The Board of Supervisors has reached a balanced and needed compromise with its amendments to Tuolumne County’s affordable housing rules.
To their credit, supervisors earlier this month resisted building industry pleas to totally scrap the two-year-old inclusionary ordinance or put it on indefinite hold. As originally adopted, the law requires developers of 10 or more lots to make 10 percent of the homes they build affordable by families earning the county’s median income or less.
Such homes now sell for about $220,000 each — down nearly $100,000 since 2005.
In a compromise championed by Supervisor Teri Murrison, the board voted to allow builders to pay the county an in-lieu fee for every unit sold rather than actually constructing the affordable homes. Previously extended only to those who could show a hardship, the fee option is now available to all developers.
Supervisors have also exempted the smallest builders — those dividing property into four lots or fewer — from any fees or building requirements.
The key here is that the inclusionary ordinance maintains its integrity.
Anyone developing five lots or more will pay a fee of $2,190 — one percent of the cost of an affordable home — for each building permit issued. For 100 homes, that’s more than $200,000 into the county’s affordable housing trust fund.
Also, exempting splits of four lots or fewer is unlikely to have much of an impact on revenue. Last year, for instance, about 20 Tuolumne County lots were created in splits of four or fewer and about 300 by larger subdivisions.
But for the small splitters themselves, the move will save about $2,000 per unit — a sum that could make a big difference for someone building their first home.
Pressures to abandon the inclusionary ordinance are understandable.
Development and construction, once major engines in Tuolumne County’s economy, are sputtering at best. Although reports that the economy is recovering are often in the news, here in the Mother Lode unemployment remains high (about 12 percent) and housing starts low.
Consider this: In 2005, at the height of the building boom, the county issued 415 residential building permits. By last year, that number had plummeted to 49, and this year just 36 have been issued to date.
Therefore it is no surprise that builders are looking for relief. It is also no surprise that they have targeted the county’s inclusionary ordinance, which has been unpopular with the development community since it was proposed nearly five years ago.
Early this year, the Building Industry Association asked that the rules be either scrapped or put on ice until the economy and building industry improve. Its leaders added that prices of existing homes have dropped so far that there is no longer a shortage of affordable homes.
But incomes and jobs have dropped with prices during the recession. Real estate sales are still low, and families below the median still need help.
Granted, the inclusionary ordinance to this point hasn’t helped much.
Deputy Planning Director Mike Laird said not a single affordable home has been built under the rules, and little cash is in the housing trust fund. Although some developers owe homes and cash under the rules, nothing is required until construction begins.
Scrapping the ordinance, however, would guarantee that nothing will be collected or even owed.
The board’s approach — make reasonable concessions to builders during tough times while at the same time keeping this well-thought-out ordinance intact — makes a lot more sense.