A housing project in Seaside will be a test for how the market meets the moment.

On the Monterey Peninsula, the lack of available water is often highlighted by public agencies, and residents that favor a local desalination project, as the primary reason the region lacks adequate housing.

Just how true that is remains an open question – there are several other hurdles for new development – but in Seaside, it’s about to be put to the test.

On Sept. 28, Cal Am inked an agreement with the city for the transfer of sufficient water credits to set a meter to serve the long-stalled Ascent housing project, which is planned to be built on 2.85 acres along upper Broadway Avenue. The plans call for 106 units – a mix of one-, two – and three-bedrooms – 16 of which will be affordable.

Now it’s just a matter of the financing as to when the dirt will get moving. The project’s developer, Utah-based Cruachan Capital, has until Nov. 15 before its approval permits expire – the project was approved in November 2019 – and needs to either get the project started or ask for an extension.

The development is unsubsidized, which means the market-rate units must generate enough profit to offset any losses created by the affordable ones. (Cruachan representatives did not respond to calls for comment.)

And the added cost of the water credits, which Seaside has spent a small treasure in developing over the past few years by transitioning its golf course to recycled water, will be borne by the developer. No money will change hands between Cal Am and the city.

City Attorney Sheri Damon compares the arrangement to “renting” Seaside’s water credits until the state’s cease-and-desist order against Cal Am is lifted.