CasaLago Eastlake – vanguard of Chula Vista government subsidies

When it comes to housing, many Chula Vista workers find themselves stuck in the middle, earning too much to qualify for affordable housing, yet unable to pay the higher-end rents.

Facing a dearth of suitable rentals in the city are teachers, police officers, nurses, retail workers, and others, including the children of longtime locals.

Under a new Workforce Housing Program run by the state, projects to create more middle income units are being considered in Chula Vista, San Marcos, Escondido, and La Mesa.

The city of San Diego, which hasn't yet opted in, recently formed a middle income housing working group.

"There really is a missing middle in our community," said Chula Vista City Councilmember Andrea Cardenas. "The reality is, we don't have options for people to kind of move and wiggle into the middle."

Last week, the city discussed entering into Joint Powers Authorities with the state, which would allow a state agency to issue bonds to buy an apartment complex.

Each unit would be rent restricted for 30 years. Since the state agency is a government body, they don't pay property tax, which indirectly subsidizes the rents. Upon sale of the property, Chula Vista is expected to make a windfall and recoup all lost tax revenue, city officials said.

"What makes the projects unique is that they are market rate properties," said Jon Penkower, managing director for the state agency. One example, now under contract, is CasaLago Eastlake, where rents for a 1-bedroom range from $2,695 to $5,861. Its 427 units will be converted to low and middle-income housing.

Tenants are not displaced under the program and residents who don't qualify are allowed to remain at market rents.

According to Jose Dorado, with the city's Development Services, the average cost for all rentals in the city is $2,006. An affordable 2-bedroom rent for a middle income family of four is considered to be $2,400.

As of 2019, Chula Vista has met its 15 percent moderate income housing requirement set in the 2013-2021 Housing Element, Dorado said.

But council members pointed to the gap. For anyone with a middle or lower income, "it is very, very challenging for you to be able to live here in Chula Vista," said Councilmember John McCann.

Lauren Seaver, president of Opportunity Housing Group, said 27 percent of Chula Vista residents are paying more than 58 percent of their incomes on rent.

"This is exactly the demographic at CasaLago," she said, where 72 percent of current renters would already qualify for the program, and receive rent discounts of about $500 per month.

Like most properties targeted for the program, CasaLago is a class A complex, less than 15 years old, professionally managed, with many amenities.

Penkower said naturally occurring affordable housing, dubbed class C, is disappearing all over the state, especially in San Diego. They recently tried to conserve such a building in Chula Vista, to rehab and protect it, but the developer they were working with was outbid by one of the largest institutional Wall St. investors.

"They're going to put money into it and raise the rents."