After Measure N defeat, Santa Rosa mulls next move to spur housing development

It’s back to the drawing board to publicly finance new housing projects in Sonoma County, with the likely prospect of yet another fight in the future over who gets to draft the plans.

Last week, Santa Rosa voters rejected a $124 million housing bond measure, a key proposal that would have leveraged state and federal aid to build an estimated 3,000 to 4,000 homes.

The defeat came after a campaign that opened a wide rift between supporters, including city officials and many civic leaders, business and environmental groups, and opponents led by the region’s largest organized labor coalition and a politically emergent Indian tribe.

Now city and civic leaders say they still want to use public money to help address the county’s longstanding housing shortage, driven by the sharp drop in residential construction a decade ago during the housing crash and severe recession.

The predicament worsened after the 2017 wildfires destroyed more than 5,300 homes countywide, including more than 3,000 in Santa Rosa.

Any tax-raising plan that emerges over the next year likely will produce less money than would have been available through Measure N, the failed bond proposal, officials say.

And it could renew the fight between nonunion builders and labor leaders that shadowed Measure N, over what percentage of the money should be governed by union terms. Disagreement over that share led to the North Bay Labor Council formally opposing Measure N, attacking the proposal in newspaper advertisements bankrolled by key ally the Federated Indians of the Graton Rancheria, owner of the Graton Resort and Casino outside Rohnert Park.

Santa Rosa Councilman Jack Tibbetts, who helped spearhead the Measure N campaign, said the dispute showed the disagreement over so-called project labor agreements - deals guaranteeing union rules and benefits for taxpayer-supported construction - is “pretty entrenched and longstanding.” Past disputes over such policies have roiled both the Board of Supervisors and the board of trustees governing Santa Rosa Junior College.

“Until that issue gets resolved, I don’t see those two sides getting together on project construction financing,” Tibbetts said.

The bond measure’s defeat came three years after business, civic and elected leaders began to widely lament the housing shortage in Sonoma County.

From 2000 to 2008, builders had constructed about 18,000 houses and apartments in the county, according to state Department of Finance estimates. In the next eight years, construction fell to about 6,300 homes. Officials consider that difference of almost 12,000 homes as an approximate count of the residential construction shortfall since the downturn.

The calls for action grew louder after the North Bay wildfires in October 2017 burned more than 6,200 homes across the region.

What resulted were reports, conferences and plans to build homes on surplus government land. Yet, to date, officials can’t take credit for many new houses and apartments here.

The housing bond was meant to change that. In addition to subsidizing construction of new homes, it was slated to pay for homeless housing projects, provide down payment assistance for first-time homebuyers and aid for residents seeking to rebuild after the 2017 wildfires.

The campaign in support of Measure N did bring together an unprecedented coalition of business and environmental groups, plus support from teachers and two other union groups that stuck with the bond proposal - the Teamsters and operating engineers.

Some pointed that broad coalition as an accomplishment that can help bolster efforts to build more homes here in the years to come.

Moreover, supporters point to the solid majority of city voters - 58.8 percent in the latest tally - that supported Measure N. While that share fell short of the required two-thirds approval, it still included plenty of property owners who were willing to tax themselves to help someone else get a more affordable place to live in Santa Rosa.

“That’s just a lot of homeowners showing a lot of good will,” said Chris Grabill, a Santa Rosa general contractor, housing advocate and co-chairman with Tibbetts of the Yes on Measure N campaign.

However, building and labor leaders saw little to celebrate.

“Nothing will soothe my disappointment (in the measure’s defeat) and my anger toward those who assisted in its demise,” said Keith Woods, CEO of the North Coast Builders Exchange, a Santa Rosa trade group that has opposed project labor agreement policies passed by the Board of Supervisors and SRJC trustees.

Woods predicted builders and union leaders will continue to disagree over such deals. Unions want “something that’s good for labor,” he said, while “we want something that’s good for the community.”

