From the 12/15/08 Progress Report ( http://pr.thinkprogress.org/ )
In his weekly address on Saturday, President-elect Obama named New York City housing commissioner Shaun Donovan as his pick to run the Department of Housing and Urban Development (HUD), saying that few departments would be "more essential" in his effort "to stem the rising tide of foreclosures and strengthen our economy." "With experience that stretches from the public sector to the private sector to academia, Shaun will bring to this important post fresh thinking, unencumbered by old ideology and outdated ideas," said Obama. Before New York City Mayor Michael Bloomberg tapped him to run "what has been called the nation's largest affordable-housing plan," Donovan served at HUD in the Clinton administration, as both acting federal housing commissioner and deputy assistant secretary for multifamily housing. Politicians and housing advocates widely hailed Donovan's nomination. "Shaun Donovan is a brilliant choice for HUD. He is an expert on the full range of housing issues and has a proven track record of getting things done," said Sheila Crowley, president of the National Low Income Housing Coalition. "Thankfully, President-elect Obama has chosen a HUD secretary that is uniquely qualified to take on this task," said Sen. Patty Murray (D-WA), who chairs the subcommittee that controls HUD appropriations. If he is confirmed, Donovan will be a lead player in addressing "the worst economic climate in decades" as "American homeowners are reeling from plummeting home values and rising unemployment."
Full Article: http://docs.google.com/Doc?id=df7q7cfm_91hhm2bqvk
Monday, December 15, 2008
Sunday, December 14, 2008
Obama: HUD Pick Central Part of Economic Blueprint
by: Philip Elliott and Jim Kuhnhenn, The Associated Press Saturday 13 December 2008
President-elect Barack Obama selects New York City Housing Commissioner, Shaun Donovan, to lead the Department of Housing and Urban Development. (Photo: James Hamilton / The New York Observer)
In naming his choice for housing secretary, President-elect Barack Obama on Saturday rounded out his economic team and gave new prominence to the mortgage crisis that has dragged the country into a recession.
The selection of Shaun Donovan as secretary of Housing and Urban Development puts the current New York City housing commissioner at the forefront of one of the more nettlesome economic challenges confronting the new administration - the soaring foreclosures that are threatening homeownership nationwide.
The Federal Reserve estimates that lenders are on track to initiate 2.25 million foreclosures this year, more than doubling the annual pace before the crisis set in. What's more, falling housing values and a plunging stock market have contributed to $2.8 trillion in lost household wealth in the third quarter.
Donovan joins a team led by Tim Geithner, Obama's nominee for Treasury secretary, and Larry Summers, who will chair Obama's National Economic Council. Obama has his team working on an ambitious economic recovery plan that includes saving or creating 2.5 million jobs over the next two years.
Stemming foreclosures and stabilizing the battered housing market will be daunting tasks that have already bedeviled Congress and the Bush administration.
"We need to approach the old challenge of affordable housing with new energy, new ideas, and a new, efficient style of leadership," Obama said upon naming Donovan during his Saturday radio address. "We need to understand that the old ways of looking at our cities just won't do."
Donovan will inherit various tools to confront the problem. Obama wants to use the second half of a $700 billion financial industry rescue plan to help stem foreclosures. Congress this year also put in place a $300 billion program designed to let troubled homeowners swap risky loans for more affordable ones, though few have applied. Moreover, homeowners have continued to default on mortgages despite government efforts to lower interest rates and modify repayment terms.
With one in 10 U.S. homeowners delinquent on mortgage payments or in foreclosure, Obama said Donovan will bring "fresh thinking, unencumbered by old ideology and outdated ideas" at the Housing and Urban Development Department to help resolve the housing and economic crisis.
Donovan, head of New York's Housing Preservation and Development Department, is a former Clinton administration HUD official with a national reputation for curtailing low-income foreclosures, developing affordable housing and managing the nation's largest housing plan.
"Mr. Donovan's background prepares him to address the extremely difficult challenges our country faces in helping Americans find affordable housing," said Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking, Housing and Urban Affairs Committee.
If confirmed by the Senate, Donovan would become the nation's top housing official in the midst of the worst recession in decades. Falling home values and stricter lending standards have ensnared millions of U.S. households. More than 259,000 homes received a foreclosure-related notice in November, up 28 percent from a year earlier.
Conrad Egan, president of the nonpartisan National Housing Conference, said Obama's selection of Donovan signals that he recognizes HUD can play a big role in the economic recovery.
"It really needs to be a seat at the Cabinet table that is the principal point where housing and community development issues are brought together and resolved successfully," Egan said. "HUD has been perceived as a second-tier participant in meeting that challenge."
Obama's housing plans, as spelled out during his campaign and the current transition, include:
_Enacting a 90-day foreclosure moratorium for homeowners "who are acting in good faith."
_Getting Treasury and HUD to coordinate with state housing agencies to restructure mortgages.
_Reforming the bankruptcy code to help homeowners.
_Enacting a 10 percent refundable tax credit on mortgage interest.
"This plan will only work with a comprehensive, coordinated federal effort to make it a reality," Obama said. "We need every part of our government working together from the Treasury Department to the Federal Deposit Insurance Corporation, the agency that protects the money you've put in the bank."
Right now, the Bush administration's Treasury Department is resisting an effort by FDIC chairwoman Sheila Bair to use $24 billion in financial bailout funds to help 1.5 million borrowers avoid foreclosure by guaranteeing modified mortgages.
Donovan, a 42-year-old New York native, told the Senate Banking, Housing and Urban Affairs Committee in May that HUD's programs have led to "a feast-famine cycle, in which our program grows to the allowed size and then contracts so we don't go above our authorized level."
As New York Mayor Michael Bloomberg's top aide for housing, Donovan kept foreclosures to a minimum in the city's low- and moderate-income homeownership plan, with just five of 17,000 participating homes falling. He oversaw the creation of the $200 million New York Acquisition Fund, a collaboration involving the city, foundations and financial institutions. It is intended to help small developers and nonprofit groups compete for land in the private market.
"He has moved our focus beyond the old public sector driven solutions by giving the starring role to the private and nonprofit sectors," Bloomberg said Saturday. He said Donovan "has shown that we can do more with less - especially in these difficult times."
Sheila Crowley, president of the National Low Income Housing Coalition, said Donovan "enjoys high regard across the spectrum of housing interests, from low income housing and homeless advocates, public officials, developers, and financiers alike
Saturday, November 29, 2008
Housing Is Bad Enough, but Wait - It'll Get Worse
by: Kevin G. Hall, McClatchy Newspapers
Washington - If you think the housing slump can't get much worse, Martin Feldstein thinks that both home prices and the broader economy can - and very likely will - get a whole le lot worse.
The Harvard University professor and former chief economic adviser to Ronald Reagan isn't part of the crowd that continually forecasts doom. For two decades, he's headed the National Bureau of Economic Research, which officially determines when U.S. recessions begin and end.
So when he spoke on Monday night at the annual dinner of the National Economists Club, a gathering of like-minded wonks, Feldstein's grim calculations were noteworthy.
"There are now 12 million homes in the United States with a loan-to-value ratio greater than 100 percent. That's one mortgage in four. The aggregate amount of that is some $2 trillion," said Feldstein. "If you look at the median (midpoint) loan-to-value ratio in that 12 million group of underwater mortgages - mortgages with negative equity รข€€" the median loan-to-value ratio is 120 percent."
That means about 25 percent of all U.S. mortgages are exceed the value of the homes the mortgages are financing. In the case of half the homes that are underwater, homeowners are paying a mortgage that's now 20 percent higher than the value of the home.
That's bad - but it's likely to get worse.
A recent rreport by First American Core Logic, a real-estate data firm in Santa Ana, Calif., estimated that as of Sept. 30, 7.5 million mortgages, or 18 percent of all properties with a mortgage, had negative equity. The group thinks there are another 2.1 million mortgages that are within 5 percent of going underwater.
Together, these two categories account for 23 percent of all properties with a mortgage. Nevada led all states with 48 percent of homes with negative equity. Florida and Arizona each had 29 percent of homes with underwater mortgages, while 27 percent of mortgages in California were upside-down, the group said.
If home prices fall another 10 to 15 percent, as measured by the Case/Shiller Home Price Index, then four out of every 10 mortgages in the U.S. could be underwater, Feldstein said.
"At those levels, it's hard to see how many people are going to be willing to keep up with their mortgages," Feldstein said.
The implications for many homeowners are staggering. Before the recent housing boom of 2000 to 2006, homes increased in value at a historical annual rate of about 2.3 percent when adjusted for inflation.
That means that for homeowners who owe 35 percent more than their homes' value, it would take, at historical averages, about 15 years just to break even on their home investment. They won't build equity. It would be a huge incentive for millions to hand the keys back to the lender and seek cheaper housing.
Not all real estate experts buy Feldstein's stark numbers.
"That's the highest percentage I've heard from anybody, by quite a bit," said Rick Sharga, senior vice president for Realtytrac, an Irvine, Calif., company that publishes foreclosure data.
More conservative forecasts, though still dismal, point to a smaller drop in home prices of 5 percent to 7 percent, he said.
Added Jay Brinkmann, chief economist for the Mortgage Bankers Association in the nation's capital, "If you generalize the numbers too far, I think it leads to some incorrect conclusions."
The Case/Shiller Index is driven by home sales that have taken place. It doesn't reflect the stability in older, established neighborhoods, Brinkmann said. The vacant and for-sale rates nationwide for homes built before 2000 - that is, pre-boom - is js just 2 percent. The delinquency and foreclosure problems are concentrated mostly in a handful of states, such as California, Florida, Arizona and Nevada, which had overbuilding and weak lending standards.
"Those states have about 25 percent of the mortgages and 50 percent of the foreclosure starts" in the latest association survey, Brinkmann said. Nationwide, 6.4 percent of all mortgages were delinquent through June, but the number of delinquencies and foreclosure starts are breaking records every quarter, the most recent MBA survey said.
Brinkmann's own rough guess is that somewhere between 6 million and 8 million mortgages are underwater, still a very high number. He doesn't see the national outlook getting better any time soon, framing his estimate of when that happens in the form of a question: "When does the influence of these massive declines in California and Florida go away?"
Realtytrac's forecast isn't any brighter.
"The best-case scenario in terms of the real estate market is we probably bottom out between mid-year and the end of 2009. And that's the best case from where we're sitting," Sharga said. "The only reason it could happen that soon is because of how rapidly and how severe the downturn has been in the housing market."
A lot would have to go right to reach that best-case scenario. Government and industry efforts would have to step up efforts to forgive or make up the difference between the value of the mortgage and the value of the home.
The final batch of subprime mortgages scheduled to reset to a higher interest rate will have done so by the end of the first quarter of 2009.
In a rare bit of relief for one segment of the housing market, the interest rates that determine the monthly payments for some adjustable-rate mortgages are falling.
Sharga said, however, that the next problem is the $60 billion of adjustable-rate Alt-A mortgages, which fall between subprime and prime loans. Millions of these loans are scheduled to reset next year to higher interest rates. That could bring monthly mortgage payment increases of $1,000 or more if the loans aren't modified or refinanced.
All this is happening amid what now clearly is a deepening recession, with the highest job losses and deepest drops in consumer spending in decades. The Labor Department reported on Thursday that weekly jobless claims jumped to 542,000, a 16-year high, last week. That suggests a fast-deepening recession.
The White House Thursday acknowledged for the first time that it now supports efforts in Congress to extend unemployment benefits for longer periods to the millions of Americans who can't find work in the downturn.
Consumer spending drives about two-thirds of U.S. economic activity, and as unemployment mounts and consumers retrench, that leads to even more unemployment, mortgage delinquencies and foreclosures.
"The problem now is what will be happening with jobs," Brinkmann said.
Washington - If you think the housing slump can't get much worse, Martin Feldstein thinks that both home prices and the broader economy can - and very likely will - get a whole le lot worse.
The Harvard University professor and former chief economic adviser to Ronald Reagan isn't part of the crowd that continually forecasts doom. For two decades, he's headed the National Bureau of Economic Research, which officially determines when U.S. recessions begin and end.
So when he spoke on Monday night at the annual dinner of the National Economists Club, a gathering of like-minded wonks, Feldstein's grim calculations were noteworthy.
"There are now 12 million homes in the United States with a loan-to-value ratio greater than 100 percent. That's one mortgage in four. The aggregate amount of that is some $2 trillion," said Feldstein. "If you look at the median (midpoint) loan-to-value ratio in that 12 million group of underwater mortgages - mortgages with negative equity รข€€" the median loan-to-value ratio is 120 percent."
That means about 25 percent of all U.S. mortgages are exceed the value of the homes the mortgages are financing. In the case of half the homes that are underwater, homeowners are paying a mortgage that's now 20 percent higher than the value of the home.
