SLO County places 3 year sunset clause on low-cost housing fees

March 14, 2019

The San Luis Obispo County Board of Supervisors voted 5-0 on Tuesday to amend the controversial Inclusionary Housing Ordinance and Affordable Housing Fund with a three-year sunset on inclusionary housing if other sources are developed to provide funding for low-cost housing. [Cal Coast Times]

Under the new rules, any home under 2,200 square feet is exempt from in-lieu fees, paid by developers that are then dedicated to low-cost housing. As part of the vote, the board also formalized the county’s CEQA guidelines in order to streamline the environmental review process and increase housing production in the county.

The money raised from inclusionary housing fees is given to nonprofit developers, such as Family Care Network and Habitat for Humanity, which build homes for people with low income. Nonprofit builders can leverage that money to obtain millions of dollars in federal and state housing funds. The county is seeking $2 million to $4 million a year in funding to support matching monies for grants.

Other forms of possible funding include a vacation rental fee, the cannabis tax, increasing the transient occupancy tax rate by 1 percent, a percentage of natural growth (a no-tax option), an affordable housing bond, and increasing sales and property tax rates. The board of supervisors plan to discuss the new funding options in about three months.

For years, supervisors Lynn Compton and Debbie Arnold have been in favor of a program aimed at providing more workforce housing by reducing fees and relaxing requirements, while Gibson and Hill have voted against it. At the same time, Hill and Gibson have promoted the Inclusionary Housing Ordinance, which requires developers to build homes that are sold at below-market prices or pay in-lieu fees, while Compton and Arnold have been opposed.

In the past, Gibson and Hill have said the inclusionary housing fees are necessary, and that nonprofit builders provide crucial services to the county. On the other side, Arnold and Compton argue that development fees drive up the cost of homes, making housing less affordable.

On Tuesday, supervisors John Peschong, Arnold, Compton, Hill, and Gibson were primarily in agreement with the changes made to the  Inclusionary Housing Ordinance, the Affordable Housing Fund, and county CEQA guidelines.

Inline Feedbacks
View all comments

What would be interesting is if the public “servant” pension plans were financially tied to real estate in California, then “somehow” the state was able to maintain a severe housing shortage throughout the state, driving up rents/sale prices and thus, increasing the “value” of the properties…

I also believe it would be interesting if the above coincidence would then help alleviate some of the massive unfunded liabilities with our massive public employee debt by way of investment in Public Employee Retirement Systems… but this is all just my theory. Something that nefarious would never be sought out, I’m sure.

I get so tired of this, the only thing Government can do to help is to back off! Reduce fees and permit costs for builders. Funds, rent controls, whatever, only allow employers to pay a less than living wage. If companies couldn’t get workers, they would have to raise salaries!

True, they would have to raise salaries (or wages, even). Also, they could just leave the area. Or the state. Or close down. So many options.

Rich people unanimously vote to make themselves richer. Film at 11

This, even though it sounds good, is just laying the groundwork for more and higher taxes for everyone. Fees, bonds and other ways of collecting funds are all a form of a tax that everyone ends up paying. Increasing the sales tax and property taxes alone are just another example of being the cause for homes not being affordable. At least they admitted, some call it an intervention with something, that they have been part of the cause for the high cost of housing. Housing will never be affordable in SLO. It’s just expensive to live there. I think a good study, to inform the BOS and all local city councils, by forming a group of builders/developers and actually reveal to everyone what the actual costs are to get a project approved prior to the start of construction. Then when you get any government funds in a project the costs double or even go higher than that. We see all the photo ops for the affordable 2 bedroom apartment units that everyone takes credit for, unfortunately their costs are usually around $350k per unit. Normal costs are around $125k per unit. I have known many people who have built affordable housing units for “non profits” and all have stated that they were some of the highest profit making projects they had ever been involved with. The answer? I don’t know but I do suggest that government get involved financially while suggesting that everyone get involved. And the process could certainly be expedited, as the old says says, “time is money.”

The two ideologies could not be better shown, supervisors Lynn Compton and Debbie Arnold want to reduce fees and relaxing requirements (getting government out of private industry) while Gibson and Hill want to order developers to build what Gibson and Hill want them to build. And they like to call President Trump a dictator!

I grew up in a very nice home, well kept by my mother. My three brothers and I were very happy. The house was about 900 square feet, three bedrooms and a single bath. I doubt today that anyone would consider this adequate. But from my point of view a 2200 square foot home. It may be time to rethink the definition of low income housing.

Finally but I didn’t see a guaranteed set amount posted .I would have built as many houses as I could that were affordable for last 25 years but the fees always made me shy away .25k to 80k in fees to build is crazy .If they would have done this 25 years ago and sold bonds to cover utility upgrades to municipal system .There would be a ton of affordable homes now

The argument that development impact fees add to the cost of housing is, and always has been, false. Housing will always sell for market value, unless it is subsidized. You could eliminate all fees for a $700,000 house and it will sell for, guess what, $700,000, with existing taxpayers subsidizing development costs and adding to the profit margin. Developers sell this snake oil to stupid, paid for, politicians with great success. Every new house in the City of SLO comes with a $100,000+ subsidy by water ratepayers for “affordability”. The idea that the market can be flooded by removing regulation is false. There are an unending supply of wealthy buyers looking to move here. So what is the answer to providing affordable housing? BAKERSFIELD! Can I drop anchor in Santa Barbara, Malibu, or Beverly Hills and DEMAND a house I can afford on $60,000/yr? No. Same economics apply here. We are no longer undiscovered. In 1970 you could buy a beachfront house in Cayucos for $30,000, that’s $2,000,000+ today for a tear-down.