As the mayoral race steps into its next phase, candidates are quick to highlight the city’s urgent need for affordable housing. Yet the rhetoric rarely addresses the real issues.
Take, for example, mayoral candidate Dr. Richard Pan’s assertion on Capital Public Radio that a single housing unit costs an astronomical $600,000 to build, and that it’s more cost effective to buy a house in Natomas than build an affordable housing unit. While that figure may seem staggering, it doesn’t tell the whole story.
The $600,000-per-unit estimate only reflects the cost of a federal- and state-funded project — the city pays only a fraction of that cost. At the same time, the federal and state funding includes a wide variety of cumbersome requirements that delay projects and send costs soaring. If you want to take advantage of tax credit financing and grant funding, you need to jump through hoops, including prevailing wage costs.
But there are many other avenues to build affordable housing that don’t cost nearly as much. In the private sector, developers routinely include affordable housing in projects for $200,000 to $350,000 per unit, taking advantage of density bonus incentives in cities where leadership has taken steps to speed the path to low-cost housing.
As an architect, I lead a team that is adept at navigating these complexities, but we still encounter roadblocks. We need cooperation from city and state leaders to create regulatory conditions more favorable to fast, economical affordable housing projects.
If the next mayor wants to make a difference, there are several steps the city can take in the short term to streamline processes, remove bureaucratic hurdles and foster a more development-friendly environment for affordable housing, whether federal and state funds are used or not.
Sacramento has taken some key steps in the recently adopted 2040 General Plan, adding more flexibility and encouraging more density around transit centers. The plan also defines minimum density per acre. The City’s Zero Dollar Rate program to waive fees for development of affordable housing is a step in the right direction, however it focuses on removing fees on an existing process that impacts projects in time, which equates to dollars.
The real change will come if the city can revise or eliminate the discretionary review process and use a more ministerial approach for affordable housing projects. Discretionary reviews are notoriously arduous and expensive, and often used by opponents to gum up the works and drag the project through a long review process. With no guarantee of success in discretionary review, developers have backed away from housing developments rather than rolling the dice.
San Diego has been proactive in removing constraints on developers to help them squeeze more out of affordable housing developments. In addition to removing discretionary reviews, San Diego Mayor Todd Gloria recently issued an executive order requiring all city departments to review affordable housing projects within 30 days, which should provide a big boost to the timeline for development.
Rather than battling state laws, San Diego has embraced California’s regulations, making the path more predictable for developers. The city not only adopted California’s transit-oriented development (TOD) approach, it doubled the state-mandated distance of ½ mile from a transit hub to make more projects eligible.
There are many state programs capable of chipping away at the daunting costs of affordable housing. New revisions to the Surplus Lands Act provide clarity and flexibility to public agencies and private developers wanting to develop housing on public land. The newly revised Bonus Density Act allows developers to exceed density requirements and reduce parking on many affordable housing projects. And thanks to SB4, the YIGBY (Yes in God’s Back Yard) bill, churches can develop housing regardless of zoning restrictions.
Any real impact on the costs of affordable housing needs to come from embracing existing state regulatory reform and adapting the city’s rules to go beyond it. If Sacramento’s mayoral candidates truly want to tackle the affordable housing crisis, it’s time to move beyond soundbites and usher in a new era of streamlined, efficient development practices.
Julian Watt is the studio director of LPA Design Studios in Sacramento, an integrated design firm focused on sustainability.
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