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Affordable Housing for Everyone
Affordable Housing for Everyone: Solutions to Sonoma County?s Housing Crisis reviews the implications of skyrocketing housing costs for low and moderate-income residents and suggests model policies and political strategies for expanding the supply of affordable housing and, ultimately, moving the county toward a more sustainable development path. The report argues that an aggressive local response is necessary to avert the threats posed by the housing crisis to the environmental, social and economic health of the region?namely sprawl, heightened inequality in real incomes and overcrowding?which in turn can create a drag on economic development. It analyzes changes in the county?s housing market through the lens of the ?housing wage? (the hourly or annual wage that it takes to afford a given home price or rent), and considers these changes in light of income distribution and labor market structure in Sonoma County. Based on housing needs that are indicated by these patterns, the report recommends five key local policies and programs that can expand the supply of housing affordable to low- and moderate-income families, emphasizing that they must be undertaken as part of a broader strategy of promoting more equitable, high-road economic development in order to effectively alleviate the housing crisis. Finally, this report emphasizes the importance of political mobilization and alliance formation among key constituencies?specifically, labor unions, environmentalists and leading producers?to make adequate housing reform and sustainable development possible.
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Housing Study
UC Research Provides Fodder for a Wider Conversation
March 23, 2003
Press Democrat Editorial
Every community must have a skilled, healthy and adequately housed workforce to have a sustainable economy.
-- A new study called "Affordable Housing for Everyone"
Whether people agree with every word, this new study -- published by the group New Economy, Working Solutions and the Service Employees International Union Local 707 -- should be required reading for every elected official in Sonoma County. Through careful research, UC Berkeley doctoral candidate Nari Rhee lays out a compelling story about the need for housing that is affordable to low- and middle-income workers. The report notes that "the long commutes borne by young families who move to distant locations for affordable housing exacts a toll on family life."
In addition to the personal toll on workers, lack of affordability means "Businesses will become less competitive as they face difficulty in recruiting talent because of high housing costs..."
In other words, without adequate housing, Sonoma County's economy will continue to "hourglass" -- with middle-income jobs becoming an increasingly narrow section of the workforce.
The menu of solutions presented in the report are, for the most part, sensible responses to the problem. A housing trust fund and the creation of "limited equity co-ops" are two ideas that local governments should pursue.
But other solutions highlight the intractability of the affordable housing problem.
For example, the author proposes a "job-housing linkage fee" that would be applied to new industrial and commercial development.
It's an idea that might have seemed more plausible a year ago. But the recent exodus of manufacturing jobs, at Agilent and elsewhere, in combination with the growing supply of vacant commercial space, means there will be no new development available for taxation.
Moreover, it becomes increasingly difficult to argue that Sonoma County should provide one more reason for manufacturing jobs to locate somewhere else.
In effect, new obstacles to middle-income jobs would accelerate the problem that the reports purports to resolve.
This UC study provides fodder for the public debate -- even if some recommendations need to be chewed with care.
Santa Rosa Press Democrat
March 23, 2003
The County Housing Crisis: Toward A New Agenda
After decades as one of the more affordable places in the Bay Area, Sonoma County is now the fifth least affordable housing market in the U.S. Only the richest one-fifth of Sonoma County households can afford the median price home. Lower-income households have been the hardest hit by the housing crisis, and even middle-income families are hurting. The crisis has not abated with the recession, and a recent report by the California Budget Project indicates it will only get worse when the economy recovers.
How did this happen? The root cause is the rapid growth of an 'hourglass economy' accompanied by a diminishing supply of affordable housing. According to data from the California Employment Development Department, employment in Sonoma County grew by a whopping 45%--over 60,000 jobs--between 1987 and 2001. About two-thirds of these jobs were added after 1995, when housing costs really began to soar.
