Affordable Housing: Past, Present and Future

Sonoma County and its nine Cities have officially recognized the need for Affordable Housing but not all have fully endorsed the Regional Housing Needs Allocation or met earlier goals. Loh n ertjatLBegBo nse : D isagree, in part. The City endorsed its RHNA and has sought to meet its goals. The City does not control the pace of housing construction, but it has consistently provided available housing sites to enable the construction, required robust affordable housing programs to be implemented through Development Agreements, streamlined and expedited review of affordable housing projects and provided gap funding for housing projects. The City achieved its 5th cycle RHNA for low- and above moderate-income categories. Not all of the units in the very low- and moderate-income categories have been built, but significant progress has been made, and land is available. Deed-restricted moderate-income housing is particularly challenging to construct because tax credits, grants, loans and other funding sources are typically only available for the low- and very-low income categories. This lack financing for median to moderate-income housing is the primary challenge is a challenge for local agencies and developers seeking to construct deed-restricted, moderate income housing. F-|. There is great variability in the planning and approval processes and procedures for developing Affordable Housing in the County and its Cities, thus complicating and slowing development. Revised .lune 2022 Response to Grand Jury Response Form Rohnert Park Response: Disagree, in part. Rohnert Park acknowledges that there is variability between jurisdictions, but this alone does not necessarily complicate or slow development. The development of affordable housing is dependent on an extremely complex and at times unpredictable financing system that the County and cities do not control. The variability in procedures between jurisdictions is not a significant factor. ln the last RHNA cycle, Rohnert Park expedited the development review process for two affordable housing proposals that were ultimately not built because financing was not secured or neighborhood objections stalled the approval, clearly demonstrating that these issues is much more important than "variability in planning and approval processes" when it comes to making an affordable housing project successful.

Funding of Affordable Housing is often directed to specific groups such as seniors, veterans, or agricultural workers. Roh nert Park Response: Disagree. While some funding for affordable housing is directed to certain populations, many sources of funding are not overly prescriptive and are available to all applicants. ln addition, certain affordable housing funding sources, such as former redevelopment agency funds, specifically limit the amount of funding that can be directed to housing for senior citizens. The greatest challenge for financing affordable housing is the lack of sufficient funds overall and the competitive nature ofthe funds available.

Design review and project approval are often slow and very complex, and hinder the development of Affordable Housing. Roh nert Park Response: Disagree. As outlined in the response to Finding Fi , local agencies are very capable of streamlining processing for affordable housing projects and it is generally other factors that impede construction. The design review process is necessary to ensure that projects make a positive contribution to the community, which can enhance the overall acceptability ofthe project to the surrounding neighborhood. The process does not significantly add to the project timeline and experienced affordable housing developers generally present well-designed projects with attractive amenities, in part because funding agencies prioritize well- designed projects with amenities. lf a project is designed poorly it may not compete well for financing and can take longer to move through the building permit process, so any time saved in the entitlement process would be lost in the building approval process. A thorough entitlement process can identify any fatal flaws in the building and site design. Also, a poorly designed project can have significant public safety deficiencies with life safety implications built into the design from the beginning. A good design review process can identify problems early.

Mitigation fees vary by individual projects and jurisdictions, complicating the building of Affordable Housing. Rohnert Park Res onse: Disagree, in part. Mitigation fees do vary by individual projects, because infrastructure and service needs vary according to location. Mitigation fees are an extremely important tool for extending infrastructure to support annexation of property (which is listed in Finding 17 as another barrier to housing). The Grand Jury Revised l:uuite 2022 Response to Grand Jury Response Form cannot expect local agencies to undertake annexation without a means to assure adequate infrastructure is available to serve the newly annexed land.