That's bad - but it's likely to get worse.
A recent rreport by First American Core Logic, a real-estate data firm in Santa Ana, Calif., estimated that as of Sept. 30, 7.5 million mortgages, or 18 percent of all properties with a mortgage, had negative equity. The group thinks there are another 2.1 million mortgages that are within 5 percent of going underwater.
Together, these two categories account for 23 percent of all properties with a mortgage. Nevada led all states with 48 percent of homes with negative equity. Florida and Arizona each had 29 percent of homes with underwater mortgages, while 27 percent of mortgages in California were upside-down, the group said.
If home prices fall another 10 to 15 percent, as measured by the Case/Shiller Home Price Index, then four out of every 10 mortgages in the U.S. could be underwater, Feldstein said.
"At those levels, it's hard to see how many people are going to be willing to keep up with their mortgages," Feldstein said.
The implications for many homeowners are staggering. Before the recent housing boom of 2000 to 2006, homes increased in value at a historical annual rate of about 2.3 percent when adjusted for inflation.
That means that for homeowners who owe 35 percent more than their homes' value, it would take, at historical averages, about 15 years just to break even on their home investment. They won't build equity. It would be a huge incentive for millions to hand the keys back to the lender and seek cheaper housing.
Not all real estate experts buy Feldstein's stark numbers.
"That's the highest percentage I've heard from anybody, by quite a bit," said Rick Sharga, senior vice president for Realtytrac, an Irvine, Calif., company that publishes foreclosure data.
More conservative forecasts, though still dismal, point to a smaller drop in home prices of 5 percent to 7 percent, he said.
Added Jay Brinkmann, chief economist for the Mortgage Bankers Association in the nation's capital, "If you generalize the numbers too far, I think it leads to some incorrect conclusions."
The Case/Shiller Index is driven by home sales that have taken place. It doesn't reflect the stability in older, established neighborhoods, Brinkmann said. The vacant and for-sale rates nationwide for homes built before 2000 - that is, pre-boom - is js just 2 percent. The delinquency and foreclosure problems are concentrated mostly in a handful of states, such as California, Florida, Arizona and Nevada, which had overbuilding and weak lending standards.
"Those states have about 25 percent of the mortgages and 50 percent of the foreclosure starts" in the latest association survey, Brinkmann said. Nationwide, 6.4 percent of all mortgages were delinquent through June, but the number of delinquencies and foreclosure starts are breaking records every quarter, the most recent MBA survey said.
Brinkmann's own rough guess is that somewhere between 6 million and 8 million mortgages are underwater, still a very high number. He doesn't see the national outlook getting better any time soon, framing his estimate of when that happens in the form of a question: "When does the influence of these massive declines in California and Florida go away?"
Realtytrac's forecast isn't any brighter.
"The best-case scenario in terms of the real estate market is we probably bottom out between mid-year and the end of 2009. And that's the best case from where we're sitting," Sharga said. "The only reason it could happen that soon is because of how rapidly and how severe the downturn has been in the housing market."
A lot would have to go right to reach that best-case scenario. Government and industry efforts would have to step up efforts to forgive or make up the difference between the value of the mortgage and the value of the home.
The final batch of subprime mortgages scheduled to reset to a higher interest rate will have done so by the end of the first quarter of 2009.
In a rare bit of relief for one segment of the housing market, the interest rates that determine the monthly payments for some adjustable-rate mortgages are falling.
Sharga said, however, that the next problem is the $60 billion of adjustable-rate Alt-A mortgages, which fall between subprime and prime loans. Millions of these loans are scheduled to reset next year to higher interest rates. That could bring monthly mortgage payment increases of $1,000 or more if the loans aren't modified or refinanced.
All this is happening amid what now clearly is a deepening recession, with the highest job losses and deepest drops in consumer spending in decades. The Labor Department reported on Thursday that weekly jobless claims jumped to 542,000, a 16-year high, last week. That suggests a fast-deepening recession.
The White House Thursday acknowledged for the first time that it now supports efforts in Congress to extend unemployment benefits for longer periods to the millions of Americans who can't find work in the downturn.
Consumer spending drives about two-thirds of U.S. economic activity, and as unemployment mounts and consumers retrench, that leads to even more unemployment, mortgage delinquencies and foreclosures.
"The problem now is what will be happening with jobs," Brinkmann said.
Thursday, November 13, 2008
Condo owners and the homeless co-exist in Bellingham
BELLINGHAM -- With a fierce stare, Pastor Chuck Sargent describes how homeless people he's feeding have slashed his tires, only to come back later and apologize. He says one is threatening to kill him. The rules prevent sleeping on the property, but drunks still pass out on the front porch.
From the log-cabin-style building in Old Town, Sargent and his Church on the Street Bellingham practice tough love for the homeless. But he's first to admit it's not easy.
That's why he doubts the city's plan to transform the industrial area -- Bellingham's Skid Row, as one neighbor calls it -- into an urban village with commercial-residential buildings and a mix of people. He doesn't believe the homeless and condo owners will blend.
"If they can't co-exist with the people ministering to them, how are they going to co-exist with the people who give them nothing?" he asked. "You're asking for trouble if you develop this into high-rises."
The city's plan calls for redeveloping Old Town, which is between and includes parts of the Lettered Streets neighborhood and downtown.
Will the homeless and condo owners mix like peanut butter and jelly, or oil and water? Will their presence slow redevelopment? Or will redevelopment simply push them out?
Opinions vary. But city officials and a New York-based group specializing in public spaces say successful redevelopment has been done elsewhere and can work in Old Town.
"Design for your hopes, not your fears," said Ethan Kent, a vice president at New York-based Project for Public Spaces, which in 2006 advised leaders in Whatcom County. "Building a city out of fear of that population is not going to create a great city."
The City Council in March approved the Old Town plan, which calls for adding between 860 and 1,120 housing units and up to 400,000 square feet of commercial space by 2022.
The city already has invested about $8 million in local, state and federal money in Old Town, and it has committed to millions more. Money has been spent on environmental restoration of Whatcom Creek and improvements to Maritime Heritage Park and Holly and Central streets.
The city is now waiting for redevelopment to happen.
Stakeholders disagree on how a visible homeless population will affect those efforts.
Developer Fred Bovenkamp is optimistic that redevelopment can happen with the homeless there. He owns land and is planning projects in or near Old Town. "I would walk that area any time of the day or night and not feel unsafe," he said.
One of his projects includes 63 housing units and 5,000 square feet of retail/office space at the former site of Hempler's meat company at F and Astor streets. That's across from the Lighthouse Mission, which provided nearly 9,000 meals in August. But in the more than three years Bovenkamp has owned the site, he's never had vandalism.
Bovenkamp said the city erred in letting Lighthouse Mission Ministries take over three corners of F and Holly streets -- the gateway to Old Town. Lighthouse is now building that third part -- a $1.5 million, 25-bed shelter opposite its main facility.
Still, he said, the mission provides crucial services in the community, and redevelopment could co-exist with the homeless.
Lighthouse Executive Director Ron Buchinski hung up on a Bellingham Herald reporter and didn't respond to several follow-up messages. He did not comment to the city during creation of the Old Town plan, said Tara Sundin, who managed forming the plan.
Bovenkamp points to Seattle's Belltown as an example where condominiums successfully moved in next to homeless services. Belltown has more than 8,600 housing units, at a density of about 40 per acre, and the city of Seattle wants 4,700 more units there by 2024.
Bellingham officials hope redevelopment will attract more people to what some people have nicknamed "Maritime Homeless Park."
"That will, I think, really help the comfort of the park and will bring more people down there," Sundin said. A planned playground there will also draw families with children, she said.
Others aren't so confident.
Old Town property owner John Lemperes last year told city staff he was concerned about the impact to the homeless and that redevelopment might be limited by their presence.
Michael McAuley, vice chairman of the Lettered Streets Neighborhood Association, said the homeless create "a redevelopment challenge for that part of town."
The Lighthouse Mission has done a fantastic job of helping homeless, he said, but the more it expands the less businesses will want to locate in what he called "Bellingham's Skid Row." He suggested the city help the mission relocate.
"The city is optimistic, I think, in glossing over some of the problems," he said, "because they just don't know how to deal with it."
What will happen to the homeless amid redevelopment?
Developer Ken Imus remembers when Fairhaven was empty lots, stray animals, taverns and drugs. In the early 1970s, he bought his first building and spruced it up. He's also constructed new buildings. It took years, he said, but he eventually helped create a new atmosphere.
Redeveloping and cleaning up Old Town means the homeless have to go, he said. But he doesn't have a solution.
"You can't have it both ways. You can't have transients and homeless and expect grandma to bring the grandkids and come shopping," he said. "It's been proven around the country. It just doesn't work."
Chris Grabber, a homeless man who volunteers at Church on the Street Bellingham, fears the homeless will be pushed out.
"What the city will do is put the high-rises in, and that will be the reason to boot the homeless out of here," he said.
Others say a blending of demographics will benefit everyone.
In successful redevelopments, no one demographic dominates the public space, said Kent, of the Project for Public Spaces. The best way to handle areas with homeless is to bring in other people with new developments designed to create attractive, vibrant shared public spaces, he said.
Using those spaces actively -- with outdoor concerts, vendors and outdoor cafe seating -- also helps make the area feel safer, he added.
Wednesday, November 12, 2008
NY Times: Affordable Housing Deals Are Stalling
By TERRY PRISTIN November 12, 2008
At a time when projects all over New York are being canceled or postponed, a development team that plans to transform a weedy site in East Harlem into a 12-story rental apartment building had cause to celebrate last week. Despite the economic downturn, the partners were able to complete the financing for the $65 million building and schedule a groundbreaking for next Tuesday.
The building, which is to rise on a site at 124th Street and Second Avenue that is a patchwork of 10 city-owned and private lots, will be known as the Tapestry. Half of its 184 apartments will rent at the market rate, while 30 percent will be set aside for people whose household income is less than 130 percent of the New York area median income, which is currently $74,600, and 20 percent for people who earn only 50 percent of the median income.
Getting a project like this under way is usually a time-consuming exercise. The developers — Jonathan F. P. Rose and Nicholas and Gerard Lettire — had to stitch together a daunting array of tax credits, tax-exempt bonds, loans and grants.
But even these days, money is available for well-structured projects, said Mr. Rose, who has been developing affordable housing around the country for 19 years. “The developer has to have a good track record, and financial strength, and the project has to be well thought-out,” he said in an interview in his Fifth Avenue office.
He said he hoped to close the financing next month for two more income-restricted projects — one in Albuquerque and another in Harlem, on 140th Street and Riverside Drive, to be developed in partnership with the Fortune Society, a nonprofit organization that provides services to ex-convicts.
Affordable housing is said to do better than other real estate sectors in a bad economy because government subsidies are available, land and construction costs fall and demand for the apartments rises.
But because of the toll that the credit squeeze has taken on financial institutions, busy developers like Mr. Rose may be more the exception than the rule. Though the need for affordable housing is likely to grow as unemployment worsens, specialists in mixed-income rental housing say that many developers — especially outside of New York, Los Angeles, San Francisco and Chicago — are finding it difficult or even impossible to put their deals together.
“We think there is an enormous slowdown in the production of affordable housing that’s happening right now,” said Richard Paul Richman, the chairman of the Richman Group, a company based in Greenwich, Conn., that develops affordable housing nationwide. “We believe that the shortage of equity is so severe that even qualified developers won’t get funded.”
To read full article, CLICK HERE
At a time when projects all over New York are being canceled or postponed, a development team that plans to transform a weedy site in East Harlem into a 12-story rental apartment building had cause to celebrate last week. Despite the economic downturn, the partners were able to complete the financing for the $65 million building and schedule a groundbreaking for next Tuesday.
The building, which is to rise on a site at 124th Street and Second Avenue that is a patchwork of 10 city-owned and private lots, will be known as the Tapestry. Half of its 184 apartments will rent at the market rate, while 30 percent will be set aside for people whose household income is less than 130 percent of the New York area median income, which is currently $74,600, and 20 percent for people who earn only 50 percent of the median income.
Getting a project like this under way is usually a time-consuming exercise. The developers — Jonathan F. P. Rose and Nicholas and Gerard Lettire — had to stitch together a daunting array of tax credits, tax-exempt bonds, loans and grants.
But even these days, money is available for well-structured projects, said Mr. Rose, who has been developing affordable housing around the country for 19 years. “The developer has to have a good track record, and financial strength, and the project has to be well thought-out,” he said in an interview in his Fifth Avenue office.
He said he hoped to close the financing next month for two more income-restricted projects — one in Albuquerque and another in Harlem, on 140th Street and Riverside Drive, to be developed in partnership with the Fortune Society, a nonprofit organization that provides services to ex-convicts.