Opponents of Measure N stressed that the surge in construction dollars, as proposed, would have benefited predominantly the construction companies in line to build the next wave of projects.

Jack Buckhorn, executive director of the North Bay Labor Council, called Measure N a “colossal failure” and attributed it to “a lack of leadership on the part of the Santa Rosa City Council” for trying to craft a solution “to the exclusion of the worker.”

“If Measure N proves anything at all,” Buckhorn said, “it proves you can’t have somebody left outside.”

Brian Sobel, a political analyst and former Petaluma city councilman, said he remained unsure how much the opposition of the labor council and the Graton Rancheria led to housing bond’s defeat. Two-thirds approval is already a high bar to reach, he said, and a significant minority of voters believe that government continually seeks to boost taxes and “there has to be a time when I say ‘No.’?”

However, Sobel said, the housing bond measure did raise the question of whether the Graton Rancheria intends to use its casino revenues to become a larger force in North Bay politics.

The tribe reported spending at least $22,000 to fight the measure, far less than the more than $280,000 it donated for Measure M, a county parks sales tax that was approved on the same ballot. Despite the vastly differing amounts, Sobel suggested that providing funds to support a measure amounts to helping your allies, but opposing one is a deeper level of involvement.

“When you weigh in against something, that’s when you flex your political muscle,” he said.

Greg Sarris, tribal chairman of the Federated Indians of Graton Rancheria, said the tribe wants to be involved in future discussions about how to build much-needed housing in the county.

But it wants a plan “that guarantees an equitable wage and benefits” for those building the homes, he said. And, as with Measure N, if the tribe thinks government action would harm the environment, workers or the poor, “we will definitely step in and use our resources.”

“It’s a new day here,” Sarris said.

Meanwhile, it remains to be seen what other financing measures could help spur local home building projects. Various political and labor leaders have suggested options such as a tax on businesses to help develop workforce housing and using pending federal disaster relief funds targeted for housing.

Another idea supported by Tibbetts, the Santa Rosa councilman, would leverage a new real estate transfer tax. However, a city finance official cast doubt on the viability of that option last week at a City Council budget subcommittee meeting.

Larry Florin, CEO of the nonprofit builder Burbank Housing, said voter approval last week of the state’s Proposition 2 will provide $2 billion for housing and mental health services for the homeless. Some of those funds eventually could help build Caritas Village, a 137-unit project in downtown Santa Rosa proposed by Burbank and Catholic Charities at Morgan and Seventh streets.

Also approved last week was the state’s Proposition 1, a $4 billion affordable housing bond. However, getting a portion of that money won’t be easy for Santa Rosa because it requires local governments to kick in smaller amounts of their own money, Florin said.

Tibbetts said the state housing funds eventually will go to communities with matching money, possibly from their own local housing bonds similar to the failed Measure N. Somehow, he said, the city needs to find local dollars for housing while money from the state is still available.

“We cannot let this funding opportunity pass us by,” he said.

James Gore, chairman of the county Board of Supervisors, suggested the fight over Measure N amounts to one more step in a marathon to build more homes. In that effort, he said, local governments will work with whatever resources they can muster: surplus land; developer incentives; streamlined planning processes; local taxes; and state and federal disaster funds.

Gore said younger residents seem to understand the urgent need to do something, partly because they find the county such an expensive place to live. But plenty of older homeowners still raise objections over new housing projects that could affect their lives.

“The problem,” he said, “is everybody supports housing but not in their backyard.”

The mismatch between current supply and demand shows the shortage affecting a growing tally of people.

Florin said Burbank Housing has 15,000 county residents on waiting lists to get a rental unit. With the defeat of Measure N last week, he said, the county’s housing shortage is likely to get worse before it gets better.

“Those 15,000 people didn’t go away after Tuesday,” Florin said.

You can reach Staff Writer Robert Digitale at 707-521-5285 or robert.digitale@pressdemocrat.com. On Twitter @rdigit.