The additional bond money will pay eligible public infrastructure costs for the planned 279-unit affordable housing development, leaving about $5.1 million in Salem’s housing fund.
Salem will put up to another $1.37 million toward public infrastructure serving the Casa Loma affordable housing development after a divided City Council approved the request Monday night.
The 5-3 vote increases the city’s bond commitment to the project from $3 million to as much as $4,368,762. The money comes from the $10 million Affordable Housing Opportunity Fund created through Salem’s voter-approved 2022 Safety and Livability Bond.
The additional money is restricted to eligible infrastructure that will remain in public ownership, including water and sewer improvements. It is not funding for the project’s day-to-day operations.
Casa Loma is planned for southeast Salem near Corban University and the Mill Creek Corporate Center. The first phase includes 183 apartments that city staff said are fully funded. A planned second phase would add 96 more, bringing the development to 279 affordable homes.
Community Resource Trust, the Salem nonprofit behind the project, expects Casa Loma to follow a model similar to its 180-unit Cornerstone Apartments, combining affordable housing with services such as transportation assistance, GED preparation, case management and youth programs.
Beth Hays of Community Resource Trust told council the project is ready to move forward and could begin opening homes by March 2028.
The request for additional city money came after infrastructure costs increased from estimates prepared in 2024. City staff said about $271,000 of the increase is tied to larger water and sewer lines the city asked the project to install so future development in the area can connect without reopening streets.
The remaining increase is slightly more than $1 million. Staff cited updated engineering estimates and higher costs over the past two years, while acknowledging inflation alone does not account for the entire increase.
Hays told council that delays involving state housing funding and a required change in the project’s financing structure also added costs. The development team said Casa Loma could still move forward without the full city contribution, but doing so would likely require more private borrowing and could leave less money available for resident services.
That tradeoff divided the council.
Councilors Micki Varney, Irvin M. Brown and Mai Vang voted against the full request. Varney raised concerns about committing more than 40% of Salem’s $10 million affordable housing fund to a single development. Brown questioned the size of the increase from earlier engineering estimates. Vang supported helping with the infrastructure costs connected to the city’s request for larger pipes but said she was not comfortable approving the entire amount.
Councilors Shane Matthews, Deanna Gwyn, Vanessa Nordyke and Paul Tigan joined Mayor Julie Hoy in supporting the funding. Councilor Linda Nishioka recused herself after declaring a potential conflict of interest.
Supporters focused on the project’s readiness and the number of affordable homes the city could help bring online. Staff said there were no other active applications before the city’s bond committee at the time, although another substantial request is expected.
About $5.1 million will remain in the affordable housing bond fund after the Casa Loma commitment.
The full $1,368,762 is not guaranteed to be spent. The city will reimburse eligible infrastructure expenses based on actual, certified construction costs, meaning the final amount could be lower.
