by Joy Silver
Throughout Northern California, we’re seeing the effect of the increased cost of living, as the city of Sacramento approved a maximum rental rate increase of 10% last year. For example, the average rent in Yolo County California is above the national average (46%) and in Davis, California, the average rent rate is $2,695, according to a Zillow Rental Manager report. These rising housing costs and related living expenses have made the demand for affordable housing accommodations critical.
Of course, the need for affordable housing is not unique to these aforementioned regions. Across California, 53% of renters are considered “rent burdened,” meaning they spend more than 30% of their household income on rent and utilities each month according to the American Community Survey.
Access to affordable housing is foundational to a family’s well-being in addition to the potential for educational attainment and financial security. For low-income families especially, affordable housing is a key difference-maker in lowering the risk of houselessness.
To help address the need for affordable housing, Governor Gavin Newsom recently signed legislation to streamline the housing approval process in California for low- and middle-income residents. The legislation enables affordable housing to be built in underutilized commercial sites currently zoned for retail, office and parking uses. While this legislation represents forward movement, developers will still need to undergo a three-to-five-year process of submitting their proposal to the city, receiving approval, and constructing the units before the first resident can move in. This lengthy process, known as pre-development, requires significant financial resources, with no guarantee the proposal will be awarded. Developers who do pass the proposal process must navigate additional bureaucratic challenges, such as zoning and permitting.
The Community Housing Opportunities Corporation (CHOC) has a number of affordable housing communities in the Davis, Yolo and Sacramento regions. To support working families, CHOC provides on-site tenant services, which are key to residents’ long-term self-sufficiency. Residents are offered free energy-saving services and installations that can save them up to 30% on energy bills. This initiative comes on the heels of the Sacramento City Council adopting an updated ordinance, which requires new buildings to run on electricity rather than gas.
The demand for affordable housing is not diminishing anytime soon, providing a significant opportunity for developers to devise innovative solutions which quickly increase the supply of quality affordable housing, therefore enhancing the surrounding community’s value. Our hope is that decision-makers at all levels—from construction and development to lawmaking—can collaborate to bring these needed developments to fruition so that working families and individuals have the opportunity to build their future.
Joy Silver is the Chief Strategy Officer for Community Housing Opportunities Corporation (CHOC), a non-profit, affordable housing developer. In her role, she aids the development of CHOC’s new and renovated communities, plans strategic initiatives and seeks new affordable housing opportunities. She also serves as a Housing Stability Collaborative Action Member for Lift To Rise, an organization “dedicated to a future where all Coachella Valley’s families have access to safe affordable and stable housing.” www.chochousing.com
CHOC is a great affordable housing organization. For many years I was on the board of directors of a local nonprofit organization that partnered with them on 2 affordable housing developments. The basic issue with nonprofits like CHOC is their relatively limited resources. The problem of unaffordable housing is so pervasive that nonprofits can only make small inroads into the issue. One of the drivers of unaffordable housing for decades has been the rise of NIMBYism. It’s basic economics that any high school graduate can readily understand, no college degree required.
It would be good for Davis if CHOC took over the Village Farms site and made it into one of their communities.
I doubt CHOC has the resources to develop a project the size and scope of Village Farms. Only for-profit developers have the money needed at their disposal.
IMO the problem with most of the approaches to affordable housing is that it relies either on forcing Developers to build inclusionary housing or relies on grants and outside sources to subsidize construction and maintenance. And other than affordable housing controlled by non-profits, usually affordable housing eventually gets added to the regular for profit housing stock in a community. There’s just too much value in residential real estate for affordable housing to remain affordable for long.
I believe the answer is local PUBLIC HOUSING. Now public housing to some of us “old heads” brings up visions of those 1960s and 70’s projects with concentrations of lower socio-economic people living together in big monolithic concrete buildings where poverty and crime became concentrated. But the key is integrating for profit public housing with subsidized private housing you can mitigate some of the negative socio-economic influences as well as have the housing mostly pay for itself. Local public housing would allow communities to also prioritize who gets what housing and why. So for instance you could house entry level police officers, fire fighters or city workers in workforce housing units along with very low income residents (maybe prioritize the current low income residents?) and market rate units all together.
For example, I read about a property near central Davis, near downtown that the DJUSD is considering what to do with. What if they developed it? It’s about 2 acres I think? I’m guessing they could get (and I’m guessing) 16 units/acre? So about 32 units. Make 17 affordable units: 12 workforce units for teachers and 5 for very low income residents and 15 market rate units. The 15 market rate units subsidize affordable units and possibly/eventually provide a profitable revenue stream for the school district. Heck, maybe they can squeeze some office space on the bottom of the building(s) to rent out too.
I guess my thesis is: if everybody else is making money off of real estate, why can’t the community/city do as well?
General housing can be affordable if there’s sufficient supply. That’s why so many families are moving to Texas. It’s explained almost entirely by housing price differentials.
Unfortunately, public housing has not worked well in the U.S. It would need a dramatic makeover before we could rely on that. It tends to collect the poor in one location and the community loses the resources it needs to thrive.
The school district could own and operate a teachers-only housing at the 5th and B location, but I believe it has to sell it if used for any other kind of housing.