City to talk affordable housing

BY ERIC LINDBERG
DAILY SOUND STAFF WRITER

Possible changes to a city ordinance that could boost the number of affordable homes for middle-income families in Santa Barbara will be up for discussion at tomorrow’s City Council meeting.
City leaders will discuss whether to bring small subdivisions and housing projects into the fold of the Inclusionary Housing Ordinance, which currently requires projects of 10 or more units to sell 15 percent of those units at prices affordable to middle-income households.

“The pace of apartment-to-condominium conversions with fewer than 10 units seems to be heating up,” city staff said. “The current ordinance does nothing to help mitigate the impact of these projects on the demand for affordable middle-income housing.”
On the table tomorrow are recommendations from the Housing Policy Steering Committee and the Planning Commission, which developed the proposed alterations after a series of meetings and public hearings.
Among those recommendations is the application of the ordinance to any new project or condo conversion with two or more units, instead of the current threshold of 10 units. Since many smaller projects will not be able to provide a fraction of an affordable unit, staff also suggested creating a prorated fee system that will offset the requirement to provide affordable units.
Small projects will pay a percentage of an in-lieu fee depending on the number of units being built. Projects larger than 10 units that choose to pay the fee rather than build inclusionary units will be charged around $370,000 under the proposed changes.
“It should be set so that it is more cost-effective for the developers to build the required inclusionary units on site rather than pay the fee,” city staff said.
Also recommended is a change to the inclusionary percentages, or the amount of affordable units mandated to be built for each project. Rather than a flat 15 percent for all projects regardless of scope, a variable percentage based on location and number of units is suggested.
For example, a 3-unit project outside the Central Business District will only need to provide 5 percent of its housing as affordable, while a 15-unit project inside the district will have a 20 percent requirement.
Planning Commissioner George Myers expressed concern over the proposed fees — calling them an effective moratorium on small housing projects — and called for more time to see how the current ordinance works. Commissioner Addison Thompson echoed that thought, suggesting that no changes be made until the fact-finding portion of Plan Santa Barbara, an update of the city’s General Plan, is complete.
However, a majority of the commissioners seemed happy with the proposed changes, passing them on to the Council. Commissioner Bruce Bartlett stressed that the alterations are not a complete 180-degree turn, but more of a course correction intended to close loopholes.
The Planning Commission also discussed expanding the allowed uses of collected fees to include the purchase or subsidy of middle-income and upper-middle-income housing. Currently, the ordinance only allows for the use of in-lieu fees for development or rehabilitation of affordable housing for very-low, low and moderate-income families.
Other miscellaneous revisions include delaying the due date of in-lieu fees for small projects to lessen their financial impact. Also, in projects that include affordable housing for upper-middle-income families, staff recommends exempting those affordable units from the inclusionary requirement.