Yet a majority of the new jobs are concentrated in the low-wage retail, tourism, and business services sectors and pay no more than $30,000 annually. Simultaneously, luxury homes have been grossly over-produced in the last decade, while municipalities in the county produced less than one-third of the lower-income housing need determined by the Association of Bay Area Governments.
This pattern will not change in the foreseeable future without dramatic housing policy reforms; yet actual reform has proceeded incrementally. This is due not to a shortage of policy options, but primarily to the lack of political will among most elected officials.
In order to move the policy debate forward, New Economy, Working Solutions (NEWS), a nonprofit research and educational organization in the North Bay, and Service Employees International Union Local 707, the largest union in the area, initiated a housing study last summer in collaboration with the UC Institute for Labor and Employment. The report "Affordable Housing for Everyone" offers a multi-faceted policy agenda to increase the supply of affordable housing and is based upon housing policies and programs that have been successful elsewhere in California.
The study recommends that city and county government adopt a package of new fiscal and land use policies to address the crisis:
1) Establishment of a Housing Trust with permanent funding from taxes and fees. Widely adopted throughout the U.S., housing trusts offer the benefit of flexible, ongoing funding for affordable housing that does not have to be negotiated through public budget battles. A local public revenue source is important to fully realize this benefit. The Sonoma County Housing Leadership Coalition recently established a housing trust, but it does not have an adequate public funding source.
2) County-wide adoption of the Jobs/Housing Linkage Fee. Currently being considered by the jurisdictions of Sonoma County, this is a fee imposed on new commercial, industrial and warehouse development in order to mitigate the housing impacts of the jobs that they create. Since the late 1980s, linkage programs have helped finance thousands of affordable units in cities like San Francisco and San Diego; they have also been adopted by smaller cities like Milpitas and Menlo Park.
3) Increase redevelopment agency contributions for affordable housing to 30% of the tax increment. Presently, most of the redevelopment agencies in Sonoma County spend only the 20% of their tax revenues required by state law. Increasing the amount to 30%, as cities like San Jose and Santa Clara have done, would generate millions dollars of additional funding.
4) Strengthen inclusionary zoning. Inclusionary zoning ordinances, which require for-profit developers to include affordable units in their housing projects, have been widely adopted in the county. However, many jurisdictions exempt too many developments and/or allow most developers to pay relatively low fees in-lieu of affordable units. Unless for-profit housing development provides a substantial share of affordable housing, there is no hope of alleviating the housing cost burden for low- and moderate-income families.
It is important to stress that these policies are neither radical nor experimental. Rather,they reflect two decades of successful policy innovation by states and municipalities in response to dramatic federal cutbacks in affordable housing funding.
As a rapidly urbanizing region, Sonoma County has made some progress in policy adoption but still faces a steep learning curve. The county needs to develop a multi-pronged strategy hand-in-hand with a new regional consensus among key "stakeholders" about housing priorities.Coalition-building between environmentalists, labor, affordable housing advocates, and the business community is particularly vital to the implementation of a comprehensive housing agenda that will ensure the well-being of working families and the long-term economic health of the region.
Nari Rhee is a Doctoral Candidate and researcher at the UC Berkeley Department of Geography. She is the author of the report, "Affordable Housing for Everyone: Solutions to Sonoma County's Housing Crisis" which is available online at: http://www.SEIULocal707.org
Published on March 20, 2003
Santa Rosa Press Democrat
REPORT URGES FEE ON COMMERCIAL DEVELOPMENT FOR LOW-COST HOUSING
BY MARY FRICKER
A coalition of labor, religious, environmental and housing advocates is calling for implementation of a fee on new commercial development in Sonoma County to help build low-cost homes.
A year ago, the city of Santa Rosa endorsed the concept, as long as the county and the other eight cities agreed and some difficult issues could be resolved, but action faltered with the economic downturn and is still months away, officials said Wednesday.
"It is time for our elected officials to take immediate action," said Paul Carroll, field representative for Service Employees International Union Local 707 in Santa Rosa. The union is a leading member of the coalition.
