A proposal for 52 homes at 1098 38th Ave. could be constructed by May 2028. (Tyler Maldonado — Santa Cruz Local file)
CAPITOLA >> A proposal for 52 below-market-rate homes beside the Santa Cruz Branch Rail Line in Capitola is expected to break ground in November after its developer secured funding earlier this year.
The property at 1098 38th Ave. is the former site of a convalescent home that has sat empty for years. Foster City-based nonprofit developer MidPen Housing Corp. is behind the project that was first put forward in 2022.
The three-story project is expected to break ground in November and could finish in spring 2028. It is set to include four studios, 21 one-bedroom homes, 14 two-bedroom homes and 13 three-bedroom homes. Eligible renters must earn 60% of area median income or less, according to state-set income limits.
About half of the homes are expected to be filled from the Housing Authority of the County of Santa Cruz’s waitlist for recipients of a Housing Choice Voucher, formerly called Section 8. The remaining units could be filled from a lottery and waitlist administered by MidPen Housing, but no interest list has yet been established.
In May, the California Tax Credit Allocation Committee awarded the project roughly $34 million in tax credits, an essential source of funding for low income housing development. The project is now fully funded, said MidPen Housing Senior Vice President Joanna Carman.
See more housing projects and updates on Santa Cruz Local’s housing tracker.
Nonprofit developer MidPen Housing has secured financing for 52 units of affordable housing at 1098 38th Ave. in Capitola. (Naomi Friedland — Santa Cruz Local file)
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Nik Altenberg is a bilingual reporter and assistant editor at Santa Cruz Local. Nik Altenberg es reportera bilingüe y editora asistente para Santa Cruz Local.
