Developer pushes for elimination of affordable housing requirements
A prominent East Bay developer is targeting a slew of affordable-housing requirements, saying that the decline in home values has made them irrelevant.
The requirements were put into place when real estate prices were rising rapidly, and generally follow a pattern.
Cities and counties require developers to sell a certain number of units in projects they build at prices that low- and moderate-income buyers can afford.
If the buyers sell the home, the price they can charge is limited to the rise in the Consumer Price Index to keep the unit affordable.
Alternatively, developers can pay a fee that can be used to build affordable housing elsewhere.
Now that homes in some areas of the East Bay are within reach of moderate-income buyers, the need for the set-asides has passed, said Sal Evola, senior vice president of Concord-based Discovery Builders, part of the Seeno family of homebuilders.
Evola is also mayor of Pittsburg. He generally recuses himself from development issues that come before the City Council.
“Why would you buy a home with a restriction, when you could buy a foreclosure with no cap at the same price?” Evola asked. “When it comes to developer fees, the affordable-housing (buyout) is the first thing that could be reduced.”
Contra Costa County seemed to agree in December when it eliminated the fees for developers to buy out of providing housing for moderate-income buyers in unincorporated areas. The county also lowered the fees by two-thirds to buy out of the requirement for low-income buyers.
Beginning in 2006, developers who built condominiums had to sell 12 percent of their units at prices affordable to buyers with moderate incomes and 3 percent to those with low incomes, or pay the fees.
“We still have an affordability gap for low-income residents, but we’ve determined that those with moderate incomes no longer need a subsidy,” said Catherine Kutsuris, the county’s director of conservation and development.
No cities have followed the county’s lead in reducing the fees, Evola said.
A leader of a prominent environmental group objected to rolling back the so-called inclusionary ordinances, arguing that it is a mistake to stop collecting the fees based on temporary market conditions.
“It’s really disappointing and shortsighted,” said Jeremy Madsen, executive director of the Greenbelt Alliance in San Francisco. “A myriad families with low incomes are going to need housing in the future.”
In Contra Costa County, Brentwood, Concord, Danville, Hercules, Pittsburg, Pleasant Hill, Richmond and Walnut Creek have inclusionary housing ordinances, according to a California Association for Rural Housing database.
Alameda, Albany, Berkeley, Dublin, Emeryville, Fremont, Hayward, Livermore, Newark, Pleasanton, San Leandro and Union City have ordinances in Alameda County.
Low income for a family of four in Contra Costa and Alameda counties is $66,250 and below annually, and moderate income is no more than $107,150, according to state Housing and Community Development Department figures.