In the DJ’s March 27 article about Burlingame’s housing numbers, Mayor Brownrigg is quoted as saying he has “concerns around developments labeled as affordable housing raising rents to meet average median income standards — where 80% of the average median income for a family of four is already $158,000” [which will likely increase over time]. He’s further quoted: “it makes sense to require affordable housing developers to cap (AMI based) increases” and that “it is perfectly reasonable to hold a developer to whatever that rent is today at 80% AMI and not allow it to float up with AMI, and rather cap the increases over time.”
I strongly agree with the mayor. In my Feb. 20 Daily Journal guest perspective, I coined the phrase “affordability washing” based on the way cities calculate affordability levels. I posited that the affordability levels currently used by both the cities and the state are wildly out of sync with the reality of many true lower-income families and therefore mislead the general public to believe that truly affordable housing is really being built. It’s a deception that makes our public officials feel good, but it is a fiction. What we are labeling “affordable housing” in the Bay Area is not truly affordable (with a few exceptions) and is not meeting our continuing need to support true lower-income families ($30,000-$50,000 annual income) regionwide. A more realistic definition of affordability needs to be established.
Thanks for your letter, Mr. Crabbe, but changing the definition of affordability won’t do much, if anything. The root cause of “affordable” housing is not being addressed. “Affordable” housing (for any income level) cannot be built affordably and must be subsidized by either government and/or other buyers. We also need to reduce the costs of developing and building housing. How can builders make the numbers work out when builders must adhere to installing mandatory all electric appliances, mandatory electric chargers for folks who don’t own electric cars, low-water or no-water toilets, etc.? Builders aren’t going to throw in those “features” for free and will pass on the cost to homebuyers. I’d recommend a look at the Terner Center for Housing Innovation, UC Berkeley website, where you’ll see a number of research papers. Of note, and written several years ago, are papers on the cost of housing development in seven CA cities and residential impact fees in CA, among many other housing articles. It's safe to assume fees have gone up since then.
Folks can complain about affordable housing until the cows come home (and some have for several years) but government needs to make progress in reducing development costs and reducing or eliminating impact fees. We also need to reduce or eliminate nanny regulations and guidelines. If additional building mandates and fees continue to increase, nothing will change and it’ll only get worse.
I can agree with the first part of your comment, but impact fees ARE NOT HIGH ENOUGH. And the result is public works agencies facing 'hidden bankruptcy' because they don't monitor the current replacement cost of their aged assets and reserve funds accordingly. We began to solve this problem for unfunded pension liabilities with a GASB accounting change a decade ago. We need similar accounting standards for infrastructure assets, and impact fees to be based on the pro rata share of the current replacement costs of public works assets. Residential housing has long been a loss leader in land use. Failure to charge impact fees proportional to the infrastructure in place just means growth doesn't pay for itself - and pushes cities over the Fiscal Cliff. To further understand this issue read: "The Iceberg of Bay Area Public Works Deficits" https://shiftbayarea.substack.com/p/the-iceberg-of-bay-area-public-works , and follow the links to more detailed surveys of San Mateo public works agencies
Thanks for your response, gadieguez, but if you insist that impact fees are not high enough then you’ll only exacerbate the housing, affordable or not, problem. We can play around with numbers, such as changing the definition of affordability or making accounting changes/gimmicks, but the bottom line is that none of these things will change the economics of home building. Again, I recommend folks take a look at the numerous articles and reports from the Terner Center. Until costs, including impact fees, are addressed, we can debate the merits of your argument but they’ll have no effect on the cost of building.
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(3) comments
Thanks for your letter, Mr. Crabbe, but changing the definition of affordability won’t do much, if anything. The root cause of “affordable” housing is not being addressed. “Affordable” housing (for any income level) cannot be built affordably and must be subsidized by either government and/or other buyers. We also need to reduce the costs of developing and building housing. How can builders make the numbers work out when builders must adhere to installing mandatory all electric appliances, mandatory electric chargers for folks who don’t own electric cars, low-water or no-water toilets, etc.? Builders aren’t going to throw in those “features” for free and will pass on the cost to homebuyers. I’d recommend a look at the Terner Center for Housing Innovation, UC Berkeley website, where you’ll see a number of research papers. Of note, and written several years ago, are papers on the cost of housing development in seven CA cities and residential impact fees in CA, among many other housing articles. It's safe to assume fees have gone up since then.
Folks can complain about affordable housing until the cows come home (and some have for several years) but government needs to make progress in reducing development costs and reducing or eliminating impact fees. We also need to reduce or eliminate nanny regulations and guidelines. If additional building mandates and fees continue to increase, nothing will change and it’ll only get worse.
I can agree with the first part of your comment, but impact fees ARE NOT HIGH ENOUGH. And the result is public works agencies facing 'hidden bankruptcy' because they don't monitor the current replacement cost of their aged assets and reserve funds accordingly. We began to solve this problem for unfunded pension liabilities with a GASB accounting change a decade ago. We need similar accounting standards for infrastructure assets, and impact fees to be based on the pro rata share of the current replacement costs of public works assets. Residential housing has long been a loss leader in land use. Failure to charge impact fees proportional to the infrastructure in place just means growth doesn't pay for itself - and pushes cities over the Fiscal Cliff. To further understand this issue read: "The Iceberg of Bay Area Public Works Deficits" https://shiftbayarea.substack.com/p/the-iceberg-of-bay-area-public-works , and follow the links to more detailed surveys of San Mateo public works agencies
Thanks for your response, gadieguez, but if you insist that impact fees are not high enough then you’ll only exacerbate the housing, affordable or not, problem. We can play around with numbers, such as changing the definition of affordability or making accounting changes/gimmicks, but the bottom line is that none of these things will change the economics of home building. Again, I recommend folks take a look at the numerous articles and reports from the Terner Center. Until costs, including impact fees, are addressed, we can debate the merits of your argument but they’ll have no effect on the cost of building.
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Be truthful. Don't knowingly lie about anyone or anything.
Be proactive. Use the 'Report' link on each comment to let us know of abusive posts.
PLEASE TURN OFF YOUR CAPS LOCK.
Anyone violating these rules will be issued a warning. After the warning, comment privileges can be revoked.