of construction, being used more commonly now with affordable multi-family housing, where the pieces are built in sections and then stacked together. A simple way to explain it is like legos.” 

The end result will be a section of all-income-qualified, affordable apartments ranging from one to three bedrooms on Lake Tahoe Boulevard and Tata Lane. 

Thomas explained projects are typically built in phases based on affordable housing financing supplied by the state and other funding sources, per each 60 units, approximately. The overall project will be 248 units. The first phase of the Sugar Pine Village will be 68 units with the remaining three phases at 60 units each.

The process allows for each phase to be built and occupied independently from the others.

“We are still seeking funding for the next phases 1B and 2A and 2B. We are approximately halfway to securing the funding for the 1B phase,” Thomas said.

Financing has been completely secured and closed for the first of four phases of this project. Ten different funding sources were acquired including, the City’s total commitment toward the project $2,441,629, $17,359,470 in Affordable Housing and Sustainable Communities grant funds, $5,000,000 in Permanent Local Housing Allocation grant funding, $5,162,446 in Home Investment Partnership Program funding, and $10,000,000 from Local Grant Matching Grant.

The staff report also states “Related California has also secured $20 million in Multifamily Housing Program funding and $3,195,900 in Infill Infrastructure Grant funding so far in the financing phase of the project. To date, approximately $40 million in tax credits and grant applications have been applied for and secured using the City’s initial approximate $1.8 million commitment as a local match.”

Thomas told the Tribune that while the first phase will be inhabited prior to the completion of the remaining three, the cashflow from each phase will not be used in subsequent phases. All phases require separate financing structure for each phase which comes from a variety of funding sources including competitive grants, bonds, private equity, tax credits and local funding contributions.

“That’s the difference between market housing and affordable housing,” said Lomeli. “Affordable housing is dependent on different grant sources.”

Thomas clarified, “The cashflow for each phase is only associated with that phase and the main goal is to provide affordable housing to the community in the quickest way possible.”

“We are pleased that the Sugar Pine Village Project is on its way to providing urgently needed housing in the South Lake Tahoe community,” said Ann Silverberg, CEO of Related California’s NorCal Affordable and Northwest Divisions. “We look forward to the project’s first phase and want to thank the state of California, city of South Lake Tahoe, and our many other partners for their collaboration.”

Once the Tahoe Conservancy identified the asset land to be used, following the executive order, a public-partnership quickly came together to bring this concept to fruition.

Thomas said, “This highlights what these partnerships can accomplish in an actually relatively small amount of time.”

From conception to ground breaking the complex process has come together in just under 3 years. The hope is to begin accepting applications before Fall of 2023.

The Sugar Pine Village official website contains FAQs, will provide updates as the project progresses and the host of the application once the units become available for residents.