Affordable housing is said to do better than other real estate sectors in a bad economy because government subsidies are available, land and construction costs fall and demand for the apartments rises.
But because of the toll that the credit squeeze has taken on financial institutions, busy developers like Mr. Rose may be more the exception than the rule. Though the need for affordable housing is likely to grow as unemployment worsens, specialists in mixed-income rental housing say that many developers — especially outside of New York, Los Angeles, San Francisco and Chicago — are finding it difficult or even impossible to put their deals together.
“We think there is an enormous slowdown in the production of affordable housing that’s happening right now,” said Richard Paul Richman, the chairman of the Richman Group, a company based in Greenwich, Conn., that develops affordable housing nationwide. “We believe that the shortage of equity is so severe that even qualified developers won’t get funded.”
To read full article, CLICK HERE
Tuesday, October 7, 2008
Cut the Sprawl, Cut the Warming
NY Times Editorial - October 6, 2008
For years, while Washington slept, most of the serious work on climate change has occurred in the states, and no state has worked harder than California. The latest example of California's originality is a new law — the nation's first — intended to reduce greenhouse gas emissions by curbing urban sprawl and cutting back the time people have to spend in their automobiles.
Passenger vehicles are the biggest single source of carbon dioxide in California, producing nearly one-third of the total. Meanwhile, the number of miles driven in California has increased 50 percent faster than the rate of population growth, largely because people have to drive greater distances in their daily lives.
The new law has many moving parts, but the basic sequence is straightforward. The state's Air Resources Board will determine the level of emissions produced by cars and light trucks, including S.U.V.'s, in each of California's 17 metropolitan planning areas. Emissions-reduction goals for 2020 and 2035 would be assigned to each area. Local governments would then devise strategies for housing development, road-building and other land uses to shorten travel distances, reduce driving and meet the new targets.
One obvious solution would be to change zoning laws so developers can build new housing closer to where people work. Another is to improve mass transit — in woefully short supply in California — so commuters don't have to rely so much on cars.
The bill contains significant incentives, including the promise of substantial federal and state money to regions whose plans pass muster. In addition, and with the consent of the environmental community, the state will relax various environmental rules to allow "infill" — higher-density land use in or near cities and towns.
The bill's architect, State Senator Darrell Steinberg, worked closely with developers and environmental groups like the Natural Resources Defense Council. The measure is the latest in a string of initiatives from the California Legislature, including a 2002 law that would greatly reduce carbon emissions from automobiles, and a 2006 law requiring that one-fifth of California's energy come from wind and other renewable sources.
Given California's size, these and other initiatives will help reduce global greenhouse gas emissions. Even more progress would be made if others follow. New York and 15 other states have already said they will adopt California's automobile emissions standards when the federal government gives them the green light — which the Bush administration has stubbornly refused to do.
There is, of course, no substitute for federal action or for American global leadership on climate change, both of which the next president will have to deliver.
Thursday, September 18, 2008
Santa Rosa Affordable Housing
From Northbay Biz (September, 2008)
By Sarah Campbell
Santa Rosa’s efforts to create ample affordable housing aren’t without their limits, but they’re getting noticed throughout the Bay Area.
Is “affordable housing” an oxymoron? In Santa Rosa, the puzzle of how to answer “no” to this question has always been difficult. And although prices have dropped 26.47 percent over the last year, median home prices still hover around $375,000—a hefty amount for many families in Sonoma County, the majority of whom earned between $50,000 and $74,999 in 2006. With an annual income of $61,500 for a family of four currently considered low income in Santa Rosa, this means a significant percentage of the community—teachers, nurses, firefighters, bank tellers, students trying to start a career or raise a family, and the people who harvest our grapes, carry our mail and serve us coffee—are working in a place they can’t afford to call home.
The situation isn’t going unnoticed. As the fifth-largest city in the Bay Area, Santa Rosa has recently gained attention as one of the region’s largest producers of affordable housing, ranking third only behind San Francisco and San Jose, according to the Association of Bay Area Governments (ABAG).
“ABAG’s low income housing goals for cities in the Bay Area are quite ambitious,” says Bill Arnone, a lawyer with Santa Rosa-based Merrill, Arnone and Jones, who’s also a member and past chairman of the Santa Rosa Housing Authority. “Few cities meet them. We’re one of the few that does.” Between 1999 and 2006, the city subsidized the production of 1,787 low-income housing units in Santa Rosa, which was 138 percent of the 970-unit goal projected for them by ABAG. “We’re proactive in letting developers know what our affordable housing budget is each year—how much money we can give them—and let them come to us,” says Arnone. And over the last nine years, this method has been working. Within the last fiscal year (2007/08) alone, 320 units were completed, up from 279 in 2006/07 and just 31 in 2005/06. The city celebrated the dedication of its 4,000th affordable housing unit in January 2007 and ended its 2007/08 fiscal year in June with 1,200 units in various stages of production; 389 units should be completed by the close of the 2008/09 fiscal year, which began July 1.
But the city’s efforts don’t just stop with development. “There are different needs, beyond affordable housing,” says Arnone. “It’s not enough to get units in the ground, people also need rental assistance. The Section 8 voucher program assists people with rent subsidies for units they normally couldn’t afford.” The Section 8 voucher rental assistance program, which serves 1,800 families annually and puts $1 million a month back into the local real estate economy, is just part of what Arnone calls the “Santa Rosa Housing Continuum,” which, on top of addressing affordable housing needs, provides transitional and special needs housing, and addresses homelessness for “people who don’t have housing at all, much less affordable housing.”
David Gouin, executive director of Santa Rosa’s Department of Economic Development and Housing, also feels that, while Santa Rosa’s third-place ranking is something to be proud of, the numbers don’t reflect the whole picture. “ABAG doesn’t formally recognize other programs that assist low income households, such as the city’s Housing Accessibility Modification program that provides funding for wheelchair ramps, grab bars, and the like. The city also isn’t recognized for its investment in the acquisition and rehabilitation of existing units, or for special needs facilities.”
Gouin also cites the two city-owned and operated homeless shelters, Brookwood and Samuel Jones Hall, as well as a recent project the city worked on with Community Development Corporation of Santa Rosa in collaboration with Vietnam Veterans of California to acquire an existing-but-vacant residential care facility on West Hearn Avenue that will be used as a 12-bed transitional housing facility for homeless veterans. Gouin says homeownership options, like Santa Rosa’s homebuyer’s assistance program are also overlooked.
Plain and simple
David Grabill, who’s the lawyer for the Sonoma County Housing Advocacy Group, also thinks a critical part of the affordable housing reality in Santa Rosa is being overlooked, but for completely different reasons. “Per capita, Santa Rosa’s efforts haven’t been so good,” Grabill says. “They’ve done a reasonably good job of encouraging affordable housing, as have most cities in Sonoma County, but I can’t say they’re the best, because so many factors come into play.” Grabill points to Santa Rosa’s lack of affordable housing for the very low-income (those making less than $38,900 a year, or just 50 percent of the median income). While Santa Rosa is exceeding its ABAG goal in terms of low-income units produced, like many other cities in the Bay Area, it’s far behind in production of very low-income housing, issuing just 1,539 permits between 1999 and 2007—only 47 percent of its regional need (an additional 295 very low-income units are in various stages of production, though, bringing the city up to 65 percent). “It’s certainly more challenging to provide very low-income housing,” agrees Gouin. “It requires more subsidies to make the rent affordable. It’s as plain and simple as that.”
And, in plain and simple terms, when it comes to affordable housing in Santa Rosa, efforts are dependent on political will, the availability of funding, land suitably zoned for multi-family residential, certainty in the entitlement process and developers wih expertise to combine a variety of specialized financing. “The Santa Rosa Housing Trust acts like a lender,” says Gouin. “It’s a sum of money gathered from a variety of sources—pooled from federal, state and local levels—to be put toward affordable housing development.”
According to Arnone, in addition to federal money from the U.S. Department of Housing and Urban Development (HUD), which averages roughly $5 million a year, the Santa Rosa Housing Authority also reroutes 20 percent of revenue raised from redevelopment project areas (roughly $2 to $3 million annually) to the Housing Trust Fund for affordable housing. Both Arnone and Gouin reference the Southwest Redevelopment Project Area, which stretches 2,000 acres south of Highway 12 and west of 101, and the Gateways Project Area, approximately 1,100 acres surrounding downtown and Railroad Square. They say they’re good examples of current redevelopment projects that, on top of redeveloping neglected infrastructure, roads and sewer systems, have the potential to generate new revenue for the city and give a boost to funding for future affordable housing developments.
When asked what’s made Santa Rosa’s affordable housing efforts so successful, both Arnone and Gouin agree the inclusionary ordinance and in-lieu fee structure of Santa Rosa’s housing policies have helped maintain the incentives and funding for would-be developers to produce affordable housing units. The premise is simple: Santa Rosa’s inclusionary ordinance requires developers of 15 acres or more to provide 15 to 20 percent of housing units for lower income households. For less than 15 acres, developers can choose to pay an in-lieu fee, which goes into the Housing Trust Fund. As of June 2007, the fee (which varies based on project density and size) starts at $0.97 per square foot and was responsible for raising roughly $1 million during the 2007/08 fiscal year. Critic Grabill admits Santa Rosa’s inclusionary ordinance is unique in Sonoma County, but also feels the 15-acre threshold needs to be much lower, because, “developers usually split proposed projects up into smaller parcels to avoid including affordable units. The city granted exemptions to the requirement when approving those that couldn’t be easily split, such as Oakmont. At this time, there are almost no undeveloped 15-acre parcels in Santa Rosa.”
Gouin admits the in-lieu fee may not be playing the same strong role it once did. “The first year of the housing downturn, we saw a lot of opportunities to secure and develop affordable housing,” he says. “In 2007, 30 percent of all building permits issued for residential development were for affordable housing. However, building has stopped, and in-lieu fees have gone down. If it can’t be paid, it can’t be loaned. And if the development of market rate units goes down, our ability ot make loans to developers of affordable housing is impacted.”
In 2007/08, the Housing Authority’s budget was $22.5 million. This fiscal year, which started July 1, it will jump 37 percent, to $30.9 million—but only because of a short-term $11.5 million bond against projected tax increment revenue from the Southwest Redevelopment Project Area. The most recent city of Santa Rosa 2008/09 fiscal year budget report states, “This revenue source will be allocated to homeless shelter operations, homeless service contracts and federally mandated fair housing services,” which isn’t good news for padding the available funds in the Santa Rosa Housing Trust.
Over the course of the next year, Gouin says the Department of Economic Development and Housing plans to “sustain the units already in preconstruction and, ideally, be in a position to assist new development…if we have the capacity.” But with a budget 30 percent smaller than the previous year, Gouin admits the “focus is to keep the projects already underway going. We’ll be entertaining less new development proposals [this fiscal year].”
Changing times, same needs
John Lowry, executive director of Burbank Housing, a leading nonprofit developer of affordable housing in Sonoma County, is acutely aware of what rising costs and smaller budgets may mean for future affordable housing projects. “We have a business plan to develop 300 units a year, and we reached that goal. But now we’ve had a little bit of a cutback,” says Lowry, pointing to Colgan Meadows, an 84-unit affordable apartment development on Dutton Meadow, which will be completed this fall. “There’s a constraint for rentals, because costs are up and we need more subsidizeed financing, but there’s greater competition for [this resource].”
This burden of costs isn’t just affecting the affordable housing sector. According to Lowry, over the last 30 years, as more costs have been shifted to developers (both of affordable housing and market rate developments), costs have increased dramatically. It’s a trend that’s ultimately reflected in the price of housing. These spiraling costs include land, which is influenced by availability, construction (public fees, environmental mitigation), design, permit processing and finance. Higher development and construction costs mean higher housing prices, which only complicates the affordable housing situation. At the same time, Santa Rosa’s affordable housing budget is reduced because of decreased development.
Lowry readily agrees there’s no easy fix (nor one that will please everyone) to this problem, but adds that continuing to raise fees in hopes of generating more income isn’t a viable policy at this time. “Right now, most of the proposed housing developments are no longer feasible, so [developers] are waiting around for the market to shift—but the fees are still going up. Developers have always protested fee increases, but now that building has stopped, a serious conversation on this issue is needed.”
Grabill agrees that, even with current budget constraints, this shouldn’t be a closed issue. “We need the same amount of affordable housing that we needed before the housing prices took a tumble. The need is continuing regardless of the city’s budget problems, regardless of the housing downturn. It’s a fact of life. We need to keep building, tapping into creative funding and encouraging private developers to voluntarily build affordable housing.”
