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Home My WebLink About09-27-2017 PC Correspondence - Business Item 1 (Cooper)Arguments Against Providing Affordable Housing And/Or Implementing A Rent Control Program For Those Already Residing in San Luis Obispo, CA* City of San Luis Obispo Census https://www.census.gov/quickfacts/fact/table/sanluisobispocitycalifornia/HSG010216#viewtop Population 47,536 Housing Units 20,553 Owner-occupied 36.7% (7,543) Rentals 13,010 Median selected monthly owner costs with a mortgage $2,304.00 Median gross rent $1,284.00 Households 18,044 Persons per household 2.50 Median household income $46,058 Persons in poverty 33.4% (15,877)** Number of jobs in SLO 25,251 Number of residents employed in SLO 6,500 Percent persons under 18 years 12.2% Percent persons over 65+ years 12.0% (5,704) Percent persons working age 75.8% (36,032) Number of Cal Poly students 20,426 Percent of Cal Poly students living off campus 65% (13,277) Number of Cuesta College students North County 2,200 South County 8,819 Total estimated number of college students living in San Luis Obispo 22,096 Total estimated number of working age non-college students in SLO 13,936 Total estimated number of college & retired people in SLO 27,800 (compare to no. persons in “poverty”: 15,877) Total number households neither composed of students or retirees 7,894 data.com http://www.city-data.com/city/San-Luis-Obispo-California.html Total number households neither composed of students or retirees 7,894 Assumptions: 1) There is no evidence that any of the 7,894 households in the City of San Luis Obispo comprised of neither students nor retirees are at poverty level. Quite the opposite, the facts are that the City of San Luis Obispo’s poverty level population (15,877) is artiﬁcially high because 14,323 (or 90% of the total) is comprised of college age students while only 297 or 5.2% are comprised of retirees 65 years or older. My argument will be that neither the college students or the retirees living in the City of San Luis Obispo are ﬁnancially hurting to the point where the City needs to provide them with alternative, less costly housing. I am further arguing that based on the fact that 1/3 of the County-wide poverty level population is comprised of college-age students mostly living in the City of San Luis Obispo, the established quantiﬁed housing need allocation by income level calling for an additional very low (24.9%), low (15.6%) and moderate (17.6%) income housing units proposed to be built between Jan. 1, 2014 and June 30, 2019 (2,380 units) is far too high.*** 2) One may safely surmise that the 5,704 retired persons over the age of 65 living in the City of SLO (12% of SLO’s total population compared to 6.3% of SLO County’s total population) are mostly residing in one of the 7,543 owner-occupied units. Assuming 2.00 residents per household for the retirement population in the City of SLO, one can ﬁgure that 4,691 owner- occupied units are occupied by working-age residents. The total number of retirees over the age of 65 living in SLO County at the poverty level is 3,489 out of a total of 17,886 or 19.5%. The total number of retirees over the age of 65 living in the City of SLO at poverty level is 297 out of a total of 5,704 or 5.2%. Nationally the percentage of the population aged 65 and over is 14.5% (as compared to SLO County: 6.3%) and those living in poverty is 14.4% (as compared to SLO County: 19.5%). 3) There are currently 6,500 residents employed in SLO and assuming that there are 1.5 working residents per household, this would leave 358 owner-occupied households who are working-age but not working. 4) One might assume that the majority of retired persons living in the City of SLO have their mortgages paid off and that this number could be as high as 2,852 housing units. One might also assume that a majority of the retired persons 65 and older living in the City of SLO are living on Social Security (average annual income: $16,092) plus a government pension and this would place them well above the poverty level income bracket. As noted already, the City of SLO has a much higher percentage of its population 65 and older (12%) than the County (6.3%) and the City of SLO has a much lower poverty rate for those 65 and older (5.2%) than the County (19.5%). Mortgages are still owed on the remaining number of owner-occupied housing units (4,691 units) which have a median monthly cost (including mortgage) of $2,304.00. As stated already, the households income of those residing in these 4,691 units is probably not at the poverty level. 5) This would suggest that 10,173 of the 20,800 students living in SLO are earning a poverty level income (without reporting the income they’re receiving from their parents) and that the majority of these students are residing in one of the 13,010 rentals. If the median gross rent is $1,284 per month, then one can assume that at the rate of 3 students per housing unit, each student is paying a median $428 per month. 