Affordable Housing Plan Heads South : Funding: Board of Supervisors considers having county issue tax-exempt government bonds for Aliso Viejo condominium project.

The county’s efforts to promote affordable housing moved south Tuesday as the Board of Supervisors sought to help a cash-strapped private developer secure $7 million in government bonds for construction of lower-income housing in Aliso Viejo.

The county’s financial assistance would allow the Kathryn Thompson Development Co. to construct 445 condominiums to sell at an average price of $142,000, giving first-time home buyers a better chance to buy into the county’s tough housing market, county officials said.

The plan approved Tuesday is part of a stepped-up effort by the county in recent months to find more affordable housing for both renters and buyers in Orange County.

In October, the supervisors agreed to lend a total of $1.7 million to the city of Costa Mesa and to a private company for development of what could become Orange County’s first single-room occupancy hotel for the working poor, an idea that had been stalled for years.

Last week, developers told the Stanton City Council that they are ready to break ground on an $18-million project that would provide 335 units of housing for elderly people, 33 of them for low-income seniors. The county has provided loans for that project.

The latest target is South County. The supervisors agreed to explore the feasibility of having the county issue tax-exempt government bonds for the Aliso Viejo project and picked the Los Angeles firm of Hawkins, Delafield & Woods to act as bond counsel. But county officials said the developer would reimburse them for any costs incurred in the review.

The supervisors also directed staff members to study the possibility of using uncommitted housing funds to secure a second trust deed for the project. No funds were committed Tuesday.

Thompson was out of town Tuesday, and officials at her development company did not return telephone calls seeking information on the Aliso Viejo project.

County officials said the proposed project, Laguna Audubon Vistas, would sit off the eastern end of Glenwood Drive, west of Aliso Creek. Three miles from the ocean, the site overlooks Aliso and Woods Canyon Regional Park.

Site grading has already begun, but the developer has run into financial problems in raising private funds for construction, said County Administrative Officer Ernie Schneider. County officials believe that they may be able to help by issuing bonds to finance the project, while generating jobs and affordable housing at the same time, he said.

“This is a new concept in terms of selling bonds to generate the money to build the project,” Schneider said. The county might not ordinarily undertake such a public-private partnership, but Thompson’s “proven track record” for providing lower-income housing in her developments makes it worth exploring, he added.

“If the project makes sense financially, we’ll go forward with it. If it doesn’t, we won’t,” he said.

Eileen Walsh, director of finance and insurance for the county, said the county’s financial assistance in the project would come in exchange for certain restrictions aimed at ensuring that the condominiums go toward lower-income buyers.

For instance, she said, the county would likely seek an agreement stipulating that the condominiums would be sold to first-time buyers who intend to live in the condominium, rather than renting them to others. And the units would be reserved for buyers who fall at specific income levels below the county’s median income, which is now about $44,000, she said.

In approving development of the entire Aliso Viejo area, the county has already required that developers set aside 25% of their units for affordable housing, Walsh said.

“What’s unique about this,” she said, “is that it will be 100% affordable housing.”