Santa Rosa pledges $3 million to help developers speed new housing construction

Santa Rosa will spend up to $3 million to subsidize the construction of affordable housing projects in its boldest effort to date to address the city’s housing crisis.

The City Council on Tuesday approved a pilot program aimed at immediately boosting the construction of affordable housing units by making payments to developers of shovel-ready but otherwise “stymied” projects.

The infusion of cash is viewed as the most effective way for the city to help get worthwhile projects under construction in the short term while the city continues to work on its long-range “Housing for All” plan.

“We’re trying to incentivize a market-rate developer to provide affordable housing units in the city,” David Gouin, the director of Housing and Community Services, told the council.

In an effort to address its housing shortage, the city is already spending about ?$1.7 million this year on homeless services and another $800,000 reviewing and improving the efficiency of the permit approval process.

But the city hasn’t been able to reach its ambitious goal of approving 1,000 new building permits this year, and expects to approve about half that number by the end of the year.

Some of those projects face financial hurdles that the city says it might be willing to help with if they provide Santa Rosa the kind of affordable housing it needs right away.

City Manager Sean McGlynn said the question the city plans to ask developers is “Do you have a shovel-ready project that needs a little assistance to address our overall goal?”

Now that the program is approved, the city will invite developers to outline what type of housing they’d be able to deliver and how long those units would remain affordable and how much of a subsidy they would need from the city, Gouin explained.

The payments could be made directly in the form of funds to offset project fees or development costs. They also could come in the form of the purchase of affordable housing contracts.

Another option would be to extend contracts for existing affordable housing, though Councilwoman Julie Combs noted this last option would preserve current units, but not add to the city’s housing stock.

The city would ask for proposals to be made within 30 days. A council member would be involved in the selection process and the full council would still have to approve the selections, McGlynn said.

The program was approved with a warning from council members that the awards would be closely scrutinized. No specific housing projects were mentioned during the meeting.

“I think we all want the biggest bang for the public buck,” Councilman Gary Wysocky said. “I want us to be real critical of what we’re evaluating,”

The decision was the one definitive moment in what was an otherwise muddled discussion about prioritization of the various other housing related projects the city is working on.

A broader discussion of the city’s work plan to address its housing goals became mired in debates about which approaches deserved the most attention from city staff.

Some of the items that staff labeled top priority have earned council support. They included amending rules that govern housing density for individual projects, moves to streamline the design review process, and revisions to rules that govern second housing units.

But other ideas, such as asking voters to pass a general obligation bond to fund affordable housing didn’t strike some council members as top priorities given that no one expects to get such a bond to go to voters before 2018.

Another idea - amending the hillside development ordinance, stirred stiff opposition. Combs said she was surprised to see it topping the list and was “astounded” to see it was already being worked on by staff.

“Because I don’t’ anticipate that that’s a place that’s going to get us affordable housing units built in large numbers,” Combs said.

The city’s hillside development rules were enacted after huge homes built largely in the Fountaingrove area caused some residents to feel their hillside views had been marred by development.

But David Guhin, director of planning and economic development, said planners have been hearing for a long time that the rules have “unintended consequences” by forcing developers nowhere near hillside but whose properties contain some slopes greater than 10 percent to get permits that can take six months.

Mayor John Sawyer said he had heard from an affordable housing developer hoping to construct between 40 and 80 units who had been “challenged” because of “a little bump” on the property requiring additional approvals. “It was really not on a hillside,” Sawyer said.

In the end, McGlynn retracted the work plan, which had been proposed for approval. He said he understood the council’s frustration and would bring it back in a clearer form later.

You can reach Staff Writer Kevin McCallum at 521-5207 or kevin.mccallum@pressdemocrat.com. On Twitter @srcitybeat.