Marty: The affordable housing myth

Ted Thoeny stepped the podium at the board of supervisors
meeting and said,
”
Affordable housing is a myth,
”
in a soft voice.
 
Ted Thoeny stepped the podium at the board of supervisors meeting and said, “Affordable housing is a myth,” in a soft voice. 

In those few words, he summed up the issue that had sparked a three-hour discussion on fate of the county’s inclusionary housing ordinance. There had been passionate, reasoned and scholarly speeches. There were even one or two mildly angry outbursts, but in the end, that essential statement of truth overshadowed them all – affordable housing as currently conceived is a myth.

He went on to detail the cost of building a new single-family home with all the fees and charges included. His experience for a recent Salinas development came to $250 a square-foot. That equates to $275,000 for a mere 1,100 sq.-ft. excluding any profit for the builder. Inclusionary housing ordinances are not designed to build affordable housing; they merely try to get someone else to pay for it.

The ordinances require developers to either build some affordable units or pony up cash for others to build them. However, affordable units do not pay for themselves and developers do not own the printing presses at the U.S. Mint. They must pass these costs on to potential buyers to survive and when those costs do not ‘pencil-out’ development does not happen. 

The unseen pitfall is that the cost shifting drives the next income higher group out of the market. Think logically, if you raise the cost of a house by making the new buyers pay for the affordable housing, more people will be unable to afford it. Eventually they will need affordable housing themselves and that cost must be borne by the fewer buyers who remain and so on.  Inclusionary ordinances actually make housing less affordable for the middleclass.

This situation has spurred a strange “alliance” between two naturally opposing forces – those who build affordable housing using public finds and tax breaks and those opposing growth. They are, strangely, on the same side – they both support this approach for their own reasons and they both appear satisfied with the total lack of results.

The board of supervisors appears ready to suspend the county’s ordinance with a view towards eliminating it, but the opposition is fighting a delaying action. One tactic is to make a big deal out of the Environmental Impact Report, EIR. That’s just desperation, the presence or absence of an inclusionary housing ordinance has no environmental impact – none.

The ordinance neither approves nor rejects any development. Each proposal must stand on its own merits and each will have its own EIR. Each will go through the approval process where those who believe developers are the reincarnation of evil will continue to pick them apart and throw up roadblocks galore.

Planned communities of the type proposed by DMB are the answer to all of this – those communities have the proper balance between luxury, middleclass and high-density functional housing. To be successful we must follow a balanced approach, but that is not what happens now. Far too many county residents want all the affordable housing stuffed into Hollister and the city finds itself saddled with those expenses it cannot afford as the housing continues out of balance.

One issue that surfaced was a claim that that city and county employees cannot afford local housing.  If true, that’s certainly not the fault of the developers. So-called affordable housing has become the ultimate political football at the local level and just because it’s a myth does not mean that it won’t continue to be kicked around. Apparently, we have time to waste on programs that are proven failures.

Marty Richman is a Hollister resident. Reach him at

cw*****@ya***.com











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