In stark contrast to Lowry, however, Grabill suggests the city consider adding another fee, often called a commercial-linkage fee, to provide additional funding for affordable housing and offset the impact of the new, large-scale commercial developments (like Wal-Mart) on the city’s limited affordable housing supply. A commercial-linkage fee, also called a jobs-housing linkage fee, would require larger commercial developers to pay a fee, determined by the size of a proposed building, that would be used toward developing affordable housing along with its commercial development. The idea is, if a commercial development draws workers to Santa Rosa, it should support the city in providing those workers with a place to live. Although commercial-linkage fee proposals have been met with opposition in Sonoma County in the past, it can be argued that it’s one way to ensure employers take responsibility for their role in alleviating (or aggravating) the city’s affordable housing problem.
Employer education
Educating employers about the importance of employees living close to work is what the nonprofit Northbay Family Homes (NFH) does best. Located in Novato, NFH works throughout the Bay Area, including Marin and Sonoma counties, providing innovative loan programs, access to grants and onsite workshops to facilitate workforce home ownership whenever possible. “Education needs to happen,” says Carrie Pierson, vice president and director of real estate and finance for NFH. “We go to employers directly and educate them and their workforce about buying housing closer to the workplace.”
A nonprofit that specializes in facilitating the home buying process for both low-income and existing housing stock, Pierson adds, “We’re a Nonprofit Buyers Broker. Builders enlist our help to sell homes to the workforce. We don’t do the construction, but we help facilitate the development outreach and purchase process with an emphasis on education and reaching undeserved markets.”
Northbay Family Homes and Stewart Title Company are spearheading the Employers Empowering Homeownership (EEH) initiative, which was launched in 2007 by the Northbay Leadership Council. This innovative program, born in Marin and Sonoma counties, is set to launch statewide through Stewart’s Community Forward efforts.
NFH was a partner in the development of the mixed-income Meadow Park community at the former Hamilton airfield, and Pierson says she’s seen an increase in employers interested in providing close-to-work home ownership for employees. As a result, the amount of homeownership Northbay Family Homes has been able to facilitate is growing. And although she can’t reveal its location or name (just yet), Pierson says NFH has a Sonoma County development project on the horizon that will include both below market rate and market rate homes.
Model efforts
Both Arnone and Gouin emphasize that, for its size, Santa Rosa is doing a commendable job. “Santa Rosa has one-third of the county’s population,” says Gouin, “yet the city develops more than half of the affordable housing in Sonoma County.”
“We’re doing such a good job, our program models are being replicated by other communities,” he continues, citing Berkeley and Walnut Creek among the Bay Area cities that have been in contact with him regarding their own affordable housing models. Arnone is optimistic that the Southwest Redevelopment Project Area and the currently stalled Gateways Project Area (due to a pending lawsuit), will reinvigorate affordable housing development efforts in Santa Rosa.
Lowry concedes that, despite his other concerns, “The city of Santa Rosa has provided staffing, support and a huge amount of effort, and I think it deserves a lot of credit for that.” And while Grabill says “optimistic” is too strong of a word. “City councils in the county seem to recognize the importance of affordable housing to their communities, and we’re seeing a broader range of housing types in the approval porcess. That’s encouraging, but we’re still a long way from our goal: decent, attractive, affordable housing for all in sustainable, livable neighborhoods in all cities in Sonoma County.”
“It’s time we think of housing not as a problem,” wrote Lowry in an editorial to the Press Democrat last year, “but as a critical component of a healthy community.” Gouin, Arnone and, certainly, Grabill would be unlikely to quibble with him.
“There are reasons a city should pay attention to whether people can afford to live there,” says Arnone. “If teachers and policemen can’t afford to live there, the city will suffer. It’s in a city’s best interest economically, but also socially.”
The question of where Santa Rosa has been and what it’s accomplished in regard to affordable housing is much easier to answer than where the city is headed. But one thing is certain: The debates over rental units or square footage have great consequence, and the importance that city officials, advocate groups and residents place on the availability of affordable housing will have a direct correlation to the future of the city socially, culturally and economically.
By Sarah Campbell
Santa Rosa’s efforts to create ample affordable housing aren’t without their limits, but they’re getting noticed throughout the Bay Area.
Is “affordable housing” an oxymoron? In Santa Rosa, the puzzle of how to answer “no” to this question has always been difficult. And although prices have dropped 26.47 percent over the last year, median home prices still hover around $375,000—a hefty amount for many families in Sonoma County, the majority of whom earned between $50,000 and $74,999 in 2006. With an annual income of $61,500 for a family of four currently considered low income in Santa Rosa, this means a significant percentage of the community—teachers, nurses, firefighters, bank tellers, students trying to start a career or raise a family, and the people who harvest our grapes, carry our mail and serve us coffee—are working in a place they can’t afford to call home.
The situation isn’t going unnoticed. As the fifth-largest city in the Bay Area, Santa Rosa has recently gained attention as one of the region’s largest producers of affordable housing, ranking third only behind San Francisco and San Jose, according to the Association of Bay Area Governments (ABAG).
“ABAG’s low income housing goals for cities in the Bay Area are quite ambitious,” says Bill Arnone, a lawyer with Santa Rosa-based Merrill, Arnone and Jones, who’s also a member and past chairman of the Santa Rosa Housing Authority. “Few cities meet them. We’re one of the few that does.” Between 1999 and 2006, the city subsidized the production of 1,787 low-income housing units in Santa Rosa, which was 138 percent of the 970-unit goal projected for them by ABAG. “We’re proactive in letting developers know what our affordable housing budget is each year—how much money we can give them—and let them come to us,” says Arnone. And over the last nine years, this method has been working. Within the last fiscal year (2007/08) alone, 320 units were completed, up from 279 in 2006/07 and just 31 in 2005/06. The city celebrated the dedication of its 4,000th affordable housing unit in January 2007 and ended its 2007/08 fiscal year in June with 1,200 units in various stages of production; 389 units should be completed by the close of the 2008/09 fiscal year, which began July 1.
But the city’s efforts don’t just stop with development. “There are different needs, beyond affordable housing,” says Arnone. “It’s not enough to get units in the ground, people also need rental assistance. The Section 8 voucher program assists people with rent subsidies for units they normally couldn’t afford.” The Section 8 voucher rental assistance program, which serves 1,800 families annually and puts $1 million a month back into the local real estate economy, is just part of what Arnone calls the “Santa Rosa Housing Continuum,” which, on top of addressing affordable housing needs, provides transitional and special needs housing, and addresses homelessness for “people who don’t have housing at all, much less affordable housing.”
David Gouin, executive director of Santa Rosa’s Department of Economic Development and Housing, also feels that, while Santa Rosa’s third-place ranking is something to be proud of, the numbers don’t reflect the whole picture. “ABAG doesn’t formally recognize other programs that assist low income households, such as the city’s Housing Accessibility Modification program that provides funding for wheelchair ramps, grab bars, and the like. The city also isn’t recognized for its investment in the acquisition and rehabilitation of existing units, or for special needs facilities.”
Gouin also cites the two city-owned and operated homeless shelters, Brookwood and Samuel Jones Hall, as well as a recent project the city worked on with Community Development Corporation of Santa Rosa in collaboration with Vietnam Veterans of California to acquire an existing-but-vacant residential care facility on West Hearn Avenue that will be used as a 12-bed transitional housing facility for homeless veterans. Gouin says homeownership options, like Santa Rosa’s homebuyer’s assistance program are also overlooked.
Plain and simple
David Grabill, who’s the lawyer for the Sonoma County Housing Advocacy Group, also thinks a critical part of the affordable housing reality in Santa Rosa is being overlooked, but for completely different reasons. “Per capita, Santa Rosa’s efforts haven’t been so good,” Grabill says. “They’ve done a reasonably good job of encouraging affordable housing, as have most cities in Sonoma County, but I can’t say they’re the best, because so many factors come into play.” Grabill points to Santa Rosa’s lack of affordable housing for the very low-income (those making less than $38,900 a year, or just 50 percent of the median income). While Santa Rosa is exceeding its ABAG goal in terms of low-income units produced, like many other cities in the Bay Area, it’s far behind in production of very low-income housing, issuing just 1,539 permits between 1999 and 2007—only 47 percent of its regional need (an additional 295 very low-income units are in various stages of production, though, bringing the city up to 65 percent). “It’s certainly more challenging to provide very low-income housing,” agrees Gouin. “It requires more subsidies to make the rent affordable. It’s as plain and simple as that.”
And, in plain and simple terms, when it comes to affordable housing in Santa Rosa, efforts are dependent on political will, the availability of funding, land suitably zoned for multi-family residential, certainty in the entitlement process and developers wih expertise to combine a variety of specialized financing. “The Santa Rosa Housing Trust acts like a lender,” says Gouin. “It’s a sum of money gathered from a variety of sources—pooled from federal, state and local levels—to be put toward affordable housing development.”
According to Arnone, in addition to federal money from the U.S. Department of Housing and Urban Development (HUD), which averages roughly $5 million a year, the Santa Rosa Housing Authority also reroutes 20 percent of revenue raised from redevelopment project areas (roughly $2 to $3 million annually) to the Housing Trust Fund for affordable housing. Both Arnone and Gouin reference the Southwest Redevelopment Project Area, which stretches 2,000 acres south of Highway 12 and west of 101, and the Gateways Project Area, approximately 1,100 acres surrounding downtown and Railroad Square. They say they’re good examples of current redevelopment projects that, on top of redeveloping neglected infrastructure, roads and sewer systems, have the potential to generate new revenue for the city and give a boost to funding for future affordable housing developments.
When asked what’s made Santa Rosa’s affordable housing efforts so successful, both Arnone and Gouin agree the inclusionary ordinance and in-lieu fee structure of Santa Rosa’s housing policies have helped maintain the incentives and funding for would-be developers to produce affordable housing units. The premise is simple: Santa Rosa’s inclusionary ordinance requires developers of 15 acres or more to provide 15 to 20 percent of housing units for lower income households. For less than 15 acres, developers can choose to pay an in-lieu fee, which goes into the Housing Trust Fund. As of June 2007, the fee (which varies based on project density and size) starts at $0.97 per square foot and was responsible for raising roughly $1 million during the 2007/08 fiscal year. Critic Grabill admits Santa Rosa’s inclusionary ordinance is unique in Sonoma County, but also feels the 15-acre threshold needs to be much lower, because, “developers usually split proposed projects up into smaller parcels to avoid including affordable units. The city granted exemptions to the requirement when approving those that couldn’t be easily split, such as Oakmont. At this time, there are almost no undeveloped 15-acre parcels in Santa Rosa.”
Gouin admits the in-lieu fee may not be playing the same strong role it once did. “The first year of the housing downturn, we saw a lot of opportunities to secure and develop affordable housing,” he says. “In 2007, 30 percent of all building permits issued for residential development were for affordable housing. However, building has stopped, and in-lieu fees have gone down. If it can’t be paid, it can’t be loaned. And if the development of market rate units goes down, our ability ot make loans to developers of affordable housing is impacted.”
In 2007/08, the Housing Authority’s budget was $22.5 million. This fiscal year, which started July 1, it will jump 37 percent, to $30.9 million—but only because of a short-term $11.5 million bond against projected tax increment revenue from the Southwest Redevelopment Project Area. The most recent city of Santa Rosa 2008/09 fiscal year budget report states, “This revenue source will be allocated to homeless shelter operations, homeless service contracts and federally mandated fair housing services,” which isn’t good news for padding the available funds in the Santa Rosa Housing Trust.
Over the course of the next year, Gouin says the Department of Economic Development and Housing plans to “sustain the units already in preconstruction and, ideally, be in a position to assist new development…if we have the capacity.” But with a budget 30 percent smaller than the previous year, Gouin admits the “focus is to keep the projects already underway going. We’ll be entertaining less new development proposals [this fiscal year].”
Changing times, same needs
John Lowry, executive director of Burbank Housing, a leading nonprofit developer of affordable housing in Sonoma County, is acutely aware of what rising costs and smaller budgets may mean for future affordable housing projects. “We have a business plan to develop 300 units a year, and we reached that goal. But now we’ve had a little bit of a cutback,” says Lowry, pointing to Colgan Meadows, an 84-unit affordable apartment development on Dutton Meadow, which will be completed this fall. “There’s a constraint for rentals, because costs are up and we need more subsidizeed financing, but there’s greater competition for [this resource].”
This burden of costs isn’t just affecting the affordable housing sector. According to Lowry, over the last 30 years, as more costs have been shifted to developers (both of affordable housing and market rate developments), costs have increased dramatically. It’s a trend that’s ultimately reflected in the price of housing. These spiraling costs include land, which is influenced by availability, construction (public fees, environmental mitigation), design, permit processing and finance. Higher development and construction costs mean higher housing prices, which only complicates the affordable housing situation. At the same time, Santa Rosa’s affordable housing budget is reduced because of decreased development.