The call for a fee on commercial development to help build low-cost housing came as the coalition prepared to release a study on housing needs in Sonoma County.
The 65-page report, which will be presented to a forum Saturday, concludes that Sonoma County's track record of producing low-cost housing is "dismal," and it makes five recommendations for boosting production:
* Identify a permanent local revenue source for the county's new Housing Trust, which will fund low-cost housing.
* Establish a countywide fee on new commercial development to help build low-cost housing, based on the theory that new jobs increase the demand for housing.
* Increase the money that redevelopment agencies contribute to low-cost housing.
* Establish "limited equity co-ops," where residents get to share in ownership.
* Strengthen affordable housing opportunities in general plans, through such policies as identifying enough sites, zoning for higher densities and requiring developers to include some low-cost housing or pay a fee.
The Santa Rosa Chamber of Commerce has opposed a housing fee on commercial development, saying it would raise costs to businesses and could scare away jobs.
Meanwhile, the economy is not cooperating. The county lost jobs last year and commercial vacancies have skyrocketed in some areas.
"When we started, it made a lot of sense," said Santa Rosa Councilwoman Janet Condron, who participates in a countywide group exploring the commercial fee. "Right now, with the layoffs and cutbacks in industry and the economic situation as it is, the timing is terrible. I'm really struggling with this right now, personally. I think there is going to be a lot of debate over it."
The coalition report contends Sonoma County fell more than 7,000 units short of adding the lower-income units it needed between 1988 and 1998, the last year data was available. If that pattern continues, low-income residents won't be able to form wealth through homeownership, workers will be forced into long commutes and businesses will be hurt because it will be hard to recruit workers, the report says.
The shortfall in low-cost housing has meant that demand far exceeds new units, as it did for the 54 homes in the Bellevue Ranch subdivision completed last year by non-profit Burbank Housing Development Corp., Sonoma County's largest builder of affordable housing.
The new report was sponsored by Local 707, the largest union in the North Bay, and New Economy, Working Solutions, a research and public policy organization in Sonoma County that is supported by North Bay labor, religious and other community groups.
The study was funded by the UC Berkeley's Institute for Labor and Employment and prepared by Nari Rhee, a doctoral candidate at the Berkeley who has a master's degree in urban planning from UCLA.
The report was released to coincide with meetings that cities and the county have been holding for about two months to consider the commercial development fee.
"Hopefully, the information will contribute to this policy discussion," said Martin Bennett, acting director of New Economy, Working Solutions.
In the meetings, political leaders are trying to find ways to make the commercial development fee acceptable to all jurisdictions, according to Councilwoman Condron, who represents Santa Rosa in the discussions.
The meetings grew out of a study commissioned by the county and all nine cities and released in December. That study concluded that a fee of $2.08 to $3.59 a square foot could raise $35.5 million over five years, and build 1,200 housing units. The author of the report said the fees would result in only minimal increases in rents.
In her report, Berkeley researcher Rhee said Sonoma County has not shown that it has the political will to make the hard decisions needed to provide affordable housing.
"The grassroots base of the housing movement is weak," she reported.
She said progress will depend on three main groups -- environmentalists who reconcile themselves to higher densities, business leaders who realize that affordable housing is in their long-term interests and labor unions that mobilize an affordable housing constituency.
The coalition advocating for affordable housing includes the Faith-Based Coalition, the Housing Advocacy Group, Greenbelt Alliance, the Leadership Institute for Ecology and the Economy, the North Bay Labor Council, the Living Wage Coalition and the Sonoma County Latino Democratic Club.
The coalition's ``Housing Action Forum'' on affordable housing will be 9 a.m. to noon Saturday at Santa Rosa Junior College's Doyle Student Center at Elliott and Mendocino avenues.
A newly released report on affordable housing in Sonoma County, "Affordable Housing for Everyone -- Solutions to Sonoma County's Housing Crisis," is posted at www.seiulocal707.org.
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