Save and spend: Sacramento mayor wants to bolster city’s depleted fund for affordable housing

Nearly $13 million surplus available as officials consider response to increasing rents

City leaders last week previewed early measures intended to brace against Sacramento’s skyrocketing rent.

One step was revealed before the city’s Budget and Audit Committee meeting on January 24, when Budget Manager Dawn Holm announced $12.8 million in surplus revenue the city can use for one-time spending. The extra cash came primarily from every department except police operating at or under budget during fiscal year 2015-16.

Mayor Darrell Steinberg told council members that a significant allotment should be deployed to address the city’s affordable housing crisis.

A recent study suggested Sacramento County needs more than 59,000 affordable rentals to accommodate current low-income residents, while other data suggests that, in 2015, the city experienced the second-worst year-to-year rent increases in the nation. As a possible avenue for relief, Steinberg pointed to the city’s Affordable Housing Trust Fund, which has failed to substantially grow since city leaders relaxed affordable housing requirements on local developers in 2014.

“We’ve got either 1.2 million or 1.3 million in our Affordable Housing Trust Fund, which is not enough,” the mayor acknowledged. “We have to invest—one time at least—several million dollars into the city’s housing initiatives.”

The trust fund assists low-income developments that are built with federal or state grants, as well as provides match dollars for projects spearheaded by Habitat for Humanity of Greater Sacramento.

Councilwoman Angelique Ashby agreed with Steinberg’s objective, but stressed that the council should find the most flexible way to get cash directly into housing, which may or may not be through the trust fund.

The same day as the budget meeting, council members on the Law and Legislation Committee started the process of changing city codes for secondary housing units—better known as “granny flats”—to align with new California regulations aimed at getting a lot more of the small, modestly priced rentals on the market.

Gov. Jerry Brown signed the granny flats bill into law in September. It was all that survived of a three-pronged plan to spur housing construction at the state level. A Brown-led initiative to fast-track developments through the environmental review process was killed, as was a bond measure to make building low-income units more lucrative. Granny flats represented the only idea to emerge from the political smoke unscathed.

Granny flats are self-contained, fully operating apartments that exist as built-on additions to homes or detached cottages on a homeowner’s property.

The move to bring city code into compliance with the granny flats law means, generally, that detached living units can be 200 square feet bigger than before and attached units can be 20 percent larger.

Prior to the law’s passage, all granny flats built in the city outside of Midtown required their own parking spaces. That rule will now be waved in cases where a detached flat is located in a historic district, or within a half-mile from public transit, or within a block of a Zipcar, i.e., a fixed-spot electric rental car.

Attached units will no longer require an extra parking space.

While the committee noticed potential challenges with the code adjustment, particularly a requirement for granny flats to have individual addresses without half-numbers, Councilman Steve Hansen emphasized that City Hall needs to move quickly and seize any options for increasing affordable housing opportunities, even on a small scale.

“I think that this is the council’s attempt to manage affordability and create supply,” Hansen said. “By reducing these barriers, the city not only reduces the regulatory path, but hopefully helps bring down the inflation in housing.”