HomeMy WebLinkAbout2/22/2023 Item 4a, Price
From:Barry <
01 AM
To:E-mail Council Website
Subject:Comments on the Proposed Downtown Flexible Density Zoning Program
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Dear Mayor, Council, and Staff:
Thank you for the opportunity to review and comment on the City’s proposed Downtown Flexible Density zoning
program. I appreciate that the City is considering a variety of options to address the catastrophic situation we now face
with regards to housing availability and affordability. A recent New Times article (Feb 2-9, 2023) noted that the City is
“hopeful” the proposed flexible density program will create more affordable housing downtown. But hope is not a
strategy, and simply hoping that higher density downtown will bring down costs is counterproductive.
To achieve its aim, the flexible density program also needs concrete provisions that prevent developers from
leasing/selling to the highest bidder, who is often a corporate entity or venture capital group with nearly limitless
bundles of cash. To guarantee that these units are reserved for people who live and work in San Luis Obispo, and that
they won’t just be bought up and bid up by out of town second-homers, wealthy parents of Cal Poly undergrads, and
other speculators, the City should use deed restrictions to ensure that the properties are only sold or transferred to
individuals and not corporate entities, and that the units can only be sold to and occupied by local workers who earn no
more than the area median income (or some percentage thereof). A successful example of this type of development is
the Hopkins Village project in Placer County’s Martis Valley.
To further ensure that flexible density units are available to low-income workers, the City should also provide down-
payment assistance to credit-worthy homebuyers, especially Black homebuyers. There are more than 2,000 such
downpayment assistance programs across the country, many of them run by city, county, and state governments. There
are also public/private partnerships such as the Martis Fund Homebuyer Assistance Program. The City could also create
an Equitable Housing Finance Plan modeled after the federal HOME program.
To promote broad prosperity and economic opportunity for local workers, all projects authorized under the flexible
density plan also should be required to execute a Project Labor Agreement with robust local-hire provisions.
Sadly, market rate housing has never met the needs of a cities’ poorest and most vulnerable residents and on their own,
trickle-down, market-driven efforts such as the current proposal have been proven ineffective over and over again
because supply and demand dynamics always favor market forces, and developers can always find ways to constrain the
supply of low-cost housing since catering to high earners is simply more profitable. Such programs only work when a
municipality also takes broader steps to control prices and protect tenants. Among other tactics, such steps should
include housing investments, policy proscriptions, and increased taxation. In the following paragraphs I offer several
recommendations in this regard.
Investment
Develop subsidized public housing for working class families. Prevent displacement and homelessness by financing the
acquisition of naturally occurring affordable rental housing and preserving it as permanently affordable. Acquisition
preservation directly prevents low-income families from being displaced and potentially falling into homelessness, while
also expanding the supply of deed-restricted affordable homes for generations to come. The City could also invest CDBG
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funding in low- and moderate-income housing and reallocate other funds to provide rental subsidies for low-income and
very-low-income families.
Policy
Many cities across the country have enacted policies to preserve and protect their existing housing stock and apply
pressure to stabilize the housing market. Among the most popular of these are banning AirBNBs and other vacation
rentals in residential zones that don’t allow hotels; prohibiting the use of domestic housing stock as professional office
or retail space (especially with tens of thousands of square feet of commercial space currently vacant across town);
banning “renovictions;” and limiting the size of periodic rent increases. I strongly encourage the City to adopt a suite of
such policy proscriptions to increase housing supply, help stabilize the market, and promote tenant security. The City
should also add its voice to the effort to repeal the Costa-Hawkins Rental Housing Act of 1995.
The City could also enact a “right of first offer” policy to give tenants, the City, or a mission-driven non-profit a first
opportunity to purchase or match an offer on rental housing properties when owners elect to put them on the market.
The states of Colorado, Delaware, and Massachusetts have similar policies, and here in California Assemblymember Ash
Kalra has just introduced AB 919, the Stable Homes Act, to help keep families in their homes and preserve affordable
housing. The City should not wait for the state to act, however; several other cities including San Francisco and
Washington, D.C. have enacted similar policies and so should San Luis Obispo.
Taxation
Tax policy has long been used as a lever in the housing market. These policies typically benefit high earners, often
penalize low- and middle-income residents, and frequently exacerbate racial and class disparities. To begin reversing
years of such policy, the City should tax domiciles not occupied by owners at a substantially higher rate; tax residential
and commercial buildings that sit vacant at a substantially higher rate; and enact a transfer tax on high-end properties,
both residential and commercial. Revenues from the higher taxation rates should be used to fund public housing,
advance racial equity, promote upward mobility, and address the climate catastrophe.
While we provide incentives for developers, we can’t forget that the ultimate purpose of the proposed flexible density
program is to address the economic and social needs of the City’s residents and workers. To date policy makers have
favored market-rate development with only piecemeal and ineffective set-asides for lower earners. It is long past time
that our community takes more effective steps to increase housing supply, eliminate racial and class disparities, and
promote resilience and upward mobility.
Sincerely,
Barry Price
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