Catholic Community of Pleasanton

Social Justice Newsletter

     CCC Letter to Workshop May 1 2013

 

Citizens for a Caring Community

P.O. Box 178, Pleasanton CA 94566

                                                                                                                                                                
 

April 29, 2013

Mayor Jerry Thorne and Pleasanton City Councilmembers     
Chairman John Casey and Pleasanton Housing Commissioners
RE: May 1 Workshop on Affordable Housing Policy and Pleasanton's IZO
 


Dear Mayor Thorne, City Councilmembers, and Housing Commissioners,

    Thank you for holding this workshop on Pleasanton's affordable housing policies. Citizens for a Caring Community (CCC) truly appreciates your attention to this issue, as well as the interest of property owners, their development partners, and the many residents who defined these issues through participation in creating the Hacienda TOD guidelines, Housing Element Update, and the East Pleasanton Specific Plan.

    We especially appreciate that staff has included an option from CCC for your evaluation. A one page outline (Option 4 in the staff report) is attached to this letter in order to simplify your review.  The Palmer decision provided CCC with the opportunity to put our members' collective knowledge  to work, gained over years of working on affordable housing issues in Pleasanton and Alameda County. The result in Option 4 not only solves the "Palmer problem", but would also dramatically improve Pleasanton's  ability to pursue the goals, policies, and programs in our Housing Element.


Option 4 advantages over Options 1, 2, 3, and 5

  

1. Palmer would not apply to NP/HDR zoned sites. 


 Although sites would be designed as a whole, nonprofit developers would provide all units below 80%  AMI on a separate parcel. Rents or sale prices of market rate units would be unrestricted.

 

2. NP/HDR zoning would provide a minimum of 40% of rental units below 80% AMI, including below 50% AMI. 
 The current IZO requires only 15% at this level of affordability. Pleasanton's actual workforce housing need, as  reflected both by local business research and RHNA, has historically been 40% or higher. Option 4 is also  substantially more consistent with Pleasanton's Housing Element, which commits Pleasanton to the  goal of fulfilling RHNA by encouraging nonprofit development.

 

3. NP/HDR sites would serve the full range of Pleasanton's workforce households earning  below 80% AMI.
 Approximately 40% of Pleasanton's workforce earns below the Area Median Income. Yet, in complying with   the IZO's 15% requirement, for-profit apartment complexes rent only to households at the very top of each  income category, i.e. to  those earning 80% AMI, but not 70% AMI, or to 50% AMI, but not to 45% AMI. Thus,  the vast majority of Pleasanton's lower income workforce and their employers currently receive no housing  benefit from the IZO. In contrast, nonprofits rent to the entire range of workforce households earning below  80% AMI, and this provides a greater return to businesses paying the LIHF and their employees.

 

4. All Pleasanton's Moderate Income housing requirements would be filled on NP/HDR  sites. ALL housing built  at less  than 30 units/acre would  pay the LIHF.
 At least 40% of the units on sites zoned NP/HDR would be at the same or higher density than the nonprofit  housing. Because HCD automatically credits housing built at 30 units/acre as Moderate Income , lower density  residential developments would not need to provide any Moderate Income housing, and thus would pay the  the LIHF.

 

5. Tenants in market rate units will no longer pay higher rents to subsidize affordable units.
 The current IZO requires for-profit rental complexes to set rents high enough to support the rent restricted  affordable units. Universal compliance of for-profit developers  under the current IZO unfairly impacts the  moderate income workforce occupants of market rate units with higher rents throughout Pleasanton's market  rate apartment stock.

 

6. Less of an increase in the LIHF would be required with NP/HDR zoning than under Option 3.
 Under Option 4, the primary use of the LIHF would be to cover shortfalls in the nonprofit portions of the  development and perhaps program cost sharing with nonprofit managers.  The City would not need to use the  LIHF to purchase land, which is very expensive in places like Hacienda Business Park and other prime locations.   The amount of any fee increase would also be offset by  Option 4's requirement for all residential projects  without nonprofit partners to  pay the LIHF.

