Another View: Affordable housing is crucial community need

By: Wayne Nader / Guest Columnist
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The cost of housing nationally has gone up 48 percent since it bottomed out in 2010. Salaries, however, have only gone up 14 percent in that same period of time. 
Regionally the increase in housing prices and rents has been substantially higher than the national average. If you have been in your home for over eight years, during the last two years you have experienced a tremendous increase in the value of your home. 
Sadly, these skyrocketing values in home prices coupled with out-of-control increases in housing construction costs have left the younger generations and those in the lower income levels struggling to find affordable places to live.
For those who have lived in the area for some time, it would be easy to say “this is not my problem.” From my perspective, it is a problem we all should share. 
A healthy society has a balanced social and economic environment where opportunities exist for up and coming generations to experience the chance to own a home that they can afford. Unfortunately, in California in particular, this part of the “American Dream” has become unattainable for them.
The state legislature has been passing laws in an attempt to address this issue. At the same time, lawmakers are also doing counter efforts that make the cost of new housing rise significantly through excessive energy and environmental requirements. The hurdles to providing affordable/workforce housing are getting higher.
Can we do something locally to effectively address this important issue? The answer is “yes.”  We first need to change the way new residential projects are allowed to skirt around providing meaningful affordable housing. 
Let me first define who qualifies for affordable housing.  
The median pre-tax income in Placer County is $75,200. To be considered a low income household, a family would have to make 50 percent or less of the median income ($37,600 or lower). The maximum amount recommended going toward a mortgage or rent is 30 percent of income, which for this group would be $940 a month toward housing. If used for a mortgage at a 5 percent interest rate, it would support a $175,000 loan. A 20 percent down payment is normally required, so $218,000 would be the top possible purchase price. Most new starter homes in the area are in the $400,000-plus range.   
A project in western unincorporated Placer County is coming before the planning commission in July. It is a 308-lot subdivision. The county requires that 10 percent be deed-restricted low-income housing, which equates to 31 homes. Taking the $218,000 per house, the total for the 31 homes would come to $6,758,000. 
The county currently allows the developer to opt out of building the affordable homes through an in-lieu fee of $4,342 per residential building permit, which for this project would come out to $1,337,336. 
No wonder developers are quick to take the in-lieu fee route. The county isn’t even getting 20 percent of what the cost would have been to building these affordable homes. On top of that, when you consider that any project that those now county funds go to must be done at prevailing wage levels, it results in even less getting accomplished versus what private enterprise could do.
For larger projects, the City of Roseville requires that 10 percent of the homes be affordable and there is no in-lieu payment option.
It is time for the county and the other cities in Placer County to adopt the same policy. Yes, this does mean that the other homes in the project will cost a bit more to help shoulder the real cost to develop and construct an affordable home, but this is clearly an investment towards the future viability of our communities.
Wayne Nader is a retired bank executive and current chair of the Placer County Planning Commission.