Medford City Council has approved a zero-interest, $475,000 loan to help finance a proposed 36-unit workforce housing project.

The three-story apartment complex is planned for 2100 East Barnett Road and was previously designed by ORW Architecture.

North Development Group is taking over the project and has also applied for an $8.8-million loan from Oregon Housing and Community Services.

With the loan from City Council, North Development will buy the 1.06-acre Barnett Road property just east of Ellendale Drive along with ORW’s design package.

The property is currently vacant land but is located near Asante Rogue Regional Medical Center and other medical facilities.

“We were hoping to start construction this year,” said Darin Murphy, founder of North Development.

He said the state approval has taken longer than expected, but he hopes to have it in the near future.

“We really need to submit the building permit as soon as this comes in,” he said.

If all goes well, Murphy said he hopes construction starts next year and finishes within about 12 months.

As part of the loan agreement with the city, which was approved Sept. 5, the project has to remain affordable housing for a 30-year period.

Murphy said the studio, one- and two-bedroom units will be rented based on incomes that are 60% or lower of area median household income, or $41,491. He said a rough estimate of the rents for the apartments, which will likely change by the time the units are available, would be $1,185 for a two-bedroom, $900 for a one-bedroom and $850 for a studio.

Since the design of the project has already been developed by ORW, Murphy said a lot of the planning hurdles have already been cleared.

“The benefit of this project was a quicker turnaround,” he said. “We can really accelerate the schedule.”

The entire project should cost $11 million, Murphy said, with most of the money coming from the state and the city. Some private financing has already been lined up.

Murphy described the units as “workforce housing,” which will be on the smaller side.

He said the construction of the apartments will be with the goal of making them durable to continue to provide affordable housing over at least the 30-year period.

To ensure they remain affordable, deed restrictions will be placed on the property.

The city’s Housing Opportunity Funding will provide the $475,000, which is derived from a construction excise tax.

Medford’s Site Plan and Architectural Commission had previously approved the project.

Rogue Valley Transportation District offers bus service along Barnett Road.

The selection of North Development Group to receive city dollars was an outgrowth of a meeting held by the Medford Housing Advisory Committee. City Council earlier this year also reviewed the project.