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Providing More Middle-Income Housing in Napa


Chris d Craiker AIA


Recently, the Napa City Council approved the 53-house subdivision on the former Vintage High School agricultural property that the school had surplused. All homes will be market-rate, and the developer is required to pay low-income housing fees upon permit issuance to the city Housing Authority for the creation of future low-income housing. A rough calx suggests that cumulative fee will be approximately $580,000. I must always remind folks that the developer doesn’t pay that: the new homeowner does as well as administrating and financing the housing fee.


Considering construction costs today, hook-up fees, land prices (this wasn’t a benevolent gift from the school) and financing costs, these houses will be in the million dollar and up range. Builders can't build smaller, cheaper houses since the basic core development costs remain pretty much the same regardless of square footage. So, it only makes sense to build larger square footage and ask for greater sales prices.


Make no mistake: I am not against this project or developers making a profit, but I must remind us that this does not create middle-income “affordable” housing. The vast majority of today’s households with even two incomes, say $70,000 -$100,000, can't afford any of these houses.


Reviewing the City ordinances, these fees are to be paid for, “Affordable housing impact fees……. shall be used to increase, improve, and preserve the supply of affordable units of housing serving the workforce and residents of the City.”


We all know that the rising interest rates have affected everyone, especially potential home buyers. Mortgage payments have jumped 50% or more, doubling in the past three years. The Pandemic and the initial inflation explosion have created almost impossible blockades for middle income home ownership. Napa County has seen the largest North Bay increase in monthly homeowner payments, up 111% from February 2020, based on data from California Association of Realtors and Freddie Mac. According to these sources, the average home mortgage is now $4978, up 19% from the previous year. If a buyer was able to place as little as 10% down and pledge 40% of their household incomes towards a new home mortgage, few can only afford a medium-income priced home in Lake or Solano County.….or Oregon. The higher- than-normal cost of living in Napa doesn't make it any easier. Not only do we have trouble filling jobs and finding workers for basic services, but the vast middle class also hoping to move up the housing ladder are stuck in rentals or living with their parents.


Most housing policies have typically focused on creating low-income housing or deregulating market rate housing. Between these two are essential workers, residence and those earning more than the threshold for low-income housing but will never likely be able to afford a reasonable market rate home mortgage. These are teachers, policepersons, caregivers, health care providers, and even tech workers.


Napa City and County should consider creating a financial model for housing development aimed at the middle-income workforce. This is not to reduce public resources for low-income housing but to create a public /private model aimed at individuals, young families, single parents and workers in ranges of $75,000 and up to $100,000 and with two income households. The Crescent housing project on Old Sonoma Road could be a model of the future by providing more affordable middle-income housing for sale, not just for rent. The objective is to get people into home ownership as soon as possible and not remain renters for the rest of their lives.


A new regional Bay Area Housing Finance Authority has been created with powers to create bonds for such purposes. It would put providing housing at low and moderate incomes middle incomes at the same level as other critical city infrastructure projects. BAHFA is a first-of-its-kind regional authority created to address the Bay Area’s chronic housing challenges and would require our Housing Authorities to partner with private developers to provide housing, most likely townhome or condominium style, but at prices that can be reached by a middle-income household. If possible, interest rates for home buyers could be subsidized by the bonds thus reducing the monthly burden for the household.


New State Law Could Have Big Ramifications on City Zoning Densities.


Sacramento has been pushing housing bills left and right and one little bill flew under the radar. AB 1287 gives new meaning to the 50-year-old State law that gives developers bonuses for building more low-income housing. The Density Bonus Law stipulates by dedicating more than the minimum number of units for affordability the developer could increase the project density above the maximum zoning allows. This stipulates that a builder developer agrees to dedicate more than the minimum required 10% of his units as affordable, he could be allowed a bonus of 20% more units. AB1287 makes a very small change by allowing developers to base their density calculations on a city’s General Plan which often reflects a high potential number rather than the city’s Zoning Ordinance which is generally lower. Now, a developer can use the General Plan potential density, rarely achieved, rather than the reduced densities of the Zoning. This may sound like peanuts, but this combined with two other state policies could increase a properties density and even its height requirements significantly. If a General Plan suggests a maximum density of 25 units to the acre, but the zoning says only 15 units to a specific parcel the project could receive a 40% increase in units, and then added to it the Density Bonus, and then added to it a little used requirement for converting portions of a project to ADU's allowing up to 25% of a density increase, could ramp up project densities drastically.


Would this happen in Napa? As property values increase and as demand continues to etch up, the prospect of these activities could become practical for a savvy developer in any city in the North Bay.


Chris d Craiker AIA /NCARB champions diversified and dignified housing at al economic levels

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