Erika D. Smith

Developers also have a plan to solve Sacramento’s housing crisis. You’ll hate this part

Rent control advocates chant outside hearing at California State Capitol

Rent control advocates with the Alliance of Californians for Community Empowerment chant in support of repealing the Costa Hawkins housing act outside at joint Senate and Assembly hearing on Wednesday, June 20, 2018 in Sacramento.
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Rent control advocates with the Alliance of Californians for Community Empowerment chant in support of repealing the Costa Hawkins housing act outside at joint Senate and Assembly hearing on Wednesday, June 20, 2018 in Sacramento.

With rent increases that continue to rank among the nation’s highest and scores of tenants who continue to worry about being forced into homelessness, there are plenty of reasons for Sacramentans to be skeptical of the new wave of promises coming from developers who have made so much money in the booming housing market.

As a renter in midtown, I know I am.

So it will be interesting to watch the public reaction to their still-evolving counter proposal to Mayor Darrell Steinberg’s plan to address the affordable housing crisis when the Sacramento City Council takes up the thorny issue at an August workshop.

My prediction? It’s not going to go well.

While the mayor is talking about stabilizing rents for vulnerable tenants and forcing landlords to provide legitimate reasons for terminating leases, developers and their allies in the business community are talking about ways to carve out some of the same regulatory and financial advantages that they’ve enjoyed in midtown and downtown, where high-priced condos and apartment buildings have popped up in recent years.

It’s not that this is their only idea on affordable housing. Far from it.

Like Steinberg, developers wisely support streamlining the city’s cumbersome building permit process, securing loans and matching state funds, passing a tax increase in Measure U that would help replenish the city’s depleted housing trust fund, as well as provide financial aid to renters and affordable housing projects.

But they also want waivers or long-term deferrals of “onerous” building fees for affordable and, tellingly, market-rate housing projects in “disadvantaged” urban neighborhoods near transit. You know the places: Del Paso Heights, near Oak Park and Meadowview, to name a few. These are the neighborhoods where renters who have been priced out of other neighborhoods have ended up, in lieu of being forced out of the city entirely.

The Orwellian-sounding Citizens For Affordable Housing, a coalition that includes, among others, the Sacramento Region Business Association and California Apartment Association, swears it isn’t so, but this sounds an awful lot like a gateway to gentrification.

To advocates of affordable housing, these are fighting words.

“If they’re trying to look for other areas to reduce any type of requirement, there is going to be a huge push back from the community, and it will be a very well-organized and well-funded effort,” said Darryl Rutherford, director of the Sacramento Housing Alliance. “They need to think differently.”

Indeed, they do. And if you’re worried about that, contact your council member. Because just remember how we got here.

Steinberg, in many ways, inherited — and, in one instance, helped create — a mess when he became mayor in 2016. Four years prior, Gov. Jerry Brown, with Steinberg’s help as president of the Senate, eliminated the state’s redevelopment program, tying the hands of cities that saw it as a reliable source of cash to subsidize housing.

Then, in 2015, when residential construction was at a standstill, a desperate City Council scrapped its “inclusionary housing” ordinance, which had forced developers to set aside 15 percent of the units in any project built in a “new growth” area, such as North Natomas, for low-income residents.

Instead, at the urging of a business leaders touting a plan they said would boost the supply of affordable housing, the council swapped the inclusionary requirement for a ridiculously cheap fee that was supposed to fill a trust fund for such projects. Even worse, the council stupidly agreed to a list of exemptions so broad that almost all of the high-density, infill housing projects under construction in the central city over the past three years have been exempt, leaving the fund near empty.

Combine that with a sudden influx of Bay Area refugees, and suddenly we have skyrocketing rents and homelessness. Of the 5,500 housing-unit building permits the city issued between 2015 and 2017, only 98 were for moderately priced apartments or houses.

To mitigate this, developers argue that instead of the 5 percent annual cap on rent increases that Steinberg wants, the city should streamline its building permit process and waive fees — though not the one that supports the trust fund — to make it easier to build more housing. Because Sacramento’s problem is supply, they insist more housing will bring down rental prices overall.

But if downtown and midtown are supposed to offer proof of concept, there’s a problem. While there has definitely been a lot of new construction, it has mostly been the wrong kind of housing — pricey condos and apartments that have only accelerated gentrification.

“We all foresaw this downtown renaissance happening,” Rutherford said. “We said, ‘What are you going to do? Create this exclusionary environment?’”

The answer, unfortunately, has been yes. And now developers and the business community are again promising to deliver affordable housing in exchange for rolling back fees.

Rutherford has other plans. Capitalizing on last year’s passage of Assembly Bill 1505, which reversed a court-imposed ban on inclusionary housing laws, he and other advocates are planning to ask the City Council reinstate the ordinance it scrapped in 2015. But this time, they want it to apply citywide.

That’s likely to irk developers, who historically have argued that such a requirement to add affordable units deters new construction. But given that their alternative could set off a gentrification bomb, what makes far more sense is, in exchange for waiving city building fees, developers agree to a citywide inclusionary housing ordinance and a meaningful increase in the $2.68 per square foot fee that goes into the housing trust fund.

That’s the only way a skeptical public can have a real guarantee that developers will do what they’ve promised — build affordable housing.

Erika D. Smith: 916-321-1185, Erika_D_Smith.

Actor and activist Danny Glover spoke at the Capitol in Sacramento on Monday, May 14, for the California Poor People's Campaign. The campaign seeks to address the “crisis of poverty, racism, militarism, and ecological devastation.”

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