The city of Half Moon Bay, like many other jurisdictions, continues to struggle to facilitate an affordable housing development. Problems include costs associated with attracting a project and the policies around affordable housing. 

It’s a familiar scenario across San Mateo County as reductions in federal and state funding have reduced investment in affordable housing by more than $31 million, or 78 percent, annually since 2008, according to the California Housing Partnership. 

“We just do not have anyone banging at the door trying to build affordable housing,” City Councilwoman Deborah Penrose said at a recent Half Moon Bay City Council meeting. 

While the city has a dedicated affordable housing fund of about $2.5 million, that won’t nearly cover the actual cost of a project. And City Council, along with staff, is in the process of drafting guidelines for how the funds should be used going forward. 

Community Development Director Jill Ekas explained the production of new affordable housing requires input from several sources. Ekas said the affordable housing fund can be spent to leverage other sources of funding, for land purchases or to go toward services for homeless prevention. 

“So, it is like seed money used early on in a project to leverage other opportunities,” Ekas said. “The fund is small and the need is big.”

The city is also in the process of reviewing a draft of its Local Coastal Land Use Plan Update, which has the potential for easing restrictions on portions of land to be used for housing. 

The City Council and staff are in the process of finalizing the guidelines on the use of affordable housing funds, something that Ekas envisions revisiting annually. 

 

High costs

Affordable housing is expensive and building it is often complicated. 

“Unlike market rate housing, affordable housing projects generally have to compile funding from multiple sources,” said Jordan Grimes, a housing and transportation advocate for the grassroots organization Peninsula for Everyone. 

Strong community support for a project can considerably speed things up, according to Grimes. However, when there is opposition, it can delay the timeline, making it “more and more unfeasible.” 

Grimes acknowledged there is a stigma around affordable housing as being a place where only poor people live, “… and the reality is that is not the case,” he said. 

Renters in San Mateo County need to earn $67.54 per hour to afford the median rent of $3,512, according to the California Housing Partnership. To keep up with the demand for housing, the county needs to build about 22,269 more affordable rental homes. 

“I think there is this misconception that somehow affordable housing developers are less efficient at building housing than our market rate counterparts,” said Bianca Neumann, the business development manager for MidPen Housing. “… That’s simply not true. We’re just asked to do a lot more,” she said.

Neumann is referring to the many requirements imposed on affordable housing development that is not expected of other market rate projects. 

“Affordable housing is not just about housing people. It’s about housing all of our additional values,” Neumann said. 

This means affordable housing projects must meet certain criteria, including constructing a sustainable and green building, fulfilling mandated parking requirements, paying workers a prevailing wage and making amendments to the overall design. 

This all requires additional funding. Just the cost of construction per unit is about $500,000 and that only refers to about 30 percent of the total cost of a project, according to Neumann.

“We need to promote public policies that recognize affordable housing as a community benefit,” Grimes said. 

 

State action

In California, there is legislation that could make an impact on the affordable housing crisis. This includes the passing of Assembly Bill 1482, which creates a rent cap for certain types of apartments. The bill is aimed at preventing price gouging by landlords and could extend protections to an estimated 8 million tenants, according to published news reports. Additionally, AB 1482 would give tenants “just cause” protections.

As a way to speed up construction of new housing, the Housing Crisis Act of 2019 or Senate Bill 330 was signed by the governor on Oct. 9. It will temporarily ban cities from imposing a moratorium on new housing construction, prohibit downsizing and prevent cities from failing to meet their state-mandated housing goals.

“California’s failure to build enough housing has resulted in the highest rents and home ownership costs in the nation and has deepened homelessness,” said the bill’s author state Sen. Nancy Skinner in a prepared statement. The new law will take effect Jan. 1, 2020 and sunset in 2025.

In years past, the state had a redevelopment program that allowed local governments to set aside property taxes and fund housing or other development. 

State Sen. Jim Beall, representing San Jose, authored Senate Bill 5 or “Redevelopment 2.0.” It would allow for local governments to set aside a portion of property taxes that would otherwise go toward public schools and use it to fund affordable housing, transit-oriented development and infill projects. Gov. Newsom signed into law 18 housing bills to promote housing production, but it is still too early to tell how these may apply to cities and counties on the Coastside.

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