6) Using http://livingwage.mit.edu/counties/06079 one can surmise that each working student earns a poverty level wage of $5.00/hour x 173 hours = $865.00/month. This would leave $437.00 in living expenses. However average monthly living expenses in SLO for one person (excluding costs of education) is $1,309/month. This shortfall of $872.00/month would have to be covered by the student’s parents and/or by ﬁnancial aid and grants. Conclusion: This shortfall of $872.00/month for working students is not an onerous one for most parents sending their children through college. However, parents supporting a non-working child through college will be paying $26,073 per year excluding the costs of their education. Including tuition (for Cal Poly = $5,472) this could total $31,545. By the way, Cal Poly’s tuition is 20% cheaper than the national average and 75% cheaper than the California average. These costs exclude the fact that on average 59% of college students in San Luis Obispo receive $6,200 per year in ﬁnancial aid and 42% receive loans up to $7,100 per year. _____________________________ *The question remains: Are we obligated to provide affordable housing to the 18,751 SLO workers who do not reside in San Luis Obispo? There are many unanswered questions here. 1) What proportion of these workers prefer to reside outside SLO and there is nothing that can be done to alter their lifestyle choice? 2) What proportion of these workers can afford to live in San Luis Obispo but choose not to because of the lack of “suitable” housing? And what constitutes “suitable” housing? 3) What proportion of these workers ride mass transit or car pool into SLO from outlying communities and are therefore minimizing their carbon footprint? 4) Is it environmentally sound reasoning to “grow” the population of SLO to accommodate these non- resident workers if, as a result, this will place an unacceptable strain on our infrastructure? **College students living on their own off-campus are included in the Census “poverty universe.” Their poverty status is based on total personal income. https://www.policymap.com/ 2015/05/are-students-included-in-census-poverty-rates/ A city comparable to SLO regarding its artiﬁcially high poverty rate is Davis, California. Davis, California has a population of 65,622 which is comprised of an off-campus student population of 26,445. Its poverty level is comparable to ours (28.8% vs. our 33.4%) which is higher than the national average of 14.7%. Perhaps the only reason that their poverty level is lower than SLO’s is that their student population is made up of 6,734 postgraduates (vs. Cal Poly’s 881) who mostly live off campus and have the credentials to hold higher paying jobs or live with spouses who hold higher paying jobs. The average poverty level percentages for Atascadero, Arroyo Grande, Grover Beach Morro Bay, Pismo Beach and Paso Robles is 9.87%. Including SLO, the seven City average is skewed upwards to 12.96% because of the disproportionate number of college students residing in SLO (see: http://www.slocog.org/sites/default/ﬁles/ Regional%20Housing%20Needs%20Plan%20RHNP%20Final%20Jun_2013.pdf). Excluding college students, the seven City average poverty rate could even be lower than 9.87%. It should be noted that in 2015 the largest group living in poverty in SLO County is males between the ages of 18-24 (20.9% or 8,162) and females between the ages of 18-24 (15.8% or 6,161). In other words, more than 1/3 of SLO County’s population living in poverty are college age students. This artiﬁcially high County-wide poverty rate artiﬁcially increases the County-wide 5.5 year targets for very-low (24.9%), low (15.6%) and moderate (17.7%) income category housing units set by HCD. These percentages were derived from the 2006-2010 American Community Survey’s number of households by income, over 12 month periods. Housing unit need under each income category is derived from multiplying the portion of households per income category against the total RHNA determination (see: http:// www.hcd.ca.gov/community-development/housing-element/docs/ san_luis_obispo_cou5rhna062812.pdf). *** State housing law requires that each jurisdiction establish quantiﬁed objectives for their fair share of regional housing needs by income group. Each jurisdiction in California is required to plan for its fair share of the region’s housing need. This fair share is determined through a process called the Regional Housing Needs Allocation (RHNA). HCD identiﬁes the total housing need for each region of the State. Regional Councils of Government (e.eg., SACOG) are responsible for distributing this need to local governments in the region. Progress towards Meeting Quantiﬁed Objectives for the period of 01/01/14 to 6/30/19 requires that the City of SLO build 142 extremely low MFH, 143 very low MHF and 107 low MFH and 72 SFH housing units. These three groups are deﬁned as earning less than 30% median County income, 30-50% median County income and 51-80% median County income. The market demand for housing, especially in the very low, low and moderate ranges far exceeds supply. This is due to a number of factors including: the dominance of the tourism and agricultural sectors where many jobs provide relatively low pay; the disparity in the growth of housing costs and the growth in local income levels; the attractiveness of the area for retirement living and scarcity of coastal living environments with moderate climates; ongoing demand from beyond the local market that sustain relatively high housing costs