Santa Rosa ponders spending some PG&E settlement funds on housing

Santa Rosa is considering teaming up with the County of Sonoma to create a $20 million housing fund, using $10 million from its $95 million PG&E settlement to match a contribution from the county.

The concept, one of many under consideration by the City Council as it mulls alternative proposals to spend the PG&E windfall, was the focus of a staff presentation Tuesday requested by Councilman Jack Tibbetts.

Under the proposal, the city would place almost 10% of its PG&E settlement dollars in the Renewal Enterprise District, which the city and county created in December 2018 to speed up the construction of new homes.

It is unclear, however, whether a majority of the council supports the plan. Council members are waiting to stake out positions on how the city should spend the $95 million, which the city received as part of PG&E’s $1 billion settlement with local governments over 2017 and 2018 wildfires, notably including the October 2017 Tubbs fire.

Tibbetts has been the most vocal proponent of spending a portion of the settlement on housing projects to prevent an “exodus” of residents fleeing Santa Rosa’s high cost of living. He acknowledged he has struggled to balance the goal of repairing public infrastructure, such as damaged streets and sidewalks in Fountaingrove and Coffey Park, against the goal of creating new homes.

“While the sidewalks are certainly important, I think that what makes a neighborhood is not a sidewalk, it’s the people who live in that neighborhood," Tibbetts said, adding, ”I’m watching a lot of people leave Santa Rosa right now — more than ever.“

The city’s housing need is not unique in California, where many cities and counties struggle to foster the creation of affordable places to live in sufficient supplies. While Santa Rosa has endeavored to become a more developer-friendly city, it is falling far short of meeting its housing production targets set by the state.

A little more than 300 new homes annually have been built in Santa Rosa since 2012, but the city needs more than triple that figure to meet its state-determined housing target, said Clare Hartman, an interim assistant city manager who has focused on planning and development.

“We’re fairly deficient in meeting our housing needs,” Hartman said, noting that its state-mandated housing production goal is likely to go up 30% when the state reassesses housing needs in the next few years. The county’s target is expected to “exponentially” increase, Hartman said.

“It means there’s going to be a lot of pressure to build housing outside city limits, and that’s an opportunity to work with the county to place those units in a more appropriate location,” Hartman said.

If Santa Rosa decides to put $10 million toward the Renewal Enterprise District, its contribution would trigger a match from Sonoma County. In October, the Board of Supervisors decided to put $10 million of its own PG&E settlement funds toward housing via the district, contingent on the city doing the same.

The money would be lent to developers, helping them piece together the financing needed to proceed with construction, said Michelle Whitman, executive director of the joint county-city district.

“Developer math is really the problem we’re looking to solve for with this new housing fund,” Whitman said.

The city will separately disburse roughly $38 million in federal disaster recovery money for the construction of affordable apartments. Those long-awaited dollars were awarded by the Federal Emergency Management Agency due to the Tubbs fire’s impact on Santa Rosa, which lost about 5% of its housing stock in the 2017 wildfire.

The city also is considering spending tens of millions to rebuild the Fountaingrove fire station and damaged streets and sidewalks. It may also sock away some of the settlement funds to bolster its financial reserves.

In a survey conducted by the city earlier this year to get public input on how to spend the PG&E funds, vegetation management and other fire prevention efforts were the highest priorities for survey respondents.

Investment in affordable housing, by contrast, didn’t receive a majority of support. About 38% favored the concept while 43% opposed it.

But the proposal drew support Tuesday from politically powerful advocates for the local business community, such as the Sonoma County Alliance and the Santa Rosa Metro Chamber.

“It can’t be done fast enough,” said Brian Ling, executive director of the alliance.

Gregory Fearon, a local resident who often advocates for the poorest in Santa Rosa, encouraged the council to use its funds to help those most in need, even downtown, where property values — and potential rents from upscale developments — are higher.

“I want some Volkswagen Bugs,” Fearon said. “I don’t want a whole lot of Porsche Cayennes.”

You can reach Staff Writer Will Schmitt at 707-521-5207 or will.schmitt@pressdemocrat.com. On Twitter @wsreports.