Lowry readily agrees there’s no easy fix (nor one that will please everyone) to this problem, but adds that continuing to raise fees in hopes of generating more income isn’t a viable policy at this time. “Right now, most of the proposed housing developments are no longer feasible, so [developers] are waiting around for the market to shift—but the fees are still going up. Developers have always protested fee increases, but now that building has stopped, a serious conversation on this issue is needed.”
Grabill agrees that, even with current budget constraints, this shouldn’t be a closed issue. “We need the same amount of affordable housing that we needed before the housing prices took a tumble. The need is continuing regardless of the city’s budget problems, regardless of the housing downturn. It’s a fact of life. We need to keep building, tapping into creative funding and encouraging private developers to voluntarily build affordable housing.”
In stark contrast to Lowry, however, Grabill suggests the city consider adding another fee, often called a commercial-linkage fee, to provide additional funding for affordable housing and offset the impact of the new, large-scale commercial developments (like Wal-Mart) on the city’s limited affordable housing supply. A commercial-linkage fee, also called a jobs-housing linkage fee, would require larger commercial developers to pay a fee, determined by the size of a proposed building, that would be used toward developing affordable housing along with its commercial development. The idea is, if a commercial development draws workers to Santa Rosa, it should support the city in providing those workers with a place to live. Although commercial-linkage fee proposals have been met with opposition in Sonoma County in the past, it can be argued that it’s one way to ensure employers take responsibility for their role in alleviating (or aggravating) the city’s affordable housing problem.
Employer education
Educating employers about the importance of employees living close to work is what the nonprofit Northbay Family Homes (NFH) does best. Located in Novato, NFH works throughout the Bay Area, including Marin and Sonoma counties, providing innovative loan programs, access to grants and onsite workshops to facilitate workforce home ownership whenever possible. “Education needs to happen,” says Carrie Pierson, vice president and director of real estate and finance for NFH. “We go to employers directly and educate them and their workforce about buying housing closer to the workplace.”
A nonprofit that specializes in facilitating the home buying process for both low-income and existing housing stock, Pierson adds, “We’re a Nonprofit Buyers Broker. Builders enlist our help to sell homes to the workforce. We don’t do the construction, but we help facilitate the development outreach and purchase process with an emphasis on education and reaching undeserved markets.”
Northbay Family Homes and Stewart Title Company are spearheading the Employers Empowering Homeownership (EEH) initiative, which was launched in 2007 by the Northbay Leadership Council. This innovative program, born in Marin and Sonoma counties, is set to launch statewide through Stewart’s Community Forward efforts.
NFH was a partner in the development of the mixed-income Meadow Park community at the former Hamilton airfield, and Pierson says she’s seen an increase in employers interested in providing close-to-work home ownership for employees. As a result, the amount of homeownership Northbay Family Homes has been able to facilitate is growing. And although she can’t reveal its location or name (just yet), Pierson says NFH has a Sonoma County development project on the horizon that will include both below market rate and market rate homes.
Model efforts
Both Arnone and Gouin emphasize that, for its size, Santa Rosa is doing a commendable job. “Santa Rosa has one-third of the county’s population,” says Gouin, “yet the city develops more than half of the affordable housing in Sonoma County.”
“We’re doing such a good job, our program models are being replicated by other communities,” he continues, citing Berkeley and Walnut Creek among the Bay Area cities that have been in contact with him regarding their own affordable housing models. Arnone is optimistic that the Southwest Redevelopment Project Area and the currently stalled Gateways Project Area (due to a pending lawsuit), will reinvigorate affordable housing development efforts in Santa Rosa.
Lowry concedes that, despite his other concerns, “The city of Santa Rosa has provided staffing, support and a huge amount of effort, and I think it deserves a lot of credit for that.” And while Grabill says “optimistic” is too strong of a word. “City councils in the county seem to recognize the importance of affordable housing to their communities, and we’re seeing a broader range of housing types in the approval porcess. That’s encouraging, but we’re still a long way from our goal: decent, attractive, affordable housing for all in sustainable, livable neighborhoods in all cities in Sonoma County.”
“It’s time we think of housing not as a problem,” wrote Lowry in an editorial to the Press Democrat last year, “but as a critical component of a healthy community.” Gouin, Arnone and, certainly, Grabill would be unlikely to quibble with him.
“There are reasons a city should pay attention to whether people can afford to live there,” says Arnone. “If teachers and policemen can’t afford to live there, the city will suffer. It’s in a city’s best interest economically, but also socially.”
The question of where Santa Rosa has been and what it’s accomplished in regard to affordable housing is much easier to answer than where the city is headed. But one thing is certain: The debates over rental units or square footage have great consequence, and the importance that city officials, advocate groups and residents place on the availability of affordable housing will have a direct correlation to the future of the city socially, culturally and economically.
Thursday, September 11, 2008
Stockton agrees to GHG lawsuit settlement
Over a year ago, the California Attorney General and Sierra Club sued the City of Stockton claiming that that city's General Plan did not adequately address Greenhouse Gas ("GHG")impacts of future planned development and thus violated the California Environmental Quality Act and other laws.
On September 9, after a contentious public hearing, the city approved a landmark settlement agreement which requires among other things:
1. Regular GHG emission monitoring
2. The formation of an advisory committee consisting of representatives from
environmental. non-profit, labor, business and developer interests
3. The reduction of per capita Vehicle Miles Traveled ("VMT")
4. Target reductions in GHG emissions in accordance with AB 32
5. The implementation of a Green Building Program, including:
-Build It Green - residential '
-LEED Silver- phased 'approach
-Review requirement to stay among top 25% of ordinances in State
-Green Building retrofit w/50% remodel (18 months) ,
-Explore local assessment district to help fund retrofits
-Explore retrofits for CEQA mitigation
6: A Transit Gap Study, including "
-Strategies for reassessing transit use and funding
-Configuration of developments for all transportation modes
-Developments to provide funding or other support for transit
-Developments to have density to support transit use
7. The Support of Downtown Development
-Baseline number of new housing units in Greater Downtown and within
City limits
-Incentives for infill (e.g. reduced fees/limits)
-Incentives for districts and corridors
8. A strategy for the Edge and Downtown to Grow Together
-Minimum infrastructure requirements
-Milestones for infill in balance before new entitlements
-Finance mechanisms to assist infill
9. The Regular Monitoring of VMT
The settlement is expected to serve as a model for other cities in California to incorporate into their general plans. The full agreement and staff report to the City Council are here:
http://stockton.granicus.com/MetaViewer.php?view_id=12&event_id=357&meta_id=203941
http://stockton.granicus.com/MetaViewer.php?view_id=12&event_id=357&meta_id=203943)
On September 9, after a contentious public hearing, the city approved a landmark settlement agreement which requires among other things:
1. Regular GHG emission monitoring
2. The formation of an advisory committee consisting of representatives from
environmental. non-profit, labor, business and developer interests
3. The reduction of per capita Vehicle Miles Traveled ("VMT")
4. Target reductions in GHG emissions in accordance with AB 32
5. The implementation of a Green Building Program, including:
-Build It Green - residential '
-LEED Silver- phased 'approach
-Review requirement to stay among top 25% of ordinances in State
-Green Building retrofit w/50% remodel (18 months) ,
-Explore local assessment district to help fund retrofits
-Explore retrofits for CEQA mitigation
6: A Transit Gap Study, including "
-Strategies for reassessing transit use and funding
-Configuration of developments for all transportation modes
-Developments to provide funding or other support for transit
-Developments to have density to support transit use
7. The Support of Downtown Development
-Baseline number of new housing units in Greater Downtown and within
City limits
-Incentives for infill (e.g. reduced fees/limits)
-Incentives for districts and corridors
8. A strategy for the Edge and Downtown to Grow Together
-Minimum infrastructure requirements
-Milestones for infill in balance before new entitlements
-Finance mechanisms to assist infill
9. The Regular Monitoring of VMT
The settlement is expected to serve as a model for other cities in California to incorporate into their general plans. The full agreement and staff report to the City Council are here:
http://stockton.granicus.com/MetaViewer.php?view_id=12&event_id=357&meta_id=203941
http://stockton.granicus.com/MetaViewer.php?view_id=12&event_id=357&meta_id=203943)
Sunday, August 31, 2008
Mortgage Crisis Spawns Class Action Alleging Harassment of Minorities
The mortgage crisis has spawned an unusual federal class action by African-Americans in Antioch, Calif., a San Francisco suburb, alleging city intimidation and harassment of minorities who rent homes using federally subsidized Section 8 housing vouchers in an effort to force them out of the area.
"There is no question that the city and its police department are targeting Section 8 families, particularly African-American recipients," said Brad Seligman of the Impact Fund, a public interest law firm in Emeryville, Calif.
The real estate foreclosure crisis hit Antioch hard. In response, landlords and homeowners turned to renting homes to pay mortgages, often renting to tenants using federal rent subsidy vouchers, known as Section 8, according to Seligman.
By 2006, the inability of homeowners to sell homes allowed Section 8 participants to use their benefits to move out of urban centers to the suburb 40 miles west of San Francisco and to larger homes that might otherwise sit vacant, according to the suit.
The suit, Williams v. City of Antioch, No. C08-2301BZ (N.D. Calif.), states that the number of Section 8 Housing Choice vouchers grew in Antioch from 1,049 in 2003 to nearly 1,600 by 2007, representing more than 4 percent of the city's households. Many of the vouchers there are used by African-Americans, according to the suit. In the last five years, the number of African-Americans in Antioch has doubled, but still represents less than 15 percent of the city's total population.
During this period, Antioch officials began blaming city problems and crime in the city on Section 8 participants, according to the suit. The city council created a unit in the police department called the Community Action Team, to address "quality of life" issues in the town.
The suit, brought by five African-American women who rent homes using Section 8 vouchers, alleges that the city and police focused attention on people renting homes using the vouchers. The women say police looking for Section 8 violations subjected residents to warrantless searches of their homes. Police allegedly made threats to landlords who continued to accept the vouchers and they also allegedly intimidated renters with potential loss of benefits.
Along with the Impact Fund, the five women are represented by the ACLU of Northern California and Public Advocates, a public interest firm.
The city denied the suit's claims. "We emphatically reject the allegations by Public Advocates and the ACLU regarding our city's community-based policing efforts," said Lynn Tracy Nerland, Antioch city attorney in a prepared statement.
"We believe that any objective review of our city's policing efforts will reveal that these efforts are focused exclusively on criminal and/or dangerous behavior. Claims of other, sinister motivations are untrue and irresponsible," she said.
The suit seeks to enjoin the city and police from alleged targeting of Section 8 renters for investigation or threats. The suit also seeks damages and a declaration that the city actions violate state fair housing law.
Pamela A. MacLean
The National Law Journal
August 18, 2008
Monday, August 18, 2008
Mobile Home Wars
Even with Prop. 98 shot down, some mobile-home owners may still have to buy their lots. What can low-income residents do?
From: The 8/14/08 Bohemian: By P. Joseph Potocki
Sonoma resident Sam DiGiacomo is worried about losing his home. "We are currently under a total frontal attack—senior citizens and low-income families alike," he says.
DiGiacomo retired in 1996, after 30 years serving as a maintenance instructor with the Department of Defense; these days he's passionate about protecting mobile-home park (MHP) rental spaces for persons of limited means. DiGiacomo, a chapter president for the statewide organization Golden State Manufactured-Home Owners League, also sits on the Tri-Park Committee, representing the city of Sonoma's mobile-home owners.
"If it [MHP condo conversion] should happen here," DiGiacomo says, "I am sure that 80 percent of our residents would almost immediately be classified as poverty level."
Last September, California AB 1542, a bill sponsored by Santa Rosa assemblywomen Noreen Evans, was passed, only to be vetoed by the governor. Had the legislation been signed into law, it would have allowed manufactured-home owner-occupants statewide to retain their rent-controlled status, even if neighboring homeowners choose to purchase their lots.
Then came Proposition 98, which was designed to wipe out rent control altogether and pave the way for massive condo conversions of apartments and mobile-home parks across the state. Heavy hitters like Chicago developer Sam Zell, cited in the May 21 issue of the Bohemian as a major financial backer of the Prop. 98 initiative, tried to convince voters to pass the proposition in order to presumably protect basic property-ownership rights. But it got cold-cocked in this past June's primary, garnering just 39 percent support, while over 65 percent of the voters gave the nod to rival Proposition 99, conceived specifically to counteract 98's draconian strictures.
