Developers put Sacramento's progressive affordable-housing laws in checkmate

Building industry successfully guts Sacramento County's inclusionary-housing ordinance

Developer interests have outmaneuvered affordable-housing advocates by playing one jurisdiction’s economic fears against the other’s.

Developer interests have outmaneuvered affordable-housing advocates by playing one jurisdiction’s economic fears against the other’s.

illustration by SN&R staff

A longer version of this story can be read online at

A decade-long campaign to undo Sacramento County’s landmark affordable-housing policy culminated last week in a big win for developers. Now, local advocates for the poor are scrambling to defend one of their last outposts for fair housing: the city of Sacramento.

A January 28 vote by the county board of supervisors represented the biggest blow yet to those who view integrated housing as a panacea to an array of social ills—from the high rate of deaths among Sacramento’s black children and homeless residents, to the segregation of low-income and minority families.

The county’s low-income-housing rules required developers to set aside 15 percent of project land for poorer residents. But shortly after the heralded policy was adopted in 2008, the development industry gummed up its implementation with lawsuits. Then, the housing bubble burst, and new construction halted.

Now, the policy has been dismantled altogether.

“The current affordable-housing ordinance really hasn’t had its day in the sun,” argued Christian Jensen, an organizer at Resources for Independent Living, which represents disabled people in Sacramento and Yolo counties.

Nor will it.

Supervisors’ contentious 3-2 vote replaces a 15 percent requirement with a $2.50-per-square-foot fee for new development, which will be banked in an affordable-housing trust fund. (A slam-dunk procedural vote is scheduled for February 11.)

The idea is that new, affordable units will be built when enough money accumulates in the till. But county planners acknowledged their projections were little more than artful guesses.

“There’s lots of ways of slicing this,” said planning director Leighann Moffitt.

Staff anticipates building a hundred new affordable units per year with the money, but that depends on a number of unproven assumptions. The county would need to both double current residential construction rates and also spend all fees on building new units. The latter is unlikely, as the county can spend up to 50 percent of collected fees on refurbishing existing structures.

All of which could put the number of new affordable units closer to 25 a year, if not lower.

According to growth projections, more than 5,500 low-income units are needed over the next seven years.

“The fee-only [option] is the worst possible outcome,” Sacramento Housing Alliance advocacy director Tamie A. Dramer told SN&R a day after the vote.

Jensen and Dramer called it a “race to the bottom.”

Developers’ ripple effect

But it won’t likely be the last hit for affordable-housing advocates and the people they represent.

Last week’s vote continues an effective strategy by the building industry of gutting affordable-housing standards. It’s like a chess game: Developers went after low-income-housing laws in the suburbs to put pressure on the city and county of Sacramento.

“It absolutely has a ripple effect. It’s like a traveling road show,” chuckled Ken Cross, CEO of Sacramento Habitat for Humanity.

In Placer County, builders can either carve out 10 percent of new residential projects aside for affordable units, or else pay a fee they independently negotiate with the planning director. El Dorado County has no affordable-housing requirements, just “incentives.”

The city of Rancho Cordova negotiates requirements on a project-by-project basis, while the cities of Citrus Heights and Galt have no affordable-housing programs whatsoever.

The cities of Sacramento and West Sacramento are both considering easing their respective inclusionary-housing standards, while the cities of Elk Grove and Folsom tweaked their fee-heavy programs in March 2013.

“Generally speaking, a lot of the cities have pulled back on the way they were doing affordable housing,” reflected Joshua Wood, executive director of Region Builders, a lobbying organization for commercial builders.

That message was hammered home in a January 10 letter from North State Building Industry Association, a big donor to local political campaigns.

“Most communities within our region have converted to having a fee-only option, or in fact have no affordable housing requirement at all, which puts prospective investment in Sacramento County at a severe disadvantage,” North State BIA government and affairs director John Costa wrote.

The scare tactic wormed its way into county policy.

Housing advocates appealed for more time to discuss options and reach out to stakeholders in the county. Their request came at a cost.

“They punished us for that. That’s what I felt like, anyway,” Dramer said. “[County executive] Brad [Hudson] told them to take the inclusionary-housing option off the table.”

Which is what the county did, to Supervisor Don Nottoli’s chagrin. One of the ordinance’s original architects, he and housing advocates could read the writing on the wall last week.