in the region relative to other parts of the state and nation; and, resource capacity and other local service delivery system limitations that necessitate high development fees or increased utility costs. These factors impact all of the jurisdictions in varying degrees. Note the persons below poverty level ﬁgures, the homeownership rate and the housing units in multi-unit structures for the City of San Luis Obispo are skewed due to the large proportion of college students residing in the city. (see: http://www.slocity.org/home/showdocument?id=10775) AB 879 (Grayson). AB 879 would make certain changes to the law governing local governments’ housing element annual reports, including requiring reporting of housing development applications and units approved, as well as requiring expanded analysis of constraints on the production of housing. SB 35 (Wiener). SB 35 would create a streamlined, ministerial entitlement process for certain multi-family, urban inﬁll projects in jurisdictions that have not approved housing projects sufficient to meet their state-mandated Regional Housing Needs Allocation (“RHNA”). To qualify, projects must be consistent with objective planning and zoning standards, comply with prevailing wage requirements, and include an inclusionary housing component (10 percent in jurisdictions that have not approved housing projects sufficient to meet their RHNA for above-moderate income housing and 50 percent in jurisdictions that have not approved housing projects sufficient to meet their RHNA for below-moderate income housing). SB 35 would remain in effect until January 1, 2026. SEC. 3. Section 65913.4 is added to the Government Code, to read: 65913.4. (a) A development proponent may submit an application for a development that is subject to the streamlined, ministerial approval process provided by subdivision (b) and not subject to a conditional use permit if the development satisﬁes all of the following objective planning standards: (4) The development satisﬁes both of the following: (B) The development is subject to a requirement mandating a minimum percentage of below market rate housing based on one of the following: (ii) The locality did not submit its latest production report to the department by the time period required by Section 65400, or that production report reﬂects that there were fewer units of housing affordable to households making below 80 percent of the area median income that were issued building permits than were required for the regional housing needs assessment cycle for that reporting period, and the project seeking approval dedicates 50 percent of the total number of units to housing affordable to households making below 80 percent of the area median income, unless the locality has adopted a local ordinance that requires that greater than 50 percent of the units be dedicated to housing affordable to households making below 80 percent of the area median income, in which case that ordinance applies. General Plan Annual Report 2015 22 Table 7- Progress towards Meeting Quantified Objectives (01/01/14 to 6/30/19) Income Category (% of County Median Income) Regional Housing Need Allocation SFH QO2 SFH Built1 MFH QO2 MFH Built1 Total QO Total Built1 Extremely Low (< 30%) 0 0 142 0 142 0 Very Low (30-50%) 0 0 143 1 143 1 Low (51-80%) 72 0 107 24 179 24 Moderate (81-120%) 81 0 121 8 202 8 Above Moderate (> 120%) 191 95 287 59 478 154 TOTAL UNITS 344 95 800 92 1,144 187 Source: 2015 Housing Element, City of San Luis Obispo, Community Development Department 1 Reflects net units constructed 01/01/14 thru 6/30/19. 2 Reflects Quantified Objectives for each category The City’s most recent Housing Element was adopted in January 2015, with a planning period from January 1, 2014 through June 30, 2019. As shown in Table 7, above, 33 housing units, or about 18 percent of all housing units added in the City since 2014 were affordable to extremely- low, very-low, low and moderate income households. In its first two years (2014-2015), the City is at 16 percent of achieving its Quantified Objectives for housing through 2019. Achieving the quantified objective is not a requirement, yet it is a way to measure how effective the City has been in terms of housing programs and policies to advance the construction of affordable housing. It should be noted, however, that market conditions and the financing environment are the primary drivers that determine the production of affordable housing. Affordable Housing The City’s Housing Programs Manager (HPM) focuses on affordable housing development and other important General Plan Housing Element goals. The HPM serves on the Board of Directors for the Workforce Housing Coalition, the Funding Commission for the SLO County Housing Trust Fund, and contributes to the work of the Homeless Services Oversight Council. These efforts contribute to an improved environment for planning and development of affordable housing in the City of San Luis Obispo. In 2015, the City entered into Affordable Housing Agreements for 31 affordable units (1 very- low, 10 low, and 20 moderate income) through long-term and equity-share affordability agreements pursuant to the City’s Inclusionary Housing Requirement. Over $500,000 in affordable housing in-lieu fees were collected.