Middle income fallacy for city R-S zoned housing projects
This article has been submitted to as a letter to the Planning Commission, in advance of its study session regarding the development proposal for 851-853 4th Street West. This is the hospital South Lot residential development, by DeNova Homes which at its south borders West MacArthur St.
The property is 2.7 acres. The area is designated Sonoma Residential or “R-S” zoned. R-S zoning usually applies to lots at least three acres in size. Max density is 22 units. 20 primary units are proposed, with eight accessory dwelling units (formerly known as cabins.) The eight accessory units are excluded from density calculations under state law.
Questions: why are the eight excluded? For a work-around to make more money? Could all 20 units, or possibly 22 units each have density-excluded accessory units? If so, why not get more? Are the accessory units deed protected from becoming vacation rentals? Are the accessory units also intended to meet affordable housing needs and if so, will they be rent stabilized?
R-S zoning has a number of provisions: “to ensure a variety of unit types and lot sizes”, and to, importantly here, “ensure a range of housing price and living opportunities for middle-income households.”
Observation: “middle income” can reasonably be assumed to be exactly the same as median income. The Area Median Income, or AMI, for a family of two, is $66,100. 60% AMI for a family of two is $39,660. 80% AMI for a family of two is $52,750. And 120% AMI for a family of two is $79,300. These figures are from the county Community Development Commission, 2016.
The median home price in Sonoma County is $670,000. Can middle class, middle income, median income people afford a mortgage for that? No way. If this project proposes to build 16 market rate units, eight with market rate accessory units, this will not conform to the required definition of R-S zoning.
Therefore, we have problem with General Plan definitions and the reality of what middle-income actually means. If this project is supposed to serve middle income people, then the units will have to be substantially less expensive than market rate, which is geared not to area median income people, or middle income earners, but to people who make substantially more and are not, by any current measure, “middle income.” The median home price, which a market rate project will serve and shoot for as a price point, is for upper-income earners, by all reasonable measures. This then, would not be R-S zoning.
The study session staff report says that R-S “units of different price ranges are mingled and not segregated.” According to my understanding of actual middle income households, this means that 60, 80, 100, 120, and 140% AMI units will be mingled together. Not that all market rate, high income houses will be mingled with four low and moderate income units that are small enough to be considered cabins.
The staff report goes on to say that the project conforms with the Community Development Element, to “promote higher density, infill development.” Very well, we need this.
The project also conforms with the Housing Element, Goal HE 1.0 by providing a mix of housing available to all income levels, allowing those who work here to live here.” HE Goal 1.1 “encourages diversity in type, size, price and tenure of residential development.” HE Goal 1.6 “utilizes inclusionary zoning to integrate affordable units within a market rate development.”
Comment: In this case, “affordable” happens to be about the exact same definition as “middle income.” The General Plan definitions being used here seem to have been outstripped by current economic circumstances. What may once have been a situation where “middle income” could afford market rate housing, this is no longer true in Sonoma. Yet, it is inescapable that the zoning is aimed at ensuring “a range of housing price and living opportunities for middle-income households.”
In order to be consistent then, this project will have to adjust to what is currently middle-income”, and to what is “a mix of housing available to all income levels.” If R-S zoning projects cannot be built by for-profit developers, to conform to what middle income currently means, then the city will have to draw a line, high income housing is not middle income housing. How does this discrepancy get addressed?
The study session packet goes on to refer to low and moderate income household units that will be built as inclusionary units. There will be four inclusionary units for this project, targeted at low and moderate income categories. By state law, one half of inclusionary units must be for low income, and one half for moderate income. Low and moderate income is now commonly seen to be 60% and 80% AMI respectively. The low-income units will be 800 square feet and the moderate at 1000 square feet.
As mentioned 80% AMI is also reasonably 80% of middle income. 100% AMI is middle income. So, for a household of two or more, at 60% and 80% AMI, they are going to live in an 800 or 1000 square foot “house?”
There is confusion here as to what moderate, median, middle, and affordable mean. This needs to be cleared up. In order to change the zoning, would there have to be an amendment to the General Plan or Development Code?
With the project as proposed, it is conceivable that four families will be living in 800 and 1000 square foot cabins, for say $800 – $1000 a month as inclusionary units, while the eight accessory units, at maybe 800 square feet, will rent for $2000 or more each. This is going to end up as 28 high income units peppered by four low income cabins. Is this really “providing a mix of housing available to all income levels, and allowing those who work here to live here?”
Suggestion. Redesign the project to have up to 20 accessory units, and have them be inclusionary and/or affordable units as well. Or, have a section of small units and a section of larger ones. If there were more inclusionary units at the cabin size level, maybe the developer could then get more luxury-level homes in there and make some money from more higher end units in the mix.
As it stands, there is a glut of market rate housing that is not serving the needs the of the community and more of it, from this project, without more mitigation to the median income population, is not serving the needs of the community
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