Construction has started on a 75-unit affordable apartment complex at 1397 California Circle in Milpitas, a project developer Waterford Property Co. is building alongside partner C&C Development to serve families earning between 30 percent and 70 percent of the area's median income. The five-story building is rising on a former industrial site near Interstate 880, roughly 9 miles north of downtown San Jose, and is slated for completion in early 2028.
The total development cost comes to $47.6 million, according to a California Tax Credit Allocation Committee staff report cited by Multi-Housing News. That figure is supported by $1.8 million in annual 4% Low-Income Housing Tax Credits and $12.5 million in tax-exempt bonds issued by the California Municipal Finance Authority. National Equity Fund is serving as the project's tax credit equity investor, while Citibank provided permanent loan financing and California Bank & Trust supplied construction financing, according to ConnectCRE.
A Master-Planned Community With a Builder Partner
The 75 income-restricted units represent the affordable rental portion of a larger master-planned residential community developed by homebuilder PulteGroup, which also contributed $6.4 million in direct funding toward the affordable housing piece, per the same Multi-Housing News report. It is a structure that illustrates how a market-rate builder can help fund deed-restricted units within a shared development footprint, rather than building them entirely separately.
Designed by KTGY Architecture, the building consists of four residential levels above a podium parking garage, with two podium courtyards and a mix of one- to three-bedroom floor plans, according to REBusinessOnline. Amenities listed by ConnectCRE include a fully equipped community kitchen and dining area, a lounge, a community room, a yoga and fitness studio, an entertainment space with a TV and foosball table, bike storage, electric vehicle charging stations, a barbecue and outdoor gaming area, and a tot lot.
On-Site Services for Working Families
Beyond physical amenities, the project includes a teen homework room as part of its social services programming. Waterford and C&C Development have partnered with Sacramento-based nonprofit Pacific Housing Inc. to manage on-site programming, which will provide free youth tutoring, teen leadership classes, financial literacy training, and family service coordination, REBusinessOnline reports.
Newport Beach-based Waterford Property Company shifted its investment focus around 2021 to concentrate exclusively on income-restricted workforce and affordable housing, according to the Orange County Business Journal. That pivot has grown the company's portfolio to more than 6,000 units across 32 communities in California, the outlet notes.
Fitting Into Milpitas's State Housing Mandate
Waterford targeted the Milpitas site in part to help meet Santa Clara County's state-mandated Regional Housing Needs Allocation goal of adding 51,600 new affordable units by 2031, according to a report from KingsBarn. Under its own state-mandated 6th Cycle Housing Element covering 2023 through 2031, the City of Milpitas must plan for 6,713 total new housing units, including 3,786 designated as affordable to lower-income households, according to city documents.
Santa Clara County's Area Median Income for a four-person household stands at $205,500 in 2026, per state guidelines from the California Department of Housing and Community Development, which sets the financial baseline for the project's 30 percent to 70 percent AMI eligibility brackets. The groundbreaking arrives as Silicon Valley's multifamily housing construction has slowed regionally, with only 1,303 units starting construction during the first five months of 2026 — a 7.5 percent annual decline — and full-year deliveries forecasted at just 1,800 units, per Multi-Housing News.
The California Circle project follows other recent affordable housing efforts in Milpitas, including the opening of Sango Court, another fully affordable development in the city. Milpitas has not always moved smoothly on such projects; the city council previously moved to sue over a separate proposed housing development in 2020, reflecting the local tensions that can accompany affordable housing plans even as state mandates push cities toward faster approvals.
