This story is part of a series highlighting how the NeighborWorks Capital Equity Fund is helping NeighborWorks organizations expand and preserve affordable housing across the country. In this installment, we feature Eden Housing and its work to construct The Magnolias apartments as an affordable housing option for the most vulnerable residents of Santa Clara County, California.
Every day, the agricultural workers who harvest food in and around Santa Clara County help sustain one of California’s most productive farming regions. Yet many struggle to find an affordable place to live in the area, which is home to Silicon Valley and one of the nation’s most expensive housing markets.
Next year, local agricultural workers will have a new housing option: The Magnolias.
Developed by Eden Housing in partnership with the County of Santa Clara and the City of Morgan Hill and currently under construction, the 66-unit community will provide affordable homes for farmworkers, veterans, and county residents experiencing or at risk of homelessness. Nearly half of the apartments—28 units—will be reserved specifically for agricultural workers, recognizing both their vital role in the local economy and the housing challenges they face.
“These workers are the heart of Santa Clara County,” says Louis Liss, Director of Real Estate for Eden Housing. “We want to make sure that the people that are growing our food have places to live.”
In addition to offering proximity to nearby farms, The Magnolias’ location in Morgan Hill “is also a great community for people to live,” according to Liss. It sits on one of the town’s main streets and is close to many local services and amenities.
The development reflects broader efforts to address affordable housing shortages for agricultural workers in California. Santa Clara County has dedicated tens of millions of dollars to affordable housing as part of a broader effort to support the agricultural industry and its workers, including through its Agricultural Workier Housing Workplan and Agricultural Resilience Incentive Grant Program. Eden Housing also owns affordable housing communities serving farmworkers in nearby Watsonville and Gilroy and has more in the pipeline in Marin and Monterey counties.
The Magnolias was designed to serve multiple community needs within a single development. In addition to housing agricultural workers, the community will provide homes for veterans through the U.S. Department of Housing and Urban Development’s Veterans Affairs Supportive Housing program and for households experiencing or at risk of homelessness through the County’s Chronically Homeless Direct Referral Program and Rapid Re-Housing Program. Additional apartments will serve extremely low-income (up to 30 percent Area Median Income), and very low-income (up to 50 percent AMI) residents.
The project also addresses local housing challenges by meeting large-family requirements, with its five-story design making space for 35 apartments with two bedrooms or more.
“Building larger apartments is especially important in the housing crisis, and the building is specifically designed to serve households at all stages of life, with common spaces including a playground, community room and outdoor terrace,” says Reena Zhang, Senior Project Developer at Eden Housing.
Eden Housing’s long history of creating and sustaining high-quality affordable housing communities in California means it has the experience and partnerships needed for such a complex development.
The organization has coordinated closely with the City of Morgan Hill, County of Santa Clara, and the State of California to make The Magnolias project happen and to address local housing needs. Eden Housing will also work closely with relevant agencies to identify future residents who are among those most in need in the community.
“It takes a village, and the benefit is that all of the partners really want this project to happen and to make it work,” says Liss. “Santa Clara County has been extremely passionate about finding good housing projects and addressing every part of the county that is in need. The city has also been a great partner in ensuring that the project is both doing a good job for future residents and as a neighbor in the community. Everyone’s been supportive of seeing this project move forward.”
Bringing together multiple partners and serving several distinct resident populations made the project more complicated than a typical affordable housing development. But for Eden Housing, that complexity was worth embracing because it allowed the organization to meet a broader range of community needs.
It also underscored the importance of having financing partners that could accommodate a more complicated transaction.
The Magnolias became one of the first developments financed through the NeighborWorks Capital Equity Fund, launched in partnership with National Equity Fund (NEF). Created exclusively for NeighborWorks organizations, the Fund provides Low-Income Housing Tax Credit (LIHTC) equity with favorable terms designed to support nonprofit affordable housing developers while preserving long-term mission alignment. These advantages were especially important for The Magnolias, which combines multiple funding sources, resident populations, and program requirements into a single development.
“There were three different target populations, in a relatively small building, with some programs that were kind of new and different to some investors,” says Liss. “Working with the Fund helped us take on a more complex project that may have been too cumbersome or complicated for a more traditional investor.”
“The ability to take a complicated project and then close it with a really smooth and developer-friendly process was very beneficial,” says Liss.
Thanks to the dedication of Eden Housing, the vision and support of local government, and the flexibility of funders, The Magnolias will become home for farmworkers who harvest the nation’s food, veterans rebuilding their lives, families emerging from homelessness, and other low-income residents. They will have a safe, affordable, and convenient place to call home in one of America’s most expensive housing markets, and an opportunity to continue contributing to their community and region.