Payment of in-lieu fees to the housing jurisdiction results in fewer inclusionary affordable housing units and houses being built. Roh nert Park Response: DisaBree, in part. Rohnert Park requires on-site affordable housing for all for-sale projects with more than 50 units. However, in-lieu fees are a valuable piece of the affordable housing financing puzzle because they provide local jurisdictions with funds to support housing projects, especially projects targeted to median -moderate income earners which don't generally qualify for tax credits, grants and other financing tools. ln fact, since the dissolution of redevelopment agencies in 2011, in-lieu fees are the only dedicated, locally-controlled funding source for affordable housing. ln-lieu fees also provide a tool for ensuring that non-residential development contributes to the construction of affordable housing that their employees often need. Rohnert Park has an Affordable Housing Linkage Fee (established by Rohnert Park Municipal Code Chapter 3.36) that ensures non-residential development contributes financially to the construction of affordable housing. Finally, until quite recently, case law (Polmer/Sixth Street Properties L.P. v. City of Los Angelesl effectively prohibited local agencies from requiring inclusionary units in rental projects, making affordable housing fees the only option to secure contributions to affordable housing from market-rate apartment projects. While the state has recently passed legislation to reverse this case law, the history helps explain why many local jurisdictions have pursued in-lieu fees as a piece of their overall strategy for providing affordable housing.

Development of commercial projects such as hotels and big box stores is often favored over housing due to lesser demand on public services and increased sales or occupancy tax revenue. Rohn ert Park Res se: Disagree, in part. The City agrees that commercial projects have tax revenue benefits, however these are not "favored" over housing projects. Development is guided by local agencies' General Plans which provide for a balanced blend of commercial and residential projects. A mixed-use environment is superior to monotonous single use areas, since the different land uses can be mutually supportive (i.e. housing provides customers for retail, retail provides jobs for housing residents, and the trip between the uses is short enough to walk). A mixed-use environment, with tax-generating use is also absolutely necessary to the health of the local agencies the help provide affordable housing. Even with the clear guidance provided by the General Plan, Rohnert Park is not averse to re-zoning property for housing. ln the last five years Rohnert Park has rezoned an industrial parcel to allow forthe creation of 135 housing units and commercial parcel to allow for the creation of 75 housing units. ln both cases, Rohnert Park's entitlement process included a development agreement that required 10% of the newly created housing units to be deed-restricted affordable units. hne2022 Revised Response to Grand Jury Response Form

Changes to city boundaries by annexation of land within their Spheres of lnfluence could allow the development of more Affordable Housing but is resisted due to the high costs of additional infrastructure. Roh nert Park Response: Disagree. Rohnert Park agrees that if developers are generally unwilling to contribute to the cost of the infrastructure that serves their development, this can be a limiting factor. However, infrastructure does not need to be a barrier to annexation, provided that adequate resources are available to provide that infrastructure. Tools like mitigation fees provide a method to ensure that projects are paying a "fair share" of infrastructure costs but not 100% of infrastructure costs, which can help make annexation and infrastructure extensions far more feasible from an economic perspective. Rohnert Park has completed successful annexation efforts including the University District Specific Plan Area and the Southeast Specific Plan Area. ln both cases, the project developers provided required affordable housing (15% of the overall project). lnfrastructure extensions were funded from reasonable and proportional mitigation fees and the developers received credit against mitigation fees due if they chose to construct required infrastructure. ln general, flexible, proportional, well-administered mitigation fee programs can be incentive to construct planned housing, including affordable housing.

lnclusive Affordable Housing must be equivalent to market rate units and be dispersed throughout a project making it harder to identify and stigmatize them. Roh nert Park Response: Disagree, in part. While Rohnert Park agrees that affordable housing should be well-designed and benefit from amenities, arbitrarily determining the distribution of affordable housing units would put an additional constraint on housing construction and potentially limit financing opportunities (tax credit financing and operational efficiencies favor projects of a certain scale). Rohnert Park has successful examples of both dispersed and concentrated affordable housing. ln the University District, a 218-unit affordable apartment development was constructed and satisfies the full inclusionary affordable housing project for the Vast Oak Development. lt is an attractive project that fits into the neighborhood and it competed well for tax credit financing. The Willowglen neighborhood is an example of a more dispersed affordable housing model. This project has a combination of affordable duets (two single family attached units) scattered amongst other homes, a small affordable apartment complex, and affordable townhomes. This model also provides a combination of ownership and rental units. The City does not believe that a one-size-fits-all approach to affordable housing is warranted and would only serve as an obstacle to the provision of needed housing. Response to Recom m en d ations:

F23. F24 I (we) disagree wholly or partially with the findings numbered: F3, F7, F9, FLo, tL2, F14, F15,