Affordable Housing

An excellent article about it—in Sacramento—this month from Inside Publications.

An excerpt.

A discussion of what the city should do to increase the availability of affordable housing all too often turns into an argument between builders and low-income housing advocates. It’s the kind of discussion that opens up a gulf of ideologies and yields little common ground. But there is common ground on one point: The city’s existing low-income housing policies are, by any measure, failing.

Look to North Natomas. It is one of several designated “growth areas” where the city requires builders to set aside 15 percent of all new houses and apartments for low-income residents under the city’s inclusionary housing ordinance (also known as the mixed-income housing ordinance). The ordinance’s goals were idealistic: 15 percent of all new houses and 15 percent of all new apartments in North Natomas would be built for the subsidized poor who would live happily side by side with their unsubsidized neighbors, who would pay the full market rate for their houses and apartments.

The reality turned out to be dramatically different. It turns out that it’s exceedingly difficult to make subsidized low-income single-family homes work in the real world. It’s hard for such folks to get financing, even at subsidized home prices. It’s very expensive for builders who must incur the same cost to build a subsidized house as one they sell at market prices. Once a subsidized home is bought by an eligible buyer, it turns out they can’t sell it in the future for a profit: They have to turn any profit over to the government and the home must be sold to another qualifying low-income buyer. Such a limitation on resale lasts for 45 or 50 years. How would you like to buy a home, take on all the risks of a mortgage, but never be able to benefit from the appreciation of your property?

So North Natomas builders of large subdivisions, being rational actors, decide to meet their 15 percent low-income housing mandates by building less expensive low-income units in apartment houses with 200 units or more, where 80 percent to 100 percent of the residents would end up being low-income tenants—exactly the sort of environment that created no end of social pathologies in large-scale public-housing projects in cities built throughout the country over the past 60-plus years. Most of these big, federally financed, high-density monstrosities are long gone and now only a memory attesting to the wholesale failure of federal housing policy in the mid-20th century. (Anyone remember Cabrini-Green?) Stunningly, Sacramento Housing and Redevelopment Agency aided and abetted these concentrated poverty traps by offering up generous redevelopment subsidies to make it easier for the big apartment projects in North Natomas to pencil out for builders.

So the city’s inclusionary housing ordinance has, in practice, led to precisely the sort of housing that everyone acknowledges is a major mistake. The de facto projects in North Natomas are nowhere close to regular transit, job centers, school transportation or other public services.  North Natomas residents living nearby are plenty fed up with the social costs associated with the projects and made the city council aware of their angst at its Sept. 3 hearing on the housing element of its general plan.

Their North Natomas council representative, Angelique Ashby, has long been a vocal critique of the current policy and a major advocate for changing it. Ashby brings a unique perspective to the issue: She lived in low-income housing as a single mom at one point in her life. She has a passion for fixing the problem for the sake of those in need, as well as for her very peeved North Natomas constituents.

About David H Lukenbill

I am a native of Sacramento, as are my wife and daughter. I am a consultant to nonprofit organizations, and have a Bachelor of Science degree in Organizational Behavior and a Master of Public Administration degree, both from the University of San Francisco. We live along the American River with two cats and all the wild critters we can feed. I am the founding president of the American River Parkway Preservation Society and currently serve as the CFO and Senior Policy Director. I also volunteer as the President of The Lampstand Foundation, a nonprofit organization I founded in 2003.
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