Healdsburg set to place housing growth management amendment measure on March ballot

The Healdsburg City Council on Monday will consider placing a measure on the March ballot to revise its ordinance on new home construction, encouraging the development and sale of more homes for middle-income families.

The proposed amendment to the city’s annual residential growth cap, which voters approved in 2000, would represent the City Council’s latest effort to address local housing needs. Under current city restrictions, an average of up to 80 housing units can be built each year, but only 30 of those may be market-rate homes.

Voters last year approved Measure P, expanding Healdsburg’s “slow-growth” ordinance by allowing the construction of up to 50 income-restricted rental units for people who are considered middle-income earners. Individuals with annual incomes of between about $78,000 and $104,000 and families of four making between $112,000 and $149,000 fall into the category.

If council members approve the city staff-recommended amendment, and voters support it with a simple majority come March, it would allow developers to offer homes for sale for families within the same income levels rather than just apartment rentals within the 50-unit cap. The 30 market-rate home restriction would go unchanged, as would the exemption allowing an unlimited number of affordable units for those individuals and families with annual earnings less than 120% of the area’s median income.

“The whole idea behind Measure P was to make a class of housing that’s not market rate, which is astronomical in price, but also not affordable housing that needs all sorts of subsidies,” Councilman Shaun McCaffery said. “We thought we came up with a type of housing that pays for itself and developers can include in their project without too much heartache. What is being proposed doesn’t allow any more market-rate housing. It just allows them to be for sale.”

Healdsburg voters passed Measure P with 56% support last November. However, two years earlier, 59% of voters rejected Measure R, which attempted to repeal outright the city’s growth management ordinance.

Healdsburg is home to about 12,000 people, but has increasingly seen lower- and middle-income workers squeezed out due to rising monthly rents and some of Sonoma County’s priciest homes. At the end of September, the median monthly rental rate was $2,950 and the median sales price for a single-family home was $799,000, according to San Francisco-based real estate service Trulia.

To help retain some of the city’s existing affordable housing stock, Healdsburg this year also partnered with Santa Rosa-based nonprofit Burbank Housing to buy three low-income apartment complexes, preventing them from hitting the open market and possibly being transitioned into market-rate units. The city finalized the purchase of a 23-unit complex on Prentice Drive in June and closed on eight-unit complexes on Piper Street and University street in September.

The City Council will meet in closed session before the regular council meeting Monday to consider further collaboration with Burbank Housing, which owns low-income housing in all nine Sonoma County cities. The council and nonprofit are set to discuss a pair of city-owned properties for future affordable housing projects, though negotiations are still in the early stages, according to a Burbank Housing official. One property is at 1557 Healdsburg Ave., where Healdsburg’s Community Services and Parks and Recreation departments and some nonprofits are located, while the other site is at 3 W. North St.

On Monday, city staff members also will present the council with an option to buy a single-family home in the Parkland Farms neighborhood north of the Healdsburg Ridge Open Space Preserve to maintain it as a deed-restricted property. In an agreement established in 2004 with the Housing Land Trust of Sonoma County and the builder, the city government has the first right of refusal on 16 homes in the development - Healdsburg’s largest ever with 346 homes - to ensure it is maintained at a middle-income level when the homeowner sells.

If the deal is approved, the city would purchase the home, appraised at $785,000, for a negotiated price of about $600,000 before reselling it for $550,000 - maintaining it at 160% of the area’s median income. It would be the second such arrangement the city would pursue in the development, with the prior purchase in June 2018 netting a $57,000 profit.

Alternatively, the city could allow the owner to sell the Palomino Court home on the market and recoup roughly $137,000, which city housing administrator Stephen Sotomayor doesn’t believe is worth the loss to the city’s workforce housing stock.

“It just doesn’t make sense to let that asset go away,” he said. “We figure for another middle-income housing unit, $50,000 is not an exorbitant subsidy to keep a single-family home. Obviously we’re committed to increasing the number of affordable units in Healdsburg. I think in the next couple months, it will be exciting to see if some conceptual ideas gain traction.”

You can reach Staff Writer Kevin Fixler at 707-521-5336 or kevin.fixler@pressdemocrat.com.