Rebuilding Sonoma County: City and county leaders take urgent actions to stimulate home construction

Stephen Thomas loved his two-story Cape Cod home in Coffey Park. But after it burned in the wildfire a year ago, he wasn’t about to build a replica to replace it.

“That was a closed chapter,” said Thomas, a retired Santa Rosa police commander.

Instead, Thomas and his wife, Linda, had a new foundation poured this month for a factory-built, zero-net-energy house on their San Sonita Drive property in Santa Rosa. The two-story, farmhouse-style home with a loft will be built with sturdy insulated panels rather than traditional wood framing.

The house, Thomas said, is “all electric and all its energy comes from solar.”

The Thomases, who in the past year have lived in three different temporary residences, find themselves among those Sonoma County fire survivors rebuilding homes in an area with a decided lack of housing.

One year after the historic Tubbs fire, the most destructive in state history, the rebuilding of torched homes in the county is well underway, with about a third in some stage of the permit or construction process. However, city and county officials still are struggling with a second deficit: thousands of houses never built here following a global recession and a housing market crash 10 years ago.

The slow pace of new residential construction in the past decade and last fall’s fiery destruction of about 5,300 county homes have combined to create a pronounced shortage many local elected officials and real estate experts say led to an affordability crisis. Apartment rents and single-family home prices have soared since 2012, far outpacing wage growth and forcing many workers to commute longer distances from places with less expensive housing.

Economist and civic leaders say the shortage is preventing people from moving to the county and places an unwelcome brake on economic growth.

In response, city and county officials have proposed ways to spur new residential construction. That includes Santa Rosa City Council’s action last week to cut fees charged to builders for downtown projects of taller apartment buildings and more affordable houses.

Also, Santa Rosa voters this November will decide the fate of a $124 million housing bond offering. Supporters say the bonds could provide the local match for state and federal funds to build upward of 4,000 new affordable, or subsidized, homes.

The housing bond’s passage is far from assured because it requires a two-thirds approval and a major union organization at least initially has opposed it. Also, a recent battle over redeveloping the old 82-acre county-owned hospital property on Chanate Road in the city’s northeast section shows that individual housing development proposals can still meet intense neighborhood opposition.

Even though elected officials can’t take credit for spurring new housing developments in the past year, they do point to a growing consensus more homes are needed for working families that are vital to the community and its economy.

For evidence, look no further than the overlapping positions of Sonoma County Conservation Action, one of the prominent local environmental groups, and the North Coast Builders Exchange, a construction trade group.

Daisy Pistey-Lyhne, Conservation Action’s executive director, said new housing projects should meet a number of criteria, such as avoiding sprawl and generating less effects in terms of water and energy use and greenhouse gas emissions. Also, her organization doesn’t agree with the view of some county leaders that up to 25,000 homes should be built here in the next five years.

“But if we don’t develop at all, we’re going to lose our community,” Pistey-Lyhne said.

“Sonoma County needs to do its part” in providing workforce housing, along with the rest of the Bay Area, she said. She added she personally would welcome the chance to live in “a vibrant downtown core” in Santa Rosa and the discussion on new housing projects should move beyond “a fairly suburban mindset.”

“There are still many people who are thinking of Santa Rosa as it was,” she said, “rather than what it could be and should be in the future.”

Keith Woods, CEO of the builders exchange, said the county will “not build our way out” of the housing shortage with just new single-family homes. Developers will need “to build up and not out,” he said, and residents must accept taller buildings in downtown Santa Rosa.

Woods predicted a spurt of housing will be built along the Highway 101 corridor in the next few years and “the emphasis on multi-family will be like nothing we’ve seen in decades.”

Santa Rosa and county officials take credit for making it easier to secure building permits for those rebuilding homes in fire-ravaged areas of Coffey Park, Fountaingrove, Mark West and Sonoma Valley. Property owners have applied to rebuild more than 1,800 of the burned homes, and more than 1,000 have actually started construction.

However, more than 600 other property owners have listed their burned lots for sale since November 2017, according to data prepared by Pacific Union International senior vice president Rick Laws. Of those, about 350 owners have sold. The median price for the 41 sold lots in August was $245,000.

Santa Rosa Mayor Chris Coursey said the first year of fire recovery has gone better than expected. While he credited city staff for a job well done in expediting construction permit approvals, he said the resolve of fire survivors was crucial.

“It mainly has to do with the resilience and desire of people who lost their homes to stay here and get their lives back,” Coursey said.

Rarely has progress on the massive rebuilding effort come easily, though. Coffey Park neighborhood resident Eric Edenfield chose to replace his Starview Court home, but said he would have “sold my lot and ran” eight months ago if he had known what lay ahead.

A federal debris contractor this winter took an extra foot of soil from his yard during the cleanup. His city building permit for the identical floor plan took a month rather than a week to receive. And the contractor he signed with in January didn’t break ground until June and still hasn’t finished framing the house.

“My life has been on hold since the day of the fire,” Edenfield said. “And it still is.”

With the rebuilding, local officials at least can point to new foundations poured and homes rising from the ground. On the new home development front, there are few projects elected leaders can say they helped get started since the Tubbs fire.

“Folks needs to understand that no progress has been made vis-à-vis units in the ground,” said Santa Rosa councilman a leader in the effort to approve the city housing bond offering. “In fact, we’ve got a tremendous deficit.”

New residential development is still shaking off the effects of the housing crash a decade ago, when a flood of foreclosures sank home values. For years, developers complained they couldn’t sell new houses for what it would cost to build them.

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

California Housing Partnership, a nonprofit formed by the state Legislature in 1988 as an advocate for affordable housing, this spring estimated Sonoma County needed 14,600 more affordable rental homes to meet current demand. It concluded a typical household must earn the equivalent of $44.23 an hour - more than four times the state minimum wage - in order to afford the county’s median monthly home rental listing of $2,300.

Similarly, the California Association of Realtors estimates only 1 in 5 county households could afford the median priced home of $695,000 in the second quarter of this year ending June 30. A year earlier, 1 in 4 households here could afford to make such a purchase.

A lack of housing statewide is keeping families in other states from relocating to California, even though the economy here is humming, economist Christopher Thornberg said. Conversely, there’s been an exodus of lower-income households.

“When there’s no housing, it’s hard for people to move here,” said Thornberg, a founding partner of Los Angeles-based Beacon Economics.

Looking ahead, business leaders and a representative for a major property owner credited the city for last week’s reduction of fees for certain projects in and near downtown Santa Rosa.

The financial incentives “can and will assist in starting development that has been dormant or too complicated to get off the ground,” said Efren Carrillo, a former county supervisor and a consultant for Petaluma-based Cornerstone Properties. The company’s downtown Santa Rosa real estate holdings include the Pedersen’s furniture store property and the building at 427 Mendocino Ave. that’s home to The Press Democrat.

James Gore, chairman of the Sonoma County Board of Supervisors, said he and his colleagues soon will consider what to do with the long-vacant county hospital site. The county this year lost a lawsuit filed by neighbors over environmental concerns tied to the property’s sale.

Gore, nonetheless, said there needs to be a sense of urgency in providing more housing countywide.

“We’re in a crisis,” Gore said. “And we still have a lot of people who don’t want anything built unless it’s perfect ... I’m about better, not perfect, at this point.”

Supervisor Shirlee Zane, who represents much of Santa Rosa, said unless more homes are built “we’ll have failed our most vulnerable residents.” That includes seniors who can’t afford rent increases and immigrant families living in crowded, “Third World housing conditions.”

Local officials have done much to encourage more home building, Zane said, but “I think we’re finding it’s a lot harder than we anticipated.”

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