All sides in Sacramento’s affordable housing debate agree on one thing. The city’s current ordinance needs to be updated, made more flexible and aligned more closely with market realities.
While city housing officials have not yet issued a final plan, they have offered a framework that hints strongly about what that final plan will look like.
On Tuesday, the City Council approved a housing policy document that will go to the state Department of Housing and Community Development for review and comments as required under state law.
While nothing is final, that document does signal a shift in city policy in several key areas. The proposed housing element states that Sacramento “shall revise its mixed income housing ordinance to promote affordable housing city wide.” Previously, the ordinance applied only to new growth areas, specifically to Natomas, Curtis Park and the downtown railyards. Most city infill projects were exempt. The policy change means that all housing developments throughout the city will be covered by the new ordinance, a good thing.
In addition, for the first time the policy states Sacramento will require “an affordable housing impact fee for all new housing units.” Under current rules, developers are required to make 15 percent of a new housing development’s units affordable – 10 percent affordable to low-income families and 5 percent to very low-income families. Under the new policy, some developers, especially smaller ones, will be allowed to pay a fee in lieu of actually building the affordable units. The money will be deposited in the city’s Housing Trust Fund to finance construction of affordable units.
The new policy makes sense for a number of reasons. A fee provides a steady flow of income that can be tapped for affordable housing. With the elimination of redevelopment agencies, a new source of money is sorely needed.
Fees also give developers and the city flexibility. In many cases, especially with small developments with tighter profit margins, building affordable units is not financially feasible. Fees provide an alternative way for small developers to contribute to the goal of affordable housing without actually having to build it.
The city is also looking at a new zoning concept dubbed “affordable by design.” That means a certain number of units within a development would be multifamily – mostly duplexes and triplexes – and therefore cheaper to buy or rent than standalone single-family homes. Some of Sacramento’s most successful neighborhoods – think Curtis Park, Old Land Park and East Sacramento – have duplexes and triplexes spread throughout, thoroughly integrated within the fabric of the community. They give low-and moderate-income individuals an opportunity to live in premier neighborhoods, promoting a healthy mix of incomes.
All the changes contemplated – citywide application, fees in lieu of housing and affordable by design – make sense in theory. Implementation will be the key. The fee has to be high enough to provide a sufficient number of low-income units and yet not so high that it stifles development. When developers pay fees instead of building units, care must be taken to ensure that all housing for the poor is not overly concentrated in low-income neighborhoods. Some effort has to be made to ensure that those duplexes built under the “affordable by design” model are actually made available to the poor while not encumbering those units with so many restrictions that they become difficult to market.
The broad policy is in place. For the next few months, stakeholders will debate the details of Sacramento’s new ordinance. There are challenges but also opportunities to make Sacramento a better place for all to call home.