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Healdsburg voters won’t be asked to loosen the city’s growth cap in November.

In an unexpected move, the City Council this week decided to jettison a proposed ballot measure to amend the growth management ordinance, which would have allowed more homes to be built over the next 15 years.

“Quite frankly, I just didn’t think the amendment does what the community really needs,” Mayor Jim Wood said Wednesday.

In effect, a majority of the council agreed it didn’t go far enough to help provide more housing in Healdsburg, which has some of the highest home prices in the county, second only to Sebastopol.

“We need the flexibility and ability to build more units — multifamily, rental units — in town and figure out a way to create more moderate-income, workforce housing for nurses, teachers, even doctors,” Wood said in an interview, adding that new companies coming to Healdsburg are finding it tough to house their employees.

“The rental market in our town is extremely tight and very expensive,” he said.

The proposed change to the growth management ordinance “doesn’t really get us to where we need to be,” agreed Councilman Gary Plass.

The amendment — if approved by voters — would have allowed developers to build up to 510 new dwelling units over 15 years. That compares to 450 allowed in the same period under the current voter-approved ordinance.

Councilman Tom Chambers was the only one against dropping it from the November ballot, saying it was a compromise that “seemed like something we could all live with.”

“I thought it was a reasonable plan. I thought people could understand what it was, and if it was put to a vote, it would pass,” he said Thursday.

The deadline to put the measure on the ballot was this week, but council members still want to revisit the issue next month to potentially start anew with a different revision to the growth ordinance for a future election.

The discussion comes as the town more than ever is viewed as a weekend and vacation destination, which drives up property prices as newcomers purchase second or even third homes. Planning consultants say it can cause a “squeezing out” effect, where longtime residents can no longer afford to stay in Healdsburg.

In the late 1990s, rapid residential growth and construction of subdivisions like Parkland Farms at the city’s north end spawned a voter initiative intended to preserve Healdsburg’s small-town character.

Voters in 2000 approved Measure M, the growth management ordinance that limits the number of building permits the city can issue to an average of 30 per year over three years, not to exceed a total of 90.

But some say it has become a high hurdle to providing housing for middle- income wage earners who do not qualify for traditional housing assistance programs and also may have trouble affording market-rate homes.

Despite the growth cap, allocations for dwelling units have not reached the limit, in part due to the prolonged recession. An average of 24 building permits have been issued annually since 2001 and most of the allocations were for small-scale, single-family developments, according to Healdsburg’s draft housing element.

The impetus for amending the growth management ordinance began several years ago as the city began to devise a plan to redevelop into a vibrant mixed-use district the gateway to central Healdsburg, which is now dominated by a lumberyard and an area around the train depot.

Planners said developers need to have the ability as the economy improves to build more residential dwellings for higher-density projects. But it’s tough to build larger multifamily projects under current growth management limits, because it requires them to be phased in over several years. And extending a larger project’s timeline increases the developer’s risk and makes it more challenging to obtain financing.

An eight-member committee that included Wood and Chambers held seven public meetings over six months in 2012 to hash out proposed changes to the existing ordinance, essentially trying to balance the need to build more housing without raising fears that it would open the door to rampant growth.

As proposed, the amended growth management ordinance would have started with a “bank” of 60 permits. Thirty additional permits were to be added to the bank each year. It allowed for more carryover of unused allocations, but for no more than 70 building permits to be issued each year.

There would have been a cap of 226 units in the central Healdsburg Avenue plan area.

After 15 years, the amendment would have expired and the growth management system would have reverted to the original Measure M.

It would have continued to exempt low-income and moderate “affordable” housing as defined by strict government income guidelines, but city officials say the money to subsidize those projects has dried up.

You can reach Staff Writer Clark Mason at 521-5214 or clark.mason@pressdemocrat.com.