Housing

By Philip P. Hannifin

San Luis Obispo's housing problem is not unique. There is a shortage of housing for lower, middle class, and middle upper class income levels. There is obviously more demand than there is supply. Also there is the issue of growth and overtaxing our resources and infrastructure. The housing gap is a difficult issue but there can be some innovative ways to help, starting with mixed use zoning and occupancies. Other opportunities exist to emulate communites that have faced the same challenges.

California as a whole is not industry friendly and the Central Coast is the last, best place. The housing gap is a difficult issue but there can be some innovative ways to help, starting with mixed use zoning and occupancies. High density housing with green belts buffering commercial areas from residential areas. Conversion of existing multi-story buildings to 1st floor commercial, and upper level residential with limited commerical hours of operation in mixed use areas. There may be an opportunity to zone specific areas as rent control districts and new residential developments that have caps on value so as not to exceed the ability of middle income ability to afford the homes.

Inclusionary housing laws should be fair to developers and the Council should allow for some flexibility and negotiation with builders and contractors when it is in the best interest of creating affordable workforce housing.

A healthy community requires an ageless community where there is a reasonable expectation to transition throughout ones life with an opportunity live and not be priced out of the community. By having capped housing costs at various income levels in specifically zoned areas, the sustainablity of our community can be maintained and there will be a work-force to help provide the services necessary for the community to thrive.

Community Land Trust

The problem of affordable housing affects everyone in the community. If the necessary workforce such as teachers, police, fire, and medical personnel, cannot afford homes, we will be significantly limited in our ability to attract well qualified service support personnel. Furthermore, companies have no incentive for relocating, expanding or starting up if there is no suitable housing for their respective workforces. Retirees are forced to stay in their homes that are now to large for them to manage and would like to downsize and cash out. There is no smaller retiree homes for them to move to and enjoy retirement.

Affordable workforce housing and retiree housing is possible when all the stakeholders come together to form a solution. Imposing regulations on developers only exacerbates the problem. Inclusionary housing ordinances actually price more people out of the market and benefit very few. One solution is to develop affordable home projects by :

Forming a community development land trust owned and operated by the city. Pass a bond issue to generate funds to buy land for development.

Build affordable communities on leasehold land that may be converted to fee simple at a later date. This drastically reduces the property costs for individuals since they will be purchasing only the structures and not the land. The city would retain ownership until fee simple conversion. In lieu of a land tax, a land use fee as determined by a Board of Trustees or the city council would be levied for maintenance and repairs to the utilities in addition to the normal and customary tax on the improvements (i.e., structures).

Call for competitive bids to build the communities. Builders would not have to purchase the land to develop properties. They would be able to build and sell homes at a reduced price since the overall cost of the land would be backed out.

Sell structures as leasehold property and convert the property to (fee simple) after a predetermined length of owner occupancy (i.e., 10 years) at the original market value. This discourages speculative real estate investment. The conversion offer may be exercised at any time the occupancy requirement has been met and the occupant must then occupy the residence for another pre-determined time (i.e., 3 years) prior to selling the fee simple property at fair market value. Proceeds from converting the leasehold to fee simple will be either placed into the general fund or into the trust fund at the city councils discretion. This helps to perpetuate an affordable housing fund for future developments or capital for repairs and improvements required elsewhere in the city.

Leasehold land and Fee simple conversions have been used in other communities for decades where land is scarce. (i.e., Hawaii). In a tough housing market with limited availability of land, creative solutions that require the cooperation of builders, bankers, land owners and our local politicians should be implemented. With cooperation within our community, we can have affordable housing for generations.

This is only one version of a Community Land Trust (CLT). There are over 100 CLTs formed throughout the US and in other countries. These CLTs were developed to help provide needed affordable housing and are working well. As with any new solution, we need to look to these communities and identify what will work best for San Luis Obispo.

Sincerely,

Philip P. Hannifin San Luis Obispo