EL CERRITO — Progress continues on plans to build hundreds of new housing units at the El Cerrito Plaza BART Station after the city council agreed to offer a $350,000 loan and as staff prepares to apply for up to $50 million in state funding to move forward phase three of the project.

Over the span of about five years, 743 new homes across six buildings are slated to be built on 8.3-acres owned by the Bay Area Rapid Transit agency. Once complete, rents of about half of the homes will be listed at below market rate and the development site will include 22,000 square feet of open space, 2,100 square feet of retail space and potentially a 20,000-square-foot library.

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Construction on phase one, a 70-unit affordable housing development on the corner of Richmond Street and Central Avenue, is expected to begin later this year. That portion of the proposal was awarded a $39 million grant in 2024 through the state’s Affordable Housing Sustainable Communities program, adding to the now roughly $95 million in grants the project already has received.

Now, the city, BART and its development partners – Holliday Development, Related California, and Satellite Affordable Housing Associates – are seeking another $43.4 million grant through the same state program to back phase three. That portion of the project calls for the development of 84 affordable units on Parcel C East, bound by the Oak Street Busway and Fairmount Avenue, directly across from the El Cerrito Plaza BART station.

Those units will be rented at rates affordable to people making between 30% and 60% of area median income, or between $33,600 and about $67,000, according to 2025 state income limits. Another 197 affordable units will be built out under phases four and six, while phases two and five call for the construction of 392 market-rate units.

El Cerrito Mayor Pro Tem Gabe Quinto lauded the development as a force for creating equitable living opportunities for people of all incomes, noting that what once were starter homes in the city when he was young are now worth more than $1 million. The project in its entirety will also help the city in achieving its Regional Housing Needs Assessment goals, which call for the creation of nearly 1,400 new homes by 2031.

“This is something that El Cerrito has been waiting for for a long time,” Quinto said. “We’re going to continue to be a melting pot and a diverse community, even more diverse than when I was growing up.”

Affordable Housing Sustainable Communities program grants, administered by the Strategic Growth Council and implemented by the California Department of Housing and Community Development, are meant to help reduce greenhouse gas emissions by funding transit-oriented development projects.

If phase three is awarded the grant, $29.7 million would be used for development costs, most of which would be in the form of a loan to the developer. Another $11.8 million would go toward sidewalk, crosswalk, pedestrian and bike transportation improvements and to purchase a fleet of rail cars for the Santa Clara Valley Transportation Authority, which uses BART infrastructure and is a transit partner in the application.

The final $929,474 of the grant would fund transit passes for future project residents, anti-displacement efforts for low-income El Cerrito residents and workforce development programming for young residents interested in construction, real estate development, architecture and engineering, civic engagement or urban design.

Councilmembers gave staff the go-ahead to apply for the grant, which has a May 28 deadline and a pool of $775 million to give out. Housing-Economic Development Manager Aissia Ashoori said grant winners will be notified by the end of the year.

In the meantime, the council also agreed to issue the developer a $350,000 loan for pre-development costs of phase three. The loan represents about 13% of the total $2.7 million needed to cover pre-development expenses, which include legal fees, professional and consultant services, design and engineering work and other soft costs, according to the staff report.

“This project is important beyond this project,” Councilmember Rebecca Saltzman said during a meeting Tuesday. “A city our size just can’t get money like that on our own, but by partnering with BART and with housing development, we’re getting all of these improvements that are going to be beneficial for all residents of El Cerrito, not just the people who live there.”