Opinion: Workforce Housing – More or Less?

By Connie Conley |

At the March 27, 2013, Elk Grove City Council meeting, the city council voted to decrease the impact fees developers pay for "affordable" housing.  There has long been a stigma attached to that word “affordable,” and everything associated with it. 

 

We need to change our thinking.  It is “workforce” housing, in that in today’s economy a family of four with a median income of $50K per year qualifies for workforce housing.

 

The Elk Grove City Council has long been vocal proponents that they would like our city's residents to live, work, shop and play in Elk Grove.  That will keep our city “thriving!”  Everyone single one of them ran on that platform along with creating jobs, jobs, and more jobs. 

 

However, something is clearly out of whack here in that we are adding jobs in Elk Grove, but the majority of them are “workforce” salaried jobs.  For instance, the two new Walmarts, the soon to open DSW Shoes, and more fast food chain restaurants.  If these new employees to Elk Grove would like to live in the city in which they work, do we have housing for them? 

 

Presently in Elk Grove, we have 11 “workforce” apartment complexes which currently have a five percent vacancy rate.  And from the deliberation by the city council, they would like it to stay that way.  There are some, on the citizen side, who believe that eliminating, or reducing, impact fees altogether for workforce housing would be too costly as it is those same impact fees that fund our city’s infrastructure.

 

Furthermore, the city council continues to tout that we are very upside down in our jobs to housing ratio, and to make matters worse, our property values tanked over the last five years.  Now our residential home values have been creeping up ever so slowly.  Good for us homeowners, but not so good for workforce employees who still cannot afford to purchase a home.

 

So what’s the answer?  Can these same developers who just got their impact fees reduced help?  Will the Elk Grove City Council consider incentives and/or fee deferral programs to incentivize workforce housing developments?

 

At the council meeting, pulling out his phone calculator to redo the math, the argument to reduce impact fees on workforce housing was strongly advocated for by Council member Patrick Hume, whose family is a long-time home builder in Elk Grove and Galt.  And it appears that there is some data, in a study conducted a few years ago by U.S. Housing and Urban Development, to support Hume’s rationale:

 

“In California , there is some evidence that reducing impact fees for all types of housing can provide developers with the extra financial edge they need to make new construction profitable again in a market where housing construction has slowed to a crawl. Given the steep drop-off in the price of homes, this developer incentive has translated into an increased supply of housing that is more attainable. The increase in housing construction suggests that an across-the-board impact fee reduction can lead to the production of more housing units when compared to fee reductions targeted solely at affordable housing construction.”

 

Either way, in any community, most people would prefer to live, work and play in the city they call home.  And shouldn’t we, as a city, ensure that everyone who works here and wants to live in Elk Grove can afford a place to call home?

 

This is a conversation that must continue with all stakeholders coming to the table, as the current impact fees are in affect for one year.  Then what?