Napa’s Unrealistic Inclusionary Housing Ordinance: Part 1
There is little disagreement that Napa and the North Bay region needs more housing. All kinds of housing. We need affordable, workforce, middle-class, family and homeless shelter. Even the most ardent NIMBY knows we have to provide diverse and sustainable shelter for our very survival. Home builders know they must participate but Napa’s attempt to create affordable housing through restricted inclusionary ordinances are out of touch with reality.
The 1999 Inclusionary Housing Ordinance required a 10% of all units to remain affordable, for sale or rent.. https://www.cityofnapa.org/179/Affordable-Housing-Development#:~:text=In%201999%2C%20the%20City%20of,non%2Dresidential%20or%20commercial%20development.&text=Both%20residential%20and%20commercial%20developments%20now%20pay%20a%20fee. In 2009, State lawsuits established that arbitrary percentages were essentially rent control. Like many regional cities, Napa now collected fees for future affordable unit construction. However, now the city requires 15% of all housing units to be maintained affordable or to pay $4.05/SF for apartments and $4.75/SF for single family homes. This one-shoe-fits-all approach will not produce more affordable housing and illegality is still questionable. Napa needs to develop a better process. First of all, inclusionary housing is a form of cost and rent control. Some may call it a form of social engineering. Builders and developers didn’t create the problem. Each individual city created its own mess by restrictive zoning and imposing huge municipal fees on new construction. Secondary, builders don’t pay the inclusionary fees: the buyers and renters do. The additional cost is spread out over the market-rate units, upping the sales price or rent.
The imposition of fees on the building industry to solve problems they did not create is unjust and economically punitive. Ultimately, these inclusionary fees and percentages must be incentive-based to provide regulatory relief, speed up the process, reduce overall costs, and provide bonuses in order to build more housing. https://napavalleyregister.com/news/local/report-requiring-affordable-apartment-set-asides-in-napa-would-slow-housing-construction/article_2b83196d-6214-520e-95fa-fe64cd2dbd55.html
There are many ways to encourage developers to provide affordable housing, few of which are addressed in the present city ordinance. By fixating on two issues- fees paid by developers, or on-site ratios- it ignores the entire process of creating housing.
The single most important ingredient is flexibility. Any housing strategy must be imaginative and creative. Just as construction costs are volatile, financing, land costs, labor supply, and municipal fees must be considered to provide affordable housing.
History has shown that supply and reasonable market demand is the primary way to provide housing. Incentives are essential. Over the past 40 years our municipalities have done a great job of constraining the construction of new housing for our ever-growing population. We all knew California was going to grow, but, please, not in my backyard. We need housing policies and regulations that reflect the demographic link between the need for municipal and regional economic growth while providing affordable places to live.
These artificial controls, regulations, municipal fees which are charged for the municipalities past misjudgments, should all be re-examined. Inclusionary housing may be a requirement but if the goal is to provide more housing it must be incentivized to encourage and build housing efficacy, not stifle it.
Next week we’ll look at options on how to improve housing supply.
Chris d Craiker AIA/NCARB has been building award winning affordable housing for over 40 years.