City to consider housing, hotel proposed next to UC Merced. How much will be affordable?

City leaders are poised to review the merits of a proposed housing, hotel and commercial development that would build over 900 new dwelling units next to UC Merced and expand Merced further north ⁠— if the land is annexed into the city.

The Merced City Council will vote on whether to generally support or oppose the annexation project, titled UC Villages, during Monday night’s meeting.

Merced community members will have the opportunity to comment on the proposal prior to the Council’s vote.

According to preliminary planning documents, at least 12.5% of homes would be designated affordable housing spread across all income levels.

The project applicant also plans to hire local contractors and workers to build and operate the project, a letter from the applicant to the city says.

The Council’s vote on Monday is an early step in the city’s annexation pre-application process.

Plans to address student housing shortage

Situated at the west side of Lake Road, south of Bellevue Road, the 35.6-acre mixed-use development is one of several recently-proposed annexation projects poised to build much-needed housing units near UC Merced.

The imagined north Merced development includes plans for 922 total dwelling units comprised of five, four and two-story apartment buildings geared toward student housing, according to city documents.

Preliminary plans envision amenities including a 3,000 square-foot recreation center, work and study areas, space for recreational activities like corn hole and pickle ball courts, bike repair stations and a recreation pool.

The mixed-use project also has plans to construct over 1 million square feet of retail and hospitality space, including a 161-room, five-story hotel.

The tenuous availability of housing within a typical college student’s budget was made glaringly clear last year. With roughly 1,000 students still struggling to secure local housing less than a month before the start of a new school year, UC Merced was forced to delay the first day of in-person classes.

The crisis was spurred when Merced’s long-standing housing difficulties were exacerbated by construction delays at Merced Station, an off-campus housing development marketed toward students. About 500 students who planned to move there before school began were unable to and joined the ranks of around 500 others who already lacked a place to live.

The dilemma underscored the severity of Merced’s housing woes.

Proposed housing developments located in north Merced, especially near the UC Merced campus, have been touted as a way to alleviate the shortage of homes for a growing number of local students.

“The UC Villages Project is primarily designed to complement the University of California Merced, which has seen as significant increase in student enrollment and capital investment,” the project applicant said in the letter to the city.

“For instance, the University of California Regents adopted and funded the UC Merced 2020 Plan, which is an investment of $1.3 billion to fund enrollment increases and amplify student housing development and expansion of the UC Merced campus.”

Merced residents and city leaders have also frequently advocated for more housing that’s accessible to lower-income community members in the generally more affluent north region of the city.

Those proponents have criticized what they see as an over-concentration of low-income units in south Merced, which is often viewed as more disenfranchised and lacking in essential resources like groceries and medical care, compared to north Merced.

Critics of similar projects have aired concerns about aggravating traffic and parking issues in north Merced, as well as the city infrastructure’s ability to support the new developments.

Will the plan draw support from Merced City Council, residents?

While the UC Villages project strikes at addressing several Merced-area needs, city documents also note a few concerns raised during meetings with city and Merced County Local Agency Formation Commission (LAFCO) staff.

The project site is owned by UC Villages LLC, managed by Sid Lakireddy, and represented by Ripon-based J.B. Anderson Land Use Planning.

In his letter to the city, Lakireddy stated his support for its recently adopted policy requiring new housing projects to devote at least 12.5% of units to affordable housing, with a few exceptions. Affordable units have costs fixed so that lower-income occupants spend no more than 30% of their income on housing.

Lakireddy in the letter also noted his goal of hiring local contractors and workers.

“My preference is to use the same companies to build-out this multi-phased and multiyear project,” he said. “I will do all that I can to secure local organizations to work with me on this great project.”

Three City Council members recently rejected another proposed pre-annexation project located near UC Villages. They cited a lack of attention to affordable housing and hiring locally as reasons for refusing to support the development in its current form.

The opposition resulted in the project failing to garner a show of support from the Council when it came time to vote. Whether UC Villages is able to win over potentially skeptical Council members remains to be seen.

Meetings with LAFCO staff, however, raised possible concerns over the city’s ability to provide the necessary infrastructure and services for UC Villages, along with the other proposed pre-applications and official annexations moving forward in north Merced. Wastewater concerns were noted in particular.

According to city documents, it’s estimated that there’s at least enough interim capacity in the wastewater collection system for up to 4,637 equivalent dwelling units, although that number is still being refined and will likely increase.

“The UC Villages project, along with other annexations active and proposed, would exhaust that capacity, so the phasing of each project will be critical to ensuring capacity for each project,” city documents say.

“With this and other annexation projects that could be moving forward, the City’s wastewater system will certainly need to be expanded to accommodate all these new users.”

Community members can voice their support or concern for the proposed UC Villages project by attending the Merced City Council meeting Monday at 6 p.m.

Written comments up to 300 words long can also be emailed to cityclerk@cityofmerced.org until 1 p.m. the day of the meeting.

Emails should specify which portion of the the agenda the comments pertain to. Comments may be left by voicemail by calling (209) 388-8688 no later than 1 p.m. the day of the meeting.