Expressing fatigue with the debate, board Chairman Jimmie Yee enacted a 30-minute public comment limit for each side at the January 28 meeting. Counting up the speaker cards, he gave two minutes apiece to builders and developers, but only a minute-and-a-half to advocates, since there were more of them.

“Honestly, I’ve never felt so disrespected coming into these chambers until today,” one speaker told Yee.

The fee ultimately was set at $2.50 per square foot with no cap, based on the disputed assumption that the average home in the unincorporated county is 2,250 square feet.

Nottoli voted against the rate, because he thought it was too weak-tea, and Supervisor Susan Peters opposed it, because she thought it was too hard on developers.

Excepting Nottoli, Russell Rawlings, a low-income housing resident and disability-rights activist, said the board was “on the sideline of declaring war on half the citizens of Sacramento County,” the figure whose median income rates them at low-income levels.

Statewide trend

A similar claim is wending its way around the state.

“As a general proposition, it does seem to be a trend” toward watering down affordable-housing standards around California, said Rob Wiener, executive director of the California Coalition for Rural Housing, which tracks some 145-odd inclusionary housing policies in the state.

It’s a trend that Wiener believes will produce fewer affordable units in less-desirable communities. This has a “lot to do with weakening the policies than making them work better,” he added.

Habitat’s Cross recently premiered what’s likely to be one of his organization’s last big housing projects in Sacramento.

Habitat recently finished erecting its 100th residence, part of a 14-home project on Florin Road that was the group’s largest. The homes are energy efficient, near light rail and designated for the area’s working class.

Habitat is now readying 13 subdivided units near Power Inn Road and Elder Creek. The amount of money required to subdivide a lot and put in the infrastructure—streets, lights and gutters—before a home can be built is enormous. Unless there’s a state-funding stream or redevelopment agency providing that money, or a developer required to set aside finished lots, affordable builders like Habitat can’t do it on their own. “After that project, I don’t know that I can do any more of these large projects,” Cross said.

“What they’re talking about really is it’s just expensive to develop, right?” Wood replied. “It’s a hard industry to get into if you don’t have deep pockets.”

Add in the sharply felt loss of redevelopment monies, the evaporation of Proposition 1C housing bonds and the spotty prospects for Senate Bill 391—which would create a permanent funding stream to help offset the loss of the previous two—and advocates say the future could be bleak for working-class heroes.

“The resources are drying up,” Cross said.

Wood’s not sure it matters. The commercial-development lobbyist believes that lifting people out of poverty has less to do with affordable housing than creating jobs, a big slogan in his work with The4000, a politically connected coalition behind a publicly subsidized Sacramento Kings arena. Wood said a new arena and big-box stores in Sacramento would provide such jobs.

Asked whether arena and Wal-Mart employees can really earn livable wages, Wood clarified that those jobs are stepping stones. “But you can work your way up to a high-paying job at a big-box store,” he added.

City in the crosshairs

Meanwhile, housing advocates are turning their attention to the city of Sacramento, which is in the process of altering its own affordable-housing rules.

The city is considering replacing its 15-percent threshold with a fee-only option that charges $3 per square foot of new construction. But now that the county underpriced them by 50 cents, that figure may not stay.

Sacramento City Councilwoman Angelique Ashby, whose district encompasses most of the city’s new affordable housing, thinks it would be a mistake to ignore what other communities are doing.

“We’ve been victims of that in the past,” she said, referring to the city’s recently repealed big-box ordinance. “You don’t have to mirror what the other cities do, but you better take it into consideration.”

For Ashby, this wonky policy debate hits close to home.

A single mother at age 20, she lived in low-income housing and utilized both food stamps and subsidized child care while attending law school. “So I have some history with low-income housing,” she related. “Right now, the ordinance that we have in place, in my opinion, falls short of helping the people it’s supposed to help.”

North Natomas, part of Ashby’s district, has 11 apartment complexes with a low-income component, but few of the supports for the working class. There’s no light rail and only one bus line. There are parks, but no public pool or community center.

“That’s just like the projects of the ’60s and ’70s that we tried to get away from,” she told SN&R. “We have to do better than this.”

Housing advocates worry that tinkering with the ordinance will mean a reduction in affordable units. Ashby says it probably will.

“I’m sure we’ll go down in quantity, and I’m sure the development community will have to pay more than they want,” she said. “It’s our job as the city to find that median point.

“It’s not going to be controversy-free because it involves money and human life.”