Council Preview for March 1 - Affordable Housing

Looks like we’re going to have to suffer through another City workshop. Apparently the City believes that what makes a workshop is the fact that the staff and Council members move down from their elevated seats to a similar seating a few yards away, and then conduct business as they normally do. It certainly doesn’t fit into any model of a “workshop” I ever attended in 30 plus years in academia and private practice.

Putting aside the structure, and hoping that this workshop doesn’t eventually deteriorate into another vitriolic shouting match between Council members, the topic for Tuesday is “affordable housing options”.

HISTORY

Recall that the City spent years in an affordable housing fiasco, losing more than a million dollars in the process, and ultimately giving away a property to a non-profit to operate, along with hundreds of thousands of dollars in repairs and re-settlement fees.

Recall also, that three of our council members (Voigts, Hamilton, and Robinson) refused to insist that developers build affordable housing onsite, and instead allow the developers to give the City “in lieu” fees which woefully under-represent how many affordable homes we end up with, and judging from how we’ve handled the past affordable housing options, is a sure money loser. But it’s a good deal for the developers, and since Voigts, Robinson, and Hamilton are funded by the developers, it’s a good deal for them.

According to the staff report, from 2014 to 2021 the City was slated to build 2,727 new units of which 24% were characterized as suitable for “very low” income families, 16% “low”, 18% “moderate”, and 42% “above moderate”. For a family of 4, these income levels in Lake Forest (where our median income is $87,200), are $48,150 (very low), $77,050 (low) and $104,650 (moderate). IOW - a family of 4 with an annual income of $77,050 or less would qualify for affordable housing.

CURRENT SITUATION

According to the staff report, we have the following affordable units in the City

• · 8 condos for transitional housing
• · 10 apartments and 1 condo for affordable housing
• · 209 affordable units located within 5 apartment complexes set to expoire beyond 2028
• · 38 affordable units set to expire in 2017
• · 187 units in Shea-Baker
• · 57 low income senior units in Portola South
• · 4 units on Saguaro owned by Families Forward

In 2014 there were 264 affordable units in Lake Forest and as the approved 248 are built and the 38 expire, we are looking at a total of 474 units. Given the City has 20,000+ units, that means about 2% of our total stock is classified as “affordable”.

IN LIEU FEES

According to the staff report, as of January 31, 2016 we had $1,938,000 available in the affordable housing fund and we are expecting $3,717,388 to come in, with a projected total amount of $6,080,388 to be spent.

The City recent spent about $1.5 million to create 4 affordable units. Using those numbers, our $6 million will produce 16 units. Had we required the developers to build affordable units onsite, assuming the 15% requirement, those 500 new homes built by Brookfield, Trumark, Baker Ranch, and Meritage would have created 75 affordable units (15% of 500). Instead of the 75 affordable units we could have had, with no extra trouble from the staff and no extra costs in staff and legal expenses, we will end up getting 16 units someday. It makes no financial sense to the City. But the financial sense it makes for developers is that they can make more profit by giving “in lieu” fees and not building affordable units on site, and with this extra profit they can afford to bank roll the campaigns of people who will vote to allow them to keep doing this.

SUPREME COURT DECISION

This sweet deal for developers and Council members who depend on developer money may have been dealt a blow by the Supreme Count decision that said it was discriminatory to concentrate affordable housing in certain areas while keeping them out of other areas. In this Texas case, the discrimination was racial, however, it could equally apply to other classes. Here in Lake Forest, the issue could also be looked at as racial, as the affordable housing in lieu fees when spent by the City will probably apply to areas with higher Hispanic concentrations even while the new homes are being built, without affordable units, in predominately white areas.

Justice Kennedy in his decision noted that

“These unlawful practices include zoning laws and other housing restrictions that function unfairly to exclude minorities from certain neighborhoods without any sufficient justification. Suits targeting such practices reside at the heartland of disparate-impact liability”

ABOUT THE AUTHOR

Dr. Jim Gardner is on the City Council for Lake Forest. You can check him out on LinkedIn and/or Facebook and you can share your thoughts about the City at Lake Forest Town Square on Facebook. His comments are not meant to reflect official City Policy.

Dr. Gardner has office hours every Tuesday from 4 pm to 6 pm at the City Hall. In addition, he holds a Town Hall meeting every quarter. The next meeting will be on March 26 at 2 pm at the Foothill Ranch Public Library.

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