Housing options for low-income residents are narrowing in Sacramento.
Since 2015, 5,500 new housing units have received permits. But only 98 of these units were affordable for low-income residents, according to the Sacramento Bee.
The city used to require developers to set aside 15% of new units for low-income housing. But when construction starts began to decline, in 2015 local legislators eased off the old rule to encourage more building.
Now, some builders who skirt the old 15% rule are required to pay money into a nebulous fund for low-income housing. Other builders are exempt altogether, particularly those who are developing dense, infill housing.
The fund has so far raised $3.7 million from builders, far below what is needed to develop more low-income housing in the city. Instead, the stewards of the fund have been focusing on using the money to maintain existing low-income units.
Sacramento’s Mayor has proposed to fix the problem with a permanent sales tax increase, which would increase the city’s sales tax by 1%. The additional revenue would equal approximately $100 million each year and would be partially devoted to adding to the city’s low-income housing stock. The rest of the funds raised would go toward the general fund, shoring up essential services like libraries, parks and youth programs.
This tax increase — Measure U — will be decided by Sacramento residents on the November ballot.
Editor’s note — Due to the expiration in March 2019 of the previous Measure U, which was instated as a 0.5% tax increase to restore essential services to Sacramento following the 2008 recession, the essential long-term tax increase will be from the current 8.25% to 8.75%.
Developers resist the low-income housing push
The housing crisis occurring for low-income residents in California’s capital is a reflection of what is occurring across the state. Home prices and rents are rising rapidly, outpacing income increases.
As a result, low-income households are forced to find alternative housing by finding roommates, moving in with family members or moving further away from city and job centers. California’s homeless population has also increased rapidly in recent years, rising 14% in 2017 alone. All of this is bad for low-income residents, but it is also holding back economic growth.
first tuesday has long promoted the idea of graduated zoning changes to organically create more housing units. Instead of demanding a certain type of housing, this approach has local governments encouraging denser housing by amending zoning codes. When home inventory rises, prices and rents move closer in line with what buyers and renters are able to pay.
These changes take longer to emerge, but are the best long-term tool for local governments to promote more affordable housing.