But even with Prop. 98 dead and buried, manufactured-home owners still face hurdles in a seemingly inexorable drive by the MHP industry to sell as many asphalt lots as mobile-home park owners care to offer. Present state law provides fewer protections to manufactured-home owners than do many county and municipal ordinances. This is certainly the case in Sonoma County, where over 50 percent of a mobile-home park's resident owners must first opt to purchase what lies below them in order to convert, or, in the parlance that has emerged, condoize the entire park.
Now the fight to preserve low-income MHP rental space has shifted back to a municipality, in this case to Sonoma. On Wednesday, Aug. 20, the Sonoma City Council will vote on an ordinance that DiGiacomo claims will be "a tiny bit stronger" than the present Sonoma County protections. The ordinance is expected to pass, perhaps unanimously, but that doesn't mean DiGiacomo or the city of Sonoma are out of the woods yet.
L. Sue Loftin is a San Diego County–based attorney for Preston Cook, the owner of Rancho de Sonoma mobile-home park. Cook's park is situated just inside the city limits, and his intentions are clearly stated. "What I want to do with my park is make it a resident-owned community," he says, "so the residents of Rancho de Sonoma have an opportunity to own the land, instead of just their homes."
To realize his goal, Cook filed a claim on Aug. 6 against the moratorium on condo conversions. This claim appears to be the first step in a process that could lead to a lawsuit demanding big bucks from Sonoma, if, Loftin says, "we can't resolve the issues with the city."
Loftin says that Cook's conversion plans include $2 million in park renovations, affordable loans to low-income residents choosing to purchase and continued rent control for those who choose not to buy until such time as they either die or move away.
Meanwhile, the media have portrayed a divided MHP population, the majority of whom are over 55 years of age and living on fixed incomes. An ABC television report that aired last month, as well as articles in various regional newspapers, stress that there are mobile-home owners who either favor or will consider purchasing the property beneath their units.
DiGiacomo says there's no such rift. "It is notorious that they come up and try to disrupt the homeowners organization, and that is exactly what happened," he explains. "An ad hoc committee got together to unseat the current board and the current president—which never happened."
Close to 700 persons live in Sonoma's three mobile-home parks. Monthly rents range from $350 to $800. But, DiGiacomo says, "We have heard quotes that they'll charge upwards of $225,000 per space." Whether that figure is inflated or not, one thing is sure: by adding monthly condo fees to mortgage payments, this once affordable form of housing is, as Cook himself told the Sonoma Index-Tribune recently, "an endangered species. I would say there will be thousands of park closures in the next 10 to 20 years."
From: The 8/14/08 Bohemian: By P. Joseph Potocki
Sonoma resident Sam DiGiacomo is worried about losing his home. "We are currently under a total frontal attack—senior citizens and low-income families alike," he says.
DiGiacomo retired in 1996, after 30 years serving as a maintenance instructor with the Department of Defense; these days he's passionate about protecting mobile-home park (MHP) rental spaces for persons of limited means. DiGiacomo, a chapter president for the statewide organization Golden State Manufactured-Home Owners League, also sits on the Tri-Park Committee, representing the city of Sonoma's mobile-home owners.
"If it [MHP condo conversion] should happen here," DiGiacomo says, "I am sure that 80 percent of our residents would almost immediately be classified as poverty level."
Last September, California AB 1542, a bill sponsored by Santa Rosa assemblywomen Noreen Evans, was passed, only to be vetoed by the governor. Had the legislation been signed into law, it would have allowed manufactured-home owner-occupants statewide to retain their rent-controlled status, even if neighboring homeowners choose to purchase their lots.
Then came Proposition 98, which was designed to wipe out rent control altogether and pave the way for massive condo conversions of apartments and mobile-home parks across the state. Heavy hitters like Chicago developer Sam Zell, cited in the May 21 issue of the Bohemian as a major financial backer of the Prop. 98 initiative, tried to convince voters to pass the proposition in order to presumably protect basic property-ownership rights. But it got cold-cocked in this past June's primary, garnering just 39 percent support, while over 65 percent of the voters gave the nod to rival Proposition 99, conceived specifically to counteract 98's draconian strictures.
But even with Prop. 98 dead and buried, manufactured-home owners still face hurdles in a seemingly inexorable drive by the MHP industry to sell as many asphalt lots as mobile-home park owners care to offer. Present state law provides fewer protections to manufactured-home owners than do many county and municipal ordinances. This is certainly the case in Sonoma County, where over 50 percent of a mobile-home park's resident owners must first opt to purchase what lies below them in order to convert, or, in the parlance that has emerged, condoize the entire park.
Now the fight to preserve low-income MHP rental space has shifted back to a municipality, in this case to Sonoma. On Wednesday, Aug. 20, the Sonoma City Council will vote on an ordinance that DiGiacomo claims will be "a tiny bit stronger" than the present Sonoma County protections. The ordinance is expected to pass, perhaps unanimously, but that doesn't mean DiGiacomo or the city of Sonoma are out of the woods yet.
L. Sue Loftin is a San Diego County–based attorney for Preston Cook, the owner of Rancho de Sonoma mobile-home park. Cook's park is situated just inside the city limits, and his intentions are clearly stated. "What I want to do with my park is make it a resident-owned community," he says, "so the residents of Rancho de Sonoma have an opportunity to own the land, instead of just their homes."
To realize his goal, Cook filed a claim on Aug. 6 against the moratorium on condo conversions. This claim appears to be the first step in a process that could lead to a lawsuit demanding big bucks from Sonoma, if, Loftin says, "we can't resolve the issues with the city."
Loftin says that Cook's conversion plans include $2 million in park renovations, affordable loans to low-income residents choosing to purchase and continued rent control for those who choose not to buy until such time as they either die or move away.
Meanwhile, the media have portrayed a divided MHP population, the majority of whom are over 55 years of age and living on fixed incomes. An ABC television report that aired last month, as well as articles in various regional newspapers, stress that there are mobile-home owners who either favor or will consider purchasing the property beneath their units.
DiGiacomo says there's no such rift. "It is notorious that they come up and try to disrupt the homeowners organization, and that is exactly what happened," he explains. "An ad hoc committee got together to unseat the current board and the current president—which never happened."
Close to 700 persons live in Sonoma's three mobile-home parks. Monthly rents range from $350 to $800. But, DiGiacomo says, "We have heard quotes that they'll charge upwards of $225,000 per space." Whether that figure is inflated or not, one thing is sure: by adding monthly condo fees to mortgage payments, this once affordable form of housing is, as Cook himself told the Sonoma Index-Tribune recently, "an endangered species. I would say there will be thousands of park closures in the next 10 to 20 years."
Saturday, July 19, 2008
Santa Rosa City Council Approves Zoning Change for Affordable Housing
The Oakmont opponents of a medium to high density development at the Elnoka site on Sonoma Highway turned out in full force on July 1... more than enough to pack every seat in the Santa Rosa city council chamber, plus several dozen on the balcony and some outside. Their purpose was to protest a rezoning to allow a higher density project on the site that would have about 30% of the units affordable to low and moderate income households. Speaker after speaker denounced the proposal and the audience responded with cheers and waiving arms. Some cited potential traffic impacts; some cited "incompatibility" with their neighborhood. Some were more blatant in their nimbie-ism.
Four of the six council members are running for election this fall and speakers pointedly reminded them that 93% of residents voted in the last election. It was looking grim.
Then Dick Latimer stepped up to the podium and talked about the shortage of affordable housing in Santa Rosa and how this site is one of the 20 designated for development at 18 units per acre "by right" as a result of HAG's housing element lawsuit in 2002, and the city should have rezoned it years ago. Then David Rosas approached the podium. He's running for city council and this would have been a golden opportunity for him to nab several hundred votes by siding with the Oakmonters. Instead, he said he lived in the Southwest quadrant of the city which has had 15 or so affordable housing developments. He pointed out that the area around the Elnoka site had only a few affordable developments, and that the city needs to have diversity in all its neighborhoods. He urged the council to approve the rezoning.
The crowd cheered briefly for Dick until the full realization of what he had said sank in, then there were loud jeers and shouts of "no...no." David's remarks were followed by glares and stony silence.
Both David and Dick showed amazing courage in speaking out in favor of the Elnoka rezoning in front of neighbors and all those voters. And to the utter amazement of the crowd, the developer and myself, the City Council went on to unanimously approve the rezoning... the PD will have more details, but probably won't mention the important role that David and Dick played in this. Thanks you guys!
Wednesday, June 25, 2008
Sac Bee Editorial: Speed up 1-C funding for affordable housing
Sacramento Bee Editorial: Speeding up grants for housing makes sense
June 25, 2008
Proposition 1C projects are ready, and the state's economy could use the stimulus
California's real housing problem has little to do with the mortgage meltdown. The real problem is the giant gap between incomes and housing costs.
While housing prices rose dramatically between 2000 and 2006, incomes did not. Yet sales volumes were at record levels and first-time buyers were entering the market in record numbers. Aggressive marketing of risky, high-cost, no-documentation mortgage loans allowed people to buy houses at prices way beyond what they could afford. That, in turn, kept prices going up and up.
But as everyone knows only too well, that bubble burst. So we're back to the basic problem: California is not producing housing that residents can afford.
Fortunately, when California voters approved five bonds in November 2006 to update the state's increasingly outdated infrastructure, one of those bonds (Proposition 1C) was targeted at increasing the overall supply and affordability of housing.
The state has scheduled three rounds of funding, for June 2008, June 2009 and June 2010. This year's round of project applications produced more strong applications than there was money to support them. So now the Department of Housing and Community Development is recommending that the amount of money in the first round be increased to allow the state to get a full complement of strong projects under way. Legislators should heed that suggestion.
At this time of economic downturn and high gas prices, increasing the supply of affordable housing in urban infill areas and near transit hubs will provide jobs, transportation options and housing close to jobs.
Assembly Bill 1252 is the vehicle. The Senate passed it 35-0 on Monday. The Assembly should do the same today.
For the 2008 round, legislators originally had allocated $240 million for infill infrastructure grants (for sewer, water, roads and so on). That money ran out after 27 projects, which received amounts based primarily on the number of housing units that will be produced and the affordability level of those units. The railyard project in Sacramento was one of two projects that received the maximum $30 million funding.
The department would like to fund 19 more grants for infill infrastructure and add more money to four already funded projects. The Triangle project in West Sacramento would be a beneficiary of the change. That project was originally awarded $16.7 million and would get $6.3 million more if AB 1252 passes. The Township 9 project in Sacramento would get $19.1 million. Broadway Lofts at 19th and Broadway in Sacramento would get $4.4 million.
For the 2008 round, legislators also had originally allocated $95 million for transit-oriented development grants. That money ran out after 11 projects. Again, The railyard in Sacramento was one of only two projects to win the maximum award of $17 million. The department would like to fund five more transit-oriented development grants and add more money to a project in San Diego.
While it will reduce the funding available in the 2009 and 2010 rounds, speeding up the grants is justified. These strong projects are ready, and the economy needs the stimulus. The Assembly should pass this bill and the governor should sign it into law without delay.
Gas prices getting you down? Search AOL Autos for fuel-efficient used cars.
Monday, June 23, 2008
New York Times June 23, 2008
Home Not-So-Sweet Home
"Owning a home lies at the heart of the American dream." So declared President Bush in 2002, introducing his "Homeownership Challenge" — a set of policy initiatives that were supposed to sharply increase homeownership, especially for minority groups.
Oops. While homeownership rose as the housing bubble inflated, temporarily giving Mr. Bush something to boast about, it plunged — especially for African-Americans — when the bubble popped. Today, the percentage of American families owning their own homes is no higher than it was six years ago, and it's a good bet that by the time Mr. Bush leaves the White House homeownership will be lower than it was when he moved in.
But here's a question rarely asked, at least in Washington: Why should ever-increasing homeownership be a policy goal? How many people should own homes, anyway?
Listening to politicians, you'd think that every family should own its home — in fact, that you're not a real American unless you're a homeowner. "If you own something," Mr. Bush once declared, "you have a vital stake in the future of our country." Presumably, then, citizens who live in rented housing, and therefore lack that "vital stake," can't be properly patriotic. Bring back property qualifications for voting!
Even Democrats seem to share the sense that Americans who don't own houses are second-class citizens. Early last year, just as the mortgage meltdown was beginning, Austan Goolsbee, a University of Chicago economist who is one of Barack Obama's top advisers, warned against a crackdown on subprime lending. "For be it ever so humble," he wrote, "there really is no place like home, even if it does come with a balloon payment mortgage."
And the belief that you're nothing if you don't own a home is reflected in U.S. policy. Because the I.R.S. lets you deduct mortgage interest from your taxable income but doesn't let you deduct rent, the federal tax system provides an enormous subsidy to owner-occupied housing. On top of that, government-sponsored enterprises — Fannie Mae, Freddie Mac and the Federal Home Loan Banks — provide cheap financing for home buyers; investors who want to provide rental housing are on their own.
