The status of a terminated fund for affordable housing projects sparked old disgruntlements at the San Luis Obispo County Board of Supervisors meeting.
“What we fear is some of you may want to reinstate the ‘in-lieu’ program, which is really a tax on market-rate housing, which makes it more expensive along with all the other fees,” Mike Brown of the Coalition of Labor Agriculture and Business (COLAB) told the board on Aug. 22. “You’re taxing the very thing you want more of in the in-lieu program.”
The Board of Supervisors dropped the ax on the Title 29 Affordable Housing Fund last March when it voted out the county’s Inclusionary Housing Ordinance, 4-1, with 2nd District Supervisor Bruce Gibson dissenting. That board held a conservative majority with Supervisors John Peschong and Debbie Arnold, who still serve on the board, and Lynn Compton, who lost her 2022 reelection bid. The new iteration of the board contains a liberal majority, with 4th District Supervisor Jimmy Paulding taking Compton’s seat.
Past New Times reporting found that the overarching reservation from supervisors not in favor of the affordable housing fund was that the contributions to it weren’t large enough to make a dent, subsequently being an unfair burden on the housing industry.
Exactly $519,227 is left in the housing fund for fiscal year 2023. It belonged to the Inclusionary Housing Ordinance, which required certain development projects to set aside a percentage of proposed housing units at an affordable price. The ordinance also set up the housing fund, which gave builders the option to pay fees in place or in lieu of reserving some of those units as cost-effective options.
Shortly after the previous board eliminated it, the housing fund contained a little more than $720,000 as of July 1, 2022. Since then, the county committed some of that money to different affordable projects around the region. The current board took stock of the update at its Aug. 22 meeting.
The annual report about the