PD Editorial: A winning deal for Petaluma: More senior housing, less litigation

Excuse us for stating the obvious, but the best solution for the housing crisis is to build more housing.

Gov. Gavin Newsom says affordable housing is a top priority for his administration.

And, like many communities around the state, Petaluma is eager to pitch in.

So, here's hoping the governor is willing to make a deal: Trade one protracted legal battle for one stalled apartment project for low-income senior citizens.

What's not to like?

Here's some background. Petaluma Ecumenical Properties, or PEP, is a nonprofit developer of affordable housing. Founded in 1978, PEP operates 17 properties totaling 431 units in the North Bay and has a four-year waiting list, including more than 700 seniors.

PEP also has permits in hand to build a 54-unit apartment complex for seniors on Petaluma Boulevard South. It needs $1.5 million to complete the financing before construction can get underway, according to Petaluma City Councilman Mike Healy.

The city of Petaluma is ready to chip in $1.5 million - if the state is willing to settle a four-year-old lawsuit over redevelopment funding.

Petaluma went to court in 2015, seeking to recover $8.7 million that the city lost when California eliminated local redevelopment agencies during the Great Recession. Of the total sum, $2.6 million was earmarked for affordable housing. The rest was to be used for economic development projects.

The city argued that it took the necessary steps to retain the redevelopment money, but the state prevailed at the trial and appellate court levels. Petaluma's council recently voted to appeal the case to the state Supreme Court.

But, in a Feb. 25 letter to Newsom and Attorney General Xavier Beccera, the city offered to drop its appeal and abandon its claim to the economic development money if the state allowed Petaluma to keep the $2.6 million in affordable housing funds.

“Petaluma has a proud history of meeting our Regional Housing Needs Assessments targets in all affordability categories … prior to the dissolution of redevelopment agencies,” the letter said, referring to development goals assigned by regional planning agencies. But the city is presently falling short in the low- and moderate-income housing categories.

“The reason is not a lack of willingness to build such housing,” the letter said, “but rather a lack of funding.”

Having won the first two rounds, the state's lawyers probably are confident that they will prevail again with the Supreme Court. But to what end?

Redevelopment agencies were shut down in 2011 as the state struggled to close a $27 billion budget deficit. We supported the decision because some cities - none of them in Sonoma County - had abused the redevelopment process, which enabled cities and, in some instances, counties to divert property taxes to pay for economic development in blighted areas. A share of the money also was supposed to be spent on housing.

Today, the state has a budget surplus of better than $20 billion, on top of a growing reserve fund for the next economic downtown.

If the state accepted Petaluma's terms, the $2.6 million in housing money would be less than 0.1 percent of the state's budget surplus. And the payoff would be badly needed affordable housing for senior citizens in one of California's priciest real estate markets.

That sounds like a smart solution to us. How about it, governor?

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