In effect, U.S. policy is based on the premise that everyone should be a homeowner. But here's the thing: There are some real disadvantages to homeownership.
First of all, there's the financial risk. Although it's rarely put this way, borrowing to buy a home is like buying stocks on margin: if the market value of the house falls, the buyer can easily lose his or her entire stake.
This isn't a hypothetical worry. From 2005 through 2007 alone — that is, at the peak of the housing bubble — more than 22 million Americans bought either new or existing houses. Now that the bubble has burst, many of those homebuyers have lost heavily on their investment. At this point there are probably around 10 million households with negative home equity — that is, with mortgages that exceed the value of their houses.
Owning a home also ties workers down. Even in the best of times, the costs and hassle of selling one home and buying another — one estimate put the average cost of a house move at more than $60,000 — tend to make workers reluctant to go where the jobs are.
And these are not the best of times. Right now, economic distress is concentrated in the states with the biggest housing busts: Florida and California have experienced much steeper rises in unemployment than the nation as a whole. Yet homeowners in these states are constrained from seeking opportunities elsewhere, because it's very hard to sell their houses.
Finally, there's the cost of commuting. Buying a home usually though not always means buying a single-family house in the suburbs, often a long way out, where land is cheap. In an age of $4 gas and concerns about climate change, that's an increasingly problematic choice.
There are, of course, advantages to homeownership — and yes, my wife and I do own our home. But homeownership isn't for everyone. In fact, given the way U.S. policy favors owning over renting, you can make a good case that America already has too many homeowners.
O.K., I know how some people will respond: anyone who questions the ideal of homeownership must want the population "confined to Soviet-style concrete-block high-rises" (as a Bloomberg columnist recently put it). Um, no. All I'm suggesting is that we drop the obsession with ownership, and try to level the playing field that, at the moment, is hugely tilted against renting.
And while we're at it, let's try to open our minds to the possibility that those who choose to rent rather than buy can still share in the American dream — and still have a stake in the nation's future.
NY Times Op Ed: Home Not-So-Sweet Home
The holy grail of home ownership drives a whole range of public policies... transportation, land use, and taxes to name a few. Krugman points out that there are some serious downsides to this. -- David Grabill
Home Not-So-Sweet Home
Home Not-So-Sweet Home
"Owning a home lies at the heart of the American dream." So declared President Bush in 2002, introducing his "Homeownership Challenge" — a set of policy initiatives that were supposed to sharply increase homeownership, especially for minority groups.
Oops. While homeownership rose as the housing bubble inflated, temporarily giving Mr. Bush something to boast about, it plunged — especially for African-Americans — when the bubble popped. Today, the percentage of American families owning their own homes is no higher than it was six years ago, and it's a good bet that by the time Mr. Bush leaves the White House homeownership will be lower than it was when he moved in.
But here's a question rarely asked, at least in Washington: Why should ever-increasing homeownership be a policy goal? How many people should own homes, anyway?
Listening to politicians, you'd think that every family should own its home — in fact, that you're not a real American unless you're a homeowner. "If you own something," Mr. Bush once declared, "you have a vital stake in the future of our country." Presumably, then, citizens who live in rented housing, and therefore lack that "vital stake," can't be properly patriotic. Bring back property qualifications for voting!
Even Democrats seem to share the sense that Americans who don't own houses are second-class citizens. Early last year, just as the mortgage meltdown was beginning, Austan Goolsbee, a University of Chicago economist who is one of Barack Obama's top advisers, warned against a crackdown on subprime lending. "For be it ever so humble," he wrote, "there really is no place like home, even if it does come with a balloon payment mortgage."
And the belief that you're nothing if you don't own a home is reflected in U.S. policy. Because the I.R.S. lets you deduct mortgage interest from your taxable income but doesn't let you deduct rent, the federal tax system provides an enormous subsidy to owner-occupied housing. On top of that, government-sponsored enterprises — Fannie Mae, Freddie Mac and the Federal Home Loan Banks — provide cheap financing for home buyers; investors who want to provide rental housing are on their own.
In effect, U.S. policy is based on the premise that everyone should be a homeowner. But here's the thing: There are some real disadvantages to homeownership.
First of all, there's the financial risk. Although it's rarely put this way, borrowing to buy a home is like buying stocks on margin: if the market value of the house falls, the buyer can easily lose his or her entire stake.
This isn't a hypothetical worry. From 2005 through 2007 alone — that is, at the peak of the housing bubble — more than 22 million Americans bought either new or existing houses. Now that the bubble has burst, many of those homebuyers have lost heavily on their investment. At this point there are probably around 10 million households with negative home equity — that is, with mortgages that exceed the value of their houses.
Owning a home also ties workers down. Even in the best of times, the costs and hassle of selling one home and buying another — one estimate put the average cost of a house move at more than $60,000 — tend to make workers reluctant to go where the jobs are.
And these are not the best of times. Right now, economic distress is concentrated in the states with the biggest housing busts: Florida and California have experienced much steeper rises in unemployment than the nation as a whole. Yet homeowners in these states are constrained from seeking opportunities elsewhere, because it's very hard to sell their houses.
Finally, there's the cost of commuting. Buying a home usually though not always means buying a single-family house in the suburbs, often a long way out, where land is cheap. In an age of $4 gas and concerns about climate change, that's an increasingly problematic choice.
There are, of course, advantages to homeownership — and yes, my wife and I do own our home. But homeownership isn't for everyone. In fact, given the way U.S. policy favors owning over renting, you can make a good case that America already has too many homeowners.
O.K., I know how some people will respond: anyone who questions the ideal of homeownership must want the population "confined to Soviet-style concrete-block high-rises" (as a Bloomberg columnist recently put it). Um, no. All I'm suggesting is that we drop the obsession with ownership, and try to level the playing field that, at the moment, is hugely tilted against renting.
And while we're at it, let's try to open our minds to the possibility that those who choose to rent rather than buy can still share in the American dream — and still have a stake in the nation's future.
Tuesday, June 3, 2008
Op Ed - 40th Anniversary of the Fair Housing Act
IS LOCAL HOUSING REALLY "FAIR"?
SANTA ROSA PRESS DEMOCRAT, April 26, 2008
This month marks the 40th anniversary of the Fair Housing Act, which prohibits discrimination in the sale and rental of housing. President Lyndon B. Johnson signed the bill April 11, 1968, one week after the murder of Martin Luther King, and said "fair housing for all -- all human beings who live in this country -- is now a part of the American way of life."
The bill outlawed the common, open practice of denying housing and home loans based on race, and was later amended to ban discrimination based on religion, national origin, gender, age, disability and family status. So 40 years after the law was signed, do people in Sonoma County have equal housing opportunities? Overt discrimination is rare. Realtors and landlords are generally careful not to indicate discriminatory preferences. They face serious penalties if they violate the law.
But how does it happen that students in a few public schools in Santa Rosa are overwhelmingly Caucasian, while other schools are overwhelmingly non-white? Clearly a school's students reflect the characteristics of the neighborhoods the school serves, but how did those neighborhoods get to be mostly white or mostly non-white? The answer may be in the zoning code. One area -- Fountaingrove -- is dominated almost exclusively by large-lot expensive housing. Other areas of the city are zoned for high-density apartments. De facto segregation wasn't necessarily the goal of city officials who approved the zoning, but it's the result.
Another factor contributing to the racial disparity is the city's "inclusionary zoning ordinance," which actually operates to exclude affordable housing from new developments. Most cities in the county require developers to include some affordable housing in their projects, helping integrate neighborhoods. Developers in Santa Rosa are allowed pay an "in lieu fee" instead. The money is used to build affordable housing, but usually in neighborhoods which have lots of affordable housing.
Santa Rosa is not alone. Healdsburg is considering a proposal to build a 130-room luxury hotel and 70 elegant houses on 250 acres known as "Saggio Hills." The hotel will employ about 250 low-wage workers, and more will be employed as gardeners and maids in the fancy homes. The developer has offered to donate some land to the city which could be used for affordable housing at some future date, but the proposal does not include affordable housing for any of these workers. Nor is there housing affordable to them elsewhere in Healdsburg. So they'll have to commute from Santa Rosa or Ukiah.
The developer says the project will feature "green design." But color-wise, its residents will be mostly white. And any benefit from solar panels will be dwarfed by the huge environmental impact of hundreds of workers commuting on Highway 101.
A member of the Sonoma City Council recently objected to efforts to provide affordable housing which would serve farmworkers and other low-income, mostly non-white families. He derided it as "subsidized housing" and equated it to housing common in Eastern Europe. Nevermind that he and other wealthy homeowners get a huge housing subsidy -- in the form of mortgage interest tax deductions.
All of our city councils favor economic development. They want an abundance of workers, but they aren't ready to accept these workers -- who tend to be non-white -- as neighbors. Cities that welcome exclusive developments like Saggio Hills often have to be pushed to approve affordable housing developments which will be occupied mostly by non-white families.
But there are signs of hope. Petaluma has been more successful than most cities in encouraging diversity in its housing development. Affordable housing is integrated into single-family housing areas; schools have a good socio-economic balance. Can they do better? Of course. Can all of our cities do better, in order to make the promise of "equal housing opportunity" a reality for all persons regardless of race, national origin, disability, age, family status, religion and income source? Yes, and let's hope it doesn't take another 40 years.
David Grabill, Attorney with the Sonoma County Housing Advocacy Group
(www.hagster.org)
SANTA ROSA PRESS DEMOCRAT, April 26, 2008
This month marks the 40th anniversary of the Fair Housing Act, which prohibits discrimination in the sale and rental of housing. President Lyndon B. Johnson signed the bill April 11, 1968, one week after the murder of Martin Luther King, and said "fair housing for all -- all human beings who live in this country -- is now a part of the American way of life."
The bill outlawed the common, open practice of denying housing and home loans based on race, and was later amended to ban discrimination based on religion, national origin, gender, age, disability and family status. So 40 years after the law was signed, do people in Sonoma County have equal housing opportunities? Overt discrimination is rare. Realtors and landlords are generally careful not to indicate discriminatory preferences. They face serious penalties if they violate the law.
But how does it happen that students in a few public schools in Santa Rosa are overwhelmingly Caucasian, while other schools are overwhelmingly non-white? Clearly a school's students reflect the characteristics of the neighborhoods the school serves, but how did those neighborhoods get to be mostly white or mostly non-white? The answer may be in the zoning code. One area -- Fountaingrove -- is dominated almost exclusively by large-lot expensive housing. Other areas of the city are zoned for high-density apartments. De facto segregation wasn't necessarily the goal of city officials who approved the zoning, but it's the result.
Another factor contributing to the racial disparity is the city's "inclusionary zoning ordinance," which actually operates to exclude affordable housing from new developments. Most cities in the county require developers to include some affordable housing in their projects, helping integrate neighborhoods. Developers in Santa Rosa are allowed pay an "in lieu fee" instead. The money is used to build affordable housing, but usually in neighborhoods which have lots of affordable housing.
Santa Rosa is not alone. Healdsburg is considering a proposal to build a 130-room luxury hotel and 70 elegant houses on 250 acres known as "Saggio Hills." The hotel will employ about 250 low-wage workers, and more will be employed as gardeners and maids in the fancy homes. The developer has offered to donate some land to the city which could be used for affordable housing at some future date, but the proposal does not include affordable housing for any of these workers. Nor is there housing affordable to them elsewhere in Healdsburg. So they'll have to commute from Santa Rosa or Ukiah.
The developer says the project will feature "green design." But color-wise, its residents will be mostly white. And any benefit from solar panels will be dwarfed by the huge environmental impact of hundreds of workers commuting on Highway 101.
A member of the Sonoma City Council recently objected to efforts to provide affordable housing which would serve farmworkers and other low-income, mostly non-white families. He derided it as "subsidized housing" and equated it to housing common in Eastern Europe. Nevermind that he and other wealthy homeowners get a huge housing subsidy -- in the form of mortgage interest tax deductions.
All of our city councils favor economic development. They want an abundance of workers, but they aren't ready to accept these workers -- who tend to be non-white -- as neighbors. Cities that welcome exclusive developments like Saggio Hills often have to be pushed to approve affordable housing developments which will be occupied mostly by non-white families.
But there are signs of hope. Petaluma has been more successful than most cities in encouraging diversity in its housing development. Affordable housing is integrated into single-family housing areas; schools have a good socio-economic balance. Can they do better? Of course. Can all of our cities do better, in order to make the promise of "equal housing opportunity" a reality for all persons regardless of race, national origin, disability, age, family status, religion and income source? Yes, and let's hope it doesn't take another 40 years.
