The Folsom City Council early next year is expected to consider reducing the number of affordable units attached to large home-building projects.

The proposal to change the terms of a contested city ordinance has yet to reach the City Council, but it already has housing advocates lining up with their concerns.

The issue is significant, since housing advocates for years have accused Folsom of failing to adequately provide for affordable housing for its low-income residents.

The most recent criticism came in early 2011 after the city eliminated an ordinance that served as the centerpiece of its affordable housing initiatives.

Housing advocates, including Legal Services of Northern California and the Sacramento Housing Alliance, went to court to argue that the City Council's abandonment of the requirement conflicted with the city's own housing element.

A judge agreed.

So the old ordinance, requiring that 15 percent of every home-building project of 10 units or more be set aside for affordable units, remained intact.

While the city has appealed the case, Folsom officials are also proposing that the set-aside now be lowered to 10 percent.

Housing advocates say the city is turning its back on residents who work in the city but often can't afford to live there.

"Folsom is a perfect example of a city walking away from the people in their community who need low-income housing," said Bob Erlenbusch, executive director of the Sacramento Housing Alliance.

City officials say that's not the case.

Revising the ordinance is a practical step that will, in the end, spur more affordable units, they say. The city also uses a range of other strategies, including down-payment assistance, development fees and tax-exempt bond financing.

"When times are very tough and the price of housing drops dramatically … profit drops," Folsom's Community Development Director David Miller told The Bee. "So to expect the developer to pay to subsidize (affordable housing) at this point in the market is kind of out of the question.

"That's why there were no (low-income) units built in the last four to five years," he said. "Fifteen percent of zero is zero."

The proposed revisions in the ordinance are not expected to reach the City Council until early next year.

Specifically, housing advocates are concerned about whether the new approach will generate enough units to meet the needs of the city's lowest income residents.

"We're happy that the city intends to retain the inclusionary housing ordinance," said Sarah Ropelato, attorney for Legal Services of Northern California.

But, she added, "we have concerns about whether the adjustments to be imposed on the ordinance will actually be effective."

The ordinance requires builders to be responsible for generating the subsidies needed to lower the costs of those homes, typically through higher prices on market-rate units.

It was that subsidy requirement two years ago that prompted the City Council to eliminate the ordinance outright.

The reasoning: Developers already were stalled by the declining real estate market. The subsidy added a second layer of disincentive to build.

Under the proposed change, more than two-thirds of affordable units would be designated low-income. The other nearly one-third would be available to very low-income buyers and require larger subsidies.

Builders also could pay a fee in lieu of the set-asides under the proposed changes.

Ropelato said there remains a question about whether the in-lieu fee – calculated from a variety of factors – would be adequate to meet the city's housing needs.

And she voiced concern that the revisions would put too little emphasis on the population in Folsom with the greatest need – those who have very low incomes.

State housing law "assures that a city like Folsom plans for and actively strives to meet its fair share of the housing needs in the Sacramento region … so that folks working in Folsom can actually live there with their families," Ropelato said.

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