An affordable senior housing complex whose tenants are to include homeless residents will be built at Leigh Avenue and Southwest Expressway.

The San Jose City Council approved the $42 million project June 20 and agreed to provide a $9 million loan for it. Renters will be low-income residents 62 or older.

“It’s a pretty unique building, and it definitely serves our city’s aging population well,” said Patrick Heisinger, acting housing division manager for the city.

About one third of the 63 one-bedroom units will be reserved for homeless residents, who’ll also receive case management services from nonprofit Abode Services.

Seniors make up the fastest growing segment of the overall population and the homeless in Santa Clara County, according to Geoffrey Morgan, president and CEO of project developer First Community Housing.

Another third of the development’s residents will also have in-home supportive care provided by the county.

Tenants will pay no more than 30 percent of their monthly income, leaving those living on Social Security checks with more money for food or medication.

The building’s proximity to the light-rail station is expected to make it easy for the seniors to use their free annual Eco Passes from the Santa Clara Valley Regional Transportation Authority.

A retail component of about 7,000 square feet intended for dental or medical offices will be incorporated at ground level, bringing in some sales tax revenue for the city.

The new project estimate is 20 percent higher than the original $35 million price tag, but Morgan said the old estimate was “much older” and didn’t reflect increased construction costs since First Community took control of the site in 2008.

But there was one benefit to buying the parcel almost a decade ago, even though First Community didn’t have the cash to build on it until now.

“Even though costs continue to go up over time, the one bright lining is we probably paid half of what the current land value is,” Morgan said.

Waiting until this year to ask for the money has also paid off.

“The really great news is that by waiting, we’re able to get project-based vouchers for the entire building,” he added.

First Community is also applying for $9 million from the $950 million affordable housing bond Measure A that was passed last year by voters, according to public documents. Other funding sources such as state low-income tax credits and conventional loans will also be tapped.

“They will apply to the county in the fall for those funds, and they will apply for their tax credits in early 2018–likely March,” Heisinger said.

Developers hope to have blueprints finished early next year and to break ground on construction next fall.