Largest Affordable Housing Project in San Mateo County History Clears Key Funding Step

San Mateo County’s largest affordable housing development to date is set to rise on a 16-acre site with a long history in Daly City after supervisors on Tuesday approved a $14 million loan to continue construction.

The funding represents a key step for Midway Village, a 555-unit housing project that will include a childcare facility and a new park for the Bayshore neighborhood.

“This area in particular needs a lot of help,” board vice president David Canepa, whose district includes the development, said in a statement. “We’ve talked about the needs for affordable housing. This is really going to do that.”

The Midway Village property was originally used for a manufactured gas plant that was later relocated directly north of the project site. During World War II, the federal government used some of the land to house naval officers.

In 1977, the Midway Village housing complex was built in its place, with 150 homes for low-income families. The current plan will redevelop those homes, which are now outdated and falling into disrepair, and will add 405 new ones.

“This is obviously an aggressive intensification of the use of this site — we’re going from 150 to 555 homes,” said Matt Franklin, CEO of affordable housing developer MidPen Housing. “Daly City has been a tremendous supporter of this development.”

Officials are relying on Midway Village to help Daly City reach its share of 4,838 new homes, part of the state’s mandate for San Mateo County cities to build more than 47,000 new homes by 2031.

The project, broken up into phases, has already completed construction on its first stage of 147 homes held for people who earn 15% to 60% of the area median income, or $114,910 per year.

Tenants, many of whom were living in the 1970s-era housing, moved into the refurbished units in May. Construction on the next phase, which will commence in March, will include 113 affordable homes, along with a childcare center that can serve more than 100 children.

Franklin said the funding for Phase 2 includes $60 million in federal tax credits, but that funding was contingent on the county chipping in its share.

“This last $14 million is the last piece of the financial puzzle,” he said.

Once fully built out, the project will also include townhomes available for purchase, behavioral healthcare services and a large public park with athletic fields and a playground operated by the city.

San Mateo County officials are pursuing other options for affordable housing, including using Gov. Gavin Newsom’s Homekey grant program to convert hotels into permanent supportive housing.

In early August, the county was awarded $13 million to convert a Ramada Inn near San Francisco International Airport into a 45-unit permanent supportive housing facility. Another project in Millbrae, currently facing legal challenges from the city and neighbors opposing the project, seeks to transform a sleepy La Quinta Inn into a 75-unit complex.

Unlike the Millbrae project, which does not have support from local officials, Franklin said Daly City embraced the new apartments and homes Midway Village will bring.

“They were unflinching in really wanting to put this site to a much greater use to serve the community than it had in the past,” he said. “That’s what we need — we need more municipalities with that posture if we’re going to work our way out of the hole we’ve dug when it comes to housing in the region.”