Tuolumne County Community Development staff on Tuesday asked the county’s elected Board of Supervisors for guidance going forward on the county’s inclusionary housing ordinance, which provides incentives to housing developers who agree to provide 10% of completed units at affordable rates, like the Sierra Meadows subdivision off Jamestown Road.
Mike Lemke, of Lemke Homes, a former member of the county Housing Policy Committee, disbanded by the board in December, helped build the Sierra Meadows subdivision off Jamestown Road, approved by the county in March 2008, and its 45 homes include five that were built as affordable housing, which Lemke calls inclusionary homes.
Lemke and Ron Kopf, a development manager and consultant, spoke to the board and recommended doing away with the current terms of the ordinance.
Quincy Yaley, the county’s Community Development director, sought clarity from the elected supervisors.
“The inclusionary ordinance is one tool the county has to promote affordable housing,” Yaley said Tuesday afternoon. “The current ordinance is not yielding units at a pace that is helpful in our current housing crisis so it’s prudent to look for other solutions.”
The board ultimately voted 4-0, with one abstention, to have county staff include the evaluation of the inclusionary housing ordinance in a scope of work for the next update to the Housing Element of the General Plan, which is starting this year and will be adopted fall 2023, and to contact the California Department of Housing and Community Development to ask about modifying, suspending or revising the ordinance in the meantime.
District 2 Supervisor Ryan Campbell abstained because he was absent for public comment on the issue.
Sierra Meadows subdivision was relevant to the discussion Tuesday as an example of a project that requested exemptions to the ordinance code in its approval process, and in exchange for those exceptions, such as reduced setbacks and parking requirements, the project provided units that were sold as affordable housing, Yaley said Tuesday afternoon.
Concerns raised by developers 15 years since Sierra Meadows was approved include that given the difficulty of development being financially feasible, developers need exceptions in order to make a project work both physically and financially, Yaley said.
During public comment before the board voted on the issue, Lemke said, “In the big scheme of things, housing’s been a huge topic over the last many years. Nobody in this room is to blame for our housing situation, but I think we all share a responsibility to do something to improve it. I believe that Lemke Homes is one of the only builders to have actually built inclusionary homes in Tuolumne County.”
Lemke Homes built Sierra Meadows, and it’s there today, but unfortunately that effort today would not be feasible under current, standard conditions of approval, Lemke said.
“We wouldn’t be able to build that project,” Lemke said. “We’re often asked why it’s so difficult to build homes in Tuolumne County. Of course we have our topography issues. Density, incentives, general standard conditions of approval that get applied on projects. It’s extremely challenging. And that’s why we can see an endless stream of projects that look good, feel good, smell good, that get approved and then don’t really go anywhere, or if they do, more often than not, they end up failing and you see a second generation of folks come in to finish the project. That is not a healthy sign or report card for the housing industry in the local area.”
The inclusionary ordinance is well intended but fails to succeed in rural areas, Lemke said. It has an East Coast origin and is fundamentally geared towards communities that have a thriving, active housing industry. The win-win inclusionary concept was intended to increase housing density thereby lowering base costs of homes so that homes could be sold at a discount.
“For example a high-rise situation, or condominiums, or townhouse complexes, where it’s a building and you add three more floors to the building,” Lemke said. “Successful examples obviously are in the Bay Area, and the coastlines of Silicon Valley, and the governing corridor from the North Bay up to Sacramento. Those are areas where we’ve had these programs and they’ve been able to make use of incentives.”
Those areas have an $800,000 median house price, Lemke said, versus a rural example like Tuolumne County, with a constrained housing market, lower densities, and median prices of $400,000.
“Ironically the costs of two-by-fours, kitchen sinks, and windows are the same price here as they are in Silicon Valley,” Lemke said. “We love Tuolumne County.”
Lemke said the recommendation from ad hoc reviews and the Housing Policy Committee, are to return to a reduced in-lieu fee as previously adopted, for a minimum of five years and work toward a viable inclusionary rule incentive, and have a sunset termination if viable incentives have not been determined and adopted in that time frame.
“We think that’s reasonable, that’s fair, and it was previously approved by the state of California,” Lemke said.
Kopf reiterated that builders and developers hope the inclusionary ordinance can be done away with entirely, but in the meantime, he urged the county to at least go back to putting the reduced in-lieu fee in place with reduced impact for five years.
“Let’s figure out a way to make it as we move forward,” Kopf said.
Earlier, Yaley said an inclusionary housing ordinance can generate numerous benefits for communities looking to increase affordable housing and develop diverse, inclusive neighborhoods, and give people more choices or where they want to live.
According to Yaley’s staff, benefits of an inclusionary ordinance include:
• More choices for lower-income households about where to live.
• Reduced opposition to affordable housing by producing affordable units within communities as they develop, not after.
• Support for compact infill development, reduced sprawl and achievement of local Regional Housing Needs Assessment targets for all income levels.
• Reduced vehicle miles traveled and greenhouse gas emissions by providing more opportunities to live closer to work and in transit-rich areas.
• Reduced segregation and concentration of poverty.
In November 2013, the county Board of Supervisors voted to amend the county’s inclusionary housing ordinance by converting it from a mandatory to a voluntary, incentive-based system.
The ordinance was originally enacted by the Board of Supervisors in March 2008.
The inclusionary ordinance is voluntary and provides an array of incentives to a developer that agrees to: provide 10% of the units at affordable rates; or pay the in-lieu fee for all market rate units in the development; or provide alternatives that will result in affordable units or funds for the County Affordable Housing Trust Fund or a combination of affordable units and in-lieu fees.
“The board has provided direction to look at eliminating this ordinance in our next housing element update,” Yaley said Tuesday afternoon. “Staff will be looking at the inclusionary ordinance, its challenges, and other programs the county can engage in to support affordable housing.”
Contact Guy McCarthy at gmccarthy@uniondemocrat.net or (209) 770-0405. Follow him on Twitter at @GuyMcCarthy.