 

7. Only  nonprofits would be eligible to receive contributions from the Lower Income Housing Fund (LIHF).
 Nonprofit requirements for transparency and detail in financial reporting are similar to those of local  government. The City and the community can better track the use of these funds when granted to nonprofit  developers. Requiring for-profit developers to report costs and expenditures to the City renders their  proprietary financial information a matter of public record.

 

8. Nonprofit housing includes service amenities for families, seniors, and those with special needs such as day  care, after school programs, financial counseling, and health screenings. This helps keep cities' emergency  services and public safety costs low.
 Living without much discretionary income requires careful planning, especially in the Bay Area! Lower  income households benefit from nonprofit housing's service-rich environment, whether they are young and  new to the workforce, are facing a sudden loss of income, or just work in a field where the pay is low. Easy  access to service referrals and prevention programs can help families on tight budgets who might postpone  acting on an issue until it becomes an emergency room or public safety crisis.
   
9. Exempting for-profit builders developing on NP/HDR sites from both the LIHF and the need to provide  Low, and Very Low income units in perpetuity may make more money available for parks and schools

Under the current IZO, apartment complex developers who agree to comply with the 15% VLI and LI  requirements have difficulty finding financing for construction.  In this case, the City collects no fees. Even  projects such as California Center, with drastically reduced affordability, still find the cost of the inclusionary u nits prevents them from paying more than the minimum in school and park fees.
 
    As usual, the Council must set  clear expectations when zoning land for any use, whether to  accommodate affordable housing or commercial development. Both land uses are vital to Pleasanton's economy. To yield the intended  benefits, zoning requirements and entitlements should, to the maximum extent possible, address community needs while providing economic opportunity for the property owner.  It's a delicate balance, with the best solutions advancing everyone's goals.

    Even before the Palmer decision, the IZO did not, and could not, meet Pleasanton's Housing Element goals. Furthermore, the IZO's requirements proved problematic for site developers. NP/HDR zoning would both reduce for-profits' long term costs, and provide needed opportunities for nonprofit developers in Pleasanton, consistent with Council's  Resolution 10-390. The NP/HDR zoning  concept has received interest from housing advocates in other communities with newly zoned, large tracts of land such as Alameda, as well as nonprofit developers. General (though more limited) feedback from for-profit builders indicates that development under NP/HDR zoning  would be, at a minimum, more feasible than under the current IZO (ex: BRE and Windstar). While for-profits won't  give up land unless required by Council as a condition of the zoning, they judge the cost of land dedication as far less than imbedding 15% Low and Very Low Income units in market rate complexes in perpetuity. Under NP/HDR zoning, their projects, though smaller, would certainly be more profitable. And Pleasanton would actually realize a much higher percentage of affordable housing. Option 4 is a win-win.

Very sincerely,
Becky Dennis
Citizens for a Caring Community
ATTACHMENTS: 2

 

Attachment 1
 

Citizens for a Caring Community

P.O. Box 1781 , Pleasanton CA 94566


 

OPTION 4 Summary
  
Concept for providing affordable housing without implementing rent restrictions.
  • Modify the current IZO offsite development and land dedication alternatives to create mixed income neighborhoods rather than mixed income buildings.
  • Prohibit rent restricted units in market rate developments on property zoned 30 units+/acre.
  • On property zoned 30+units/acre, restrict contributions from the Lower Income Housing Fund (LIHF) to qualified nonprofit housing providers in order to assure efficient and transparent use of these limited funds.  

SUGGESTION FOR DISCUSSION:

 

Replace the IZO with a new zoning category:

 

Nonprofit/High Density Residential (NP/HDR)

 

All properties the City identifies as suitable for high density residential development (30+units/acre) in the Housing Element update process would receive NP/HDR zoning. In addition, other property owners not so identified could apply for this zoning on all or a portion of their property. This would be the only HDR zoning available in Pleasanton greater than 23 units/acre.

 
Requirements for developing with NP/HDR zoning would be:

 

-  A qualified nonprofit housing provider, hired by the property owner to create a plan for  the site.

-  The nonprofit would provide at least 40% of the site's residential units as affordable to  low, very low, and/or extremely low income households on land dedicated by the  property owner.

-  The non-profit lead would select a for-profit developer to build market rate units on the  site. At least 40% of the market rate units would be built at the same or greater density  than the nonprofit units.

- The market rate portion of the development will be exempt from paying the LIHF.

- Rents in the market rate portion of the development would have no restrictions.

- The LIHF would provide financial assistance to the nonprofit housing project lead as outlined in the current IZO, or additional assistance as recommended by the Housing Commission and approved by Council.

- The City would expect and facilitate the nonprofit and for-profit developer(s) to cooperate in the creation of an attractive, mixed income neighborhood including shared amenities for workforce families and singles consistent with the Housing Element Goals and Policies.


ATTACHMENT 2

 

Affordable housing: Silicon Valley region's planners need to provide more of it
By Michael Hirahara Special to the Mercury News San Jose Mercury News
Posted: 4-15-13 


The Bay Area needs more homes that connect easily to jobs and transportation, without compromising the open spaces and natural beauty that make this a great place to live.
 

The promise of a lifestyle that includes easy access to nature, local food and wine and abundant recreation opportunities helps local industries attract the best and the brightest. But the lack of affordable homes close to city centers, jobs and public transportation puts both employees and businesses at a disadvantage; even though our economy is gaining ground, we can't afford to lose good people due to the high cost of living.
 

Two influential regional planning agencies have introduced a new draft master plan for living in the Bay Area during the next 25 years, including recommendations on housing, jobs, transportation and the environment. Public hearings on Plan Bay Area are underway, and from a business perspective, the number one public policy concern is affordable homes for the employees we need to remain competitive.
 

This point was emphasized in the 2013 Silicon Valley Leadership Group CEO survey in which, once again, executives named high housing costs as the top challenge in attracting and retaining employees.
 

Businesses, regional agencies and communities need to work together to make sure that locally identified development opportunities move forward. "Priority Development Areas" are close to city centers and transportation and resolve the housing crunch, long commute times and traffic gridlock.
In addition, thoughtful planning for homes will support intelligent infrastructure development, such as roads and water lines; positioning the right amount of infrastructure in the right places will lower costs and increase utilization in the long-term.
 

San Jose has taken a leadership role in this realm. On the North First Street corridor near Brocade's headquarters, there are many apartments and condominiums available for our employees. Up to 30,000 more homes are planned for the corridor, with several developments under construction. These homes are all served by light rail transit and are less than a mile from open space and recreation including the Guadalupe River trail that connects North San Jose to the downtown core and beyond. This approach to affordable housing and planning is important as we strive to attract and retain premium talent.
 

There is a direct correlation between jobs, homes and economic growth. Proximity to jobs means less commuting, more personal time and a better quality of life. By accommodating the housing need, we can successfully attract employees, add jobs and grow our local economy. But none of this will happen if the cost of doing business isn't competitive with other areas, like Austin or Denver.
 

With political and local leadership on affordable homes, we can continue to enjoy the natural areas that are so vital to our lifestyle while helping the Bay Area business community attract and retain the work force it needs to thrive. I urge planners and communities throughout the Bay Area to support and invest in developing more homes near city centers. In doing so, we will not only protect our natural assets, we can secure the Bay Area's economic future.
 

Michael Hirahara is vice president of Global Real Estate, Facilities and Services at Brocade and a member of the Silicon Valley Leadership Group's Housing and Land Use Committee. He wrote this for this newspaper.