David Grabill, Attorney with the Sonoma County Housing Advocacy Group
(www.hagster.org)
Wednesday, May 14, 2008
Affordable Housing Progress Report
Our Affordable Housing Progress Report has summaries of how each of the cities in Sonoma County, as well as the unincorporated County, have progressed in meeting their affordable housing needs during the last planning period (1999-2007).
Saturday, May 3, 2008
No on 98 - Sample Letter
Please copy/paste this into an e-mail or letter and send it to as many friends and neighbors as possible urging them to vote NO on Prop 98 (but 99 is fine). Do it soon... absentee ballots for the election will be mailed out in a few days - DG
______________________
Dear Friend,
I'm emailing you today to make sure you are aware of a dangerous ballot measure on the June 3rd statewide ballot. Proposition 98 is a deceptive measure that a group of wealthy landlords spent millions to put on the ballot. These landlords want you to believe the measure is only about "eminent domain," but Prop. 98 is full of hidden provisions that would hurt all Californians.
• Prop. 98 attacks renters by eliminating renter protections and rent control.
• Prop. 98 guts important environmental protections like laws we need to combat global warming, and protect our land, air, water and coasts.
• Prop. 98 jeopardizes the quality of our drinking water and our ability to secure new water sources to protect our environment and fuel our economy.
• Prop. 98 will result in frivolous lawsuits, higher taxpayer costs, and hurt our economy.
That's why a broad coalition including AARP, League of Women Voters of California, the Coalition to Protect California Renters, California Professional Firefighters, California Alliance for Retired Americans, California Teachers Association, California Police Chiefs Association, California Chamber of Commerce and dozens of others all oppose Prop. 98.
Many of these same groups are also supporting a real eminent domain reform on the June 3rd ballot. Proposition 99 is the straightforward solution we need to protect against eminent domain abuse. Prop. 99 prohibits government from using eminent domain to take a home to transfer to a private developer. Unlike the landlords' Prop. 98, Prop. 99 is eminent domain reform with NO HIDDEN AGENDAS.
Please be sure you have the facts and vote NO on 98 and Yes on 99 on June 3rd
Visit http://www.no98yes99.com/ for more information.
Thank you!
______________________
Dear Friend,
I'm emailing you today to make sure you are aware of a dangerous ballot measure on the June 3rd statewide ballot. Proposition 98 is a deceptive measure that a group of wealthy landlords spent millions to put on the ballot. These landlords want you to believe the measure is only about "eminent domain," but Prop. 98 is full of hidden provisions that would hurt all Californians.
• Prop. 98 attacks renters by eliminating renter protections and rent control.
• Prop. 98 guts important environmental protections like laws we need to combat global warming, and protect our land, air, water and coasts.
• Prop. 98 jeopardizes the quality of our drinking water and our ability to secure new water sources to protect our environment and fuel our economy.
• Prop. 98 will result in frivolous lawsuits, higher taxpayer costs, and hurt our economy.
That's why a broad coalition including AARP, League of Women Voters of California, the Coalition to Protect California Renters, California Professional Firefighters, California Alliance for Retired Americans, California Teachers Association, California Police Chiefs Association, California Chamber of Commerce and dozens of others all oppose Prop. 98.
Many of these same groups are also supporting a real eminent domain reform on the June 3rd ballot. Proposition 99 is the straightforward solution we need to protect against eminent domain abuse. Prop. 99 prohibits government from using eminent domain to take a home to transfer to a private developer. Unlike the landlords' Prop. 98, Prop. 99 is eminent domain reform with NO HIDDEN AGENDAS.
Please be sure you have the facts and vote NO on 98 and Yes on 99 on June 3rd
Visit http://www.no98yes99.com/ for more information.
Thank you!
Wednesday, April 30, 2008
Affordable Housing - Green and Beautiful
This article, from the 4/3/2008 NYTimes, shows an affordable development in NY city that was built to the highest "green" building design standards. Construction costs were essentially the same as conventional buildings. - DG
Here's an article from the American Planning Association journal about the developer, Jonathan Rose: Click Here
Here's an article from the American Planning Association journal about the developer, Jonathan Rose: Click Here
Saturday, April 19, 2008
Escondido city council bans 4 bedroom condo's
The Escondido City Council recently voted to prohibit a developer from including some
4 bedroom units in his proposed condo complex, apparently concerned that some of
those beds might be occupied by (oh help us!) illegal immigrants. Here's an editorial
from the San Diego Union Tribune about the council's concerns... - dg
U-T EDITORIAL: NORTH EDITION
Big Brother in your (fourth) bedroom
Recently we opined on D.R. Horton wanting to offer four-bedroom townhouses at its Paramount project in downtown Escondido. The City Council was aghast, fearing apparently that illegal immigrants would start buying $400,000 condominiums or that families doubling up would result in the affluent buyers' BMWs taking up all the on-street parking spaces. The city asked Horton to return with none of those sinful four-bedroom floor plans. Horton, notorious for not speaking to either media or even city managers, cannot possibly make money on this project, some real estate observers believe. It bought the land at the height of the real estate boom, endured a catastrophic fire and more delays, and eventually will come to market when all prices have been pushed into the bargain basement. Horton, the observers say, simply wants to fulfill its civic obligation in Escondido, complete the project and move on. Horton did return to the council and acquiesced. The condominiums offered will still have four bedrooms, though one may be opened somewhat instead of having floor-to-ceiling walls. Buyers, to satisfy Big Brother Escondido, will have to sign that they will use the fourth room as a den, an office, anything but a bedroom. What's more, that provision will be written into the covenants, codes and restrictions for the complex. Presumably, any buyer of a four-bedroom townhouse would choose to use one as a den or office, anyway. So, no harm, no foul? Not so fast. Big Brother Escondido has now passed a law telling you what you can or cannot do in your own bedroom. It is no longer your choice. The vote was 5-0, with even Sam "I believe in the least government regulations on our citizens" Abed voting to interfere in a decision that really should be between willing builder and willing buyer. There was no mention of what the penalty for violators will be, which sends our imagination soaring. Perhaps, offenders will be deported just outside the Escondido city limits. Or, maybe they will be forced to register with other cities as "serial bedroom occupants." Escondido's council majority clearly is caught up in an anti-immigration backlash and is swinging at even imaginary targets. This ordinance outlaws a market product quite popular in a number of California cities. In its paranoia, the Escondido City Council is actually taking away freedoms from American citizens. This ordinance is both silly and sad. Sad in that this passes for "less government" in Escondido. Sad in that this restriction inevitably will pit some homeowner against a relentlessly rigid homeowner association. So much for harmonious quality of life in Escondido. Next Saturday: Big Brother Escondido in your overnight parking space.
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Friday, April 18, 2008
Wednesday, April 9, 2008
Tuesday, April 8, 2008
CALIFORNIA RENTAL MARKET FAILING TO MEET NEEDS OF WORKING FAMILIES
Average Two-bedroom Apartment
Washington, D.C. -- According to a report released yesterday, a family in California needs to earn at least $24.01/hour -- working 40 hours a week, 52 weeks a year -- to be able to afford rent and utilities in California's housing market. This represents an increase of 44.3% since 2000.
This year, California is the second-most-expensive state in the nation for renters. The typical renter in California earns $16.67, which is $7.34 short of what's needed to afford even a modest apartment.
Working at the minimum wage, a California family would need 3 wage earners working full-time -- or one full-time earner working 120 hours per week -- to afford a modest, two-bedroom apartment.
"Throughout the state, we are hearing stories of families who are becoming homeless because their paychecks aren't keeping pace with rental costs. The foreclosure crisis is further increasing pressure on the rental market, because families that were once homeowners are now competing alongside other renters to find an affordable place to live," said Julie Spezia, Executive Director of Housing California. "This report clearly illustrates why we need to build more apartment homes that working families can afford."
About 57% of California renters do not earn enough to afford a two-bedroom apartment in today's housing market.
The report, Out of Reach 2007-2008, was jointly released by the National Low Income Housing Coalition (NLIHC) -- a Washington, D.C.-based housing advocacy group -- and Housing California. The report provides housing expense and wage data for every state, metropolitan area, and county in the country. Nationally, a household needs to earn $17.32 to meet their basic needs for housing.
About Housing California
Housing California is the leading advocate in the state Capitol on affordable-home and budget policy for homeless and low-income people. We are a statewide coalition of more than 1,000 nonprofit developers, homeless-service organizations, and regional and local housing and homeless advocates. Our mission is to prevent homelessness and to increase the supply of decent, safe, accessible and permanently affordable homes for homeless and low-income Californians. For more information, visit www.housingca.org.
For additional information about the National Low Income Housing Coalition's Out of Reach 2007-2008 report, visit www.nlihc.org/oor/oor2008/.
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Wednesday, March 26, 2008
Infill development in San Rafael approved over NIMBY opposition
82-unit condo plan in San Rafael approved
Jennifer Upshaw - Marin Independent Journal 03/12/2008 01:00:14 AM PDT
A controversial plan to tear down an old office building and construct an 82-unit condominium complex near the Marin County Civic Center was approved in the wee hours after a long meeting of the San Rafael Planning Commission Tuesday.
Commissioners voted 4-2-1 to approve the project, with conditions related to frontage improvements, construction hours and pedestrian access, city officials said. Demolition of the existing office building is expected to begin next spring.
Commissioners Daniel Sonnet and Gayle Wittenmeier-Mills voted against the project, citing concerns about transitions with adjacent structures and the narrowness of the existing street. Commissioner Larry Paul was absent.
Tuesday's meeting drew dozens who spoke passionately both for and against the proposal at 33 San Pablo Ave.
Jenette Erven, a 23-year resident of San Pablo Avenue, said the building just doesn't fit the neighborhood.
"I feel this project has been put on a fast-track from the beginning," she said. "None of us are against affordable housing. What we are concerned about is the scope and the size of this project and the height and the density - it's huge."
Housing advocates, and community groups such as the League of Women Voters and the San Rafael Chamber of Commerce, lauded the endeavor as a prime example of responsible growth.
"Everyone says that infill is what we want," said Elissa Giambastiani, a 20-year housing advocate. "No one wants to build on open space. If we want infill, we're going to have to accommodate that in all sections of the city."
Concerns about height, mass and the number of units have delayed approval for some time. The project has been before the Design Review Board several times, and made a previous appearance before the Planning Commission.
City planners at one point recommended the proposal be rejected for aesthetic reasons. The plan was reworked, and the number of units reduced from 93 to 82.
Plans now call for a four-story complex with a stepped design. Sixteen units would be set aside as below-market-rate affordable housing. State law allows for a denser development if a certain amount of affordable housing is included in the project.
Jeff Hutchinson, project manager with San Rafael-based developer Monahan Pacific, said he believes his group has bent over backward to please the neighbors.
"What we've done is shoved the building up the hill and away from the neighbors as much as we can," he said. "We feel we've gone a long way to accommodate people's concerns here."
But neighbors disagreed, saying they felt they were being taken advantage of.
"I feel our neighborhood has been called upon over the years to carry a big burden for San Rafael and we've done our fair share," said Charles Cacciatore, a 14-year resident of Laurel Glen Terrace. "There's this arrogance that they (the developer) know what's better for our neighborhood than we do."
Friday, February 8, 2008
Affordable Housing Doubled at Old UC Site in SF
City and state officials announced an agreement Thursday with developers of the former UC Berkeley Extension site in San Francisco to include more affordable housing - more than doubling the number of such dwellings for the 413-unit project at 55 Laguna St.
While 66 of the 328 rental apartments for families had been designated as affordable, the new agreement makes an 85-unit complex for seniors - most of whom are expected to be gay, lesbian, bisexual or transgender - affordable as well. The units for seniors previously were to be rented at the market rate.
Supervisor Ross Mirkarimi, Assemblyman Mark Leno, state Sen. Carole Migden, the mayor's Office of Housing and gay rights and housing activists pushed to increase the percentage of affordable dwellings in the project from 16 percent to 37 percent. On Thursday, they celebrated the agreement with the University of California and A.F. Evans, the development company hired for the project.
Mirkarimi said Thursday at a news conference on the steps of City Hall that he had previously viewed the UC system as "an inflexible juggernaut" but was pleased that "patience and smartness prevailed."
"This is a major milestone," he said. "We have made critical progress."
Planning for the development has been going on since UC Extension moved out in late 2003, citing budgetary concerns.
In addition to the apartments, the development is also due to include a 25,000-square-foot park where the asphalt parking lot now sits and a 10,600-square-foot community garden. Both are intended to be accessible to the public, as is a planned 12,000-square-foot community center.
The city's Planning Commission was expected late Thursday to approve the environmental impact report for the development, another important step before the entire plan goes to the Board of Supervisors for approval.
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