Revised Affordable Housing Requirements for Builders Hopes to Springboard New Home Construction

To take advantage of the recessionary lull, supervisors in Sacramento County recently voted to reduce affordable housing requirements for builders. Under previous requirements, builders had to donate almost the equivalent of 15 percent of new projects toward affordable housing. Developers for years have fought to reduce the required amount and after a 3-2 vote by supervisors, builders now have an option to pay a fee rather than set aside land in new developments for low-income units.

New Home Construction
Representatives of the North State Building Industry Alliance and other development groups told supervisors Tuesday that the recession has hurt the industry, and the old affordable housing ordinance will further damage middle-class home buyers and construction workers. But advocates for low-income residents say builders have used the housing ordinance as a scapegoat and that the county should give its 15 percent requirement a chance to succeed as the housing market gains strength.

Supervisors on Tuesday approved a new ordinance that is expected to produce 10 percent of affordable housing on new construction, according to projections from staff. That is more than the 8 percent originally proposed by staff. Fee proceeds will go toward a county fund dedicated for affordable housing programs.

County staff said the change was needed because other local governments in the region have relaxed their affordable housing requirements or are considering such changes. They also agreed that developers need help in light of recent economic difficulties. Because of variables in housing types and the real estate market, it is hard to predict whether the fee will generate as much as projected. County officials debated Tuesday where to project certain factors such as average home size and how large a subsidy is necessary to build affordable housing.

County officials acknowledged Tuesday they don’t know if the new law will work as planned. They said they will report to supervisors three times a year to explain how the fee is working.

To read the full story click here: