Mountain View City Council members agreed Tuesday night to set aside over $6.3 million to expand the Shorebreeze Apartment complex, adding a net total of 50 new units to the affordable housing project. That uses up almost all of the city's remaining affordable housing funds, and comes after the recent approvals of several projects to boost housing for low-income residents.

The proposal by MidPen Housing calls for the demolition of 12 existing townhouses on the property to make way for 62 new apartments, bringing the project to a grand total of 170 affordable units. The total project cost is just shy of $26 million, of which $6.3 million would come from the city in the form of a deferred, low-interest loan.

The plan includes a broad mix of units including 12 three-bedroom apartments to replace the townhouses being demolished, along with 21 new studios, 21 one-bedroom units and eight two-bedroom units. Jan Lindenthal, the vice president of real estate development for MidPen, told council members that the goal is to add affordable units that are available to families, while at the same time balancing the need to maximize the number of units and serve as many people as possible.

Council member Lenny Siegel praised the project as a creative way of circumventing the high cost of land acquisition, which he called the major obstacle limiting affordable housing growth. Developers face costs of around $10 million per acre in that area of the city, he said, which can end up being a massive money-sink for affordable housing funds.

"If we have to spend all of our affordable housing money on acquiring land, it's going to be much more difficult," Siegel said.

Compared to past low-income housing projects, Mountain View is getting a pretty good deal. The city is providing just over $100,000 in subsidies for each new unit added in the Shorebreeze expansion. By comparison, the city subsidy for the affordable housing project at 779 E. Evelyn Ave. was $187,000 per unit.

While City Council members embraced the project plans, MidPen has struggled to reach an agreement with the San Francisco Public Utilities Commission, which owns a portion of the project site. Negotiations to extend the lease beyond 2031 and accommodate the expansion plans have been going on for over a year, and have reached an impasse, according to the city staff report. The utilities commission representatives have made it clear that they do not want MidPen Housing to meet any of the city-mandated parking requirements by using the Hetch Hetchy right of way on the northern end of the property.

The City Counci's motion included sending a letter of support for the project from the mayor to the San Francisco Public Utilities Commission, which Lindenthal said should be enough political support to break through the impasse. Council member Chris Clark suggested that the letter be copied to other public officials in San Francisco to let them know that the commission is impending an affordable housing project.

"I know there's a lot of pressure at both the mayor's office and the San Francisco Board of Supervisors around affordable housing, and if the SFPUC is making that difficult, I think the supervisors and the mayor would like to know that," Clark said.

The commission's hard and fast restrictions on land use have been a thorn in the side of Mountain View City Council members in the past. Earlier this year, development of a mini-park near Fayette Drive faced problems when the commission barred use of bicycles on the public space.

"The PUC has been the source of great frustration for this council," said council member Mike Kasperzak.

Neighbors of the project told council members they were concerned about the effect of the Shorebreeze expansion plans on traffic and parking, especially since there is only one driveway to access the complex along southbound Shoreline Boulevard. Siegel said council members are well-aware of the traffic problems on the busy corridor, and are working on short-term and long-term plans to alleviate congestion in separate projects.

Prior to the approval of the project, the city of Mountain View had an affordable housing balance of about $7.5 million. While the $6.3 million in reserved funds for the Shorebreeze expansion nearly depletes that funding source, the staff report notes that the torrent of new development in Mountain View has been adding between $7 million and $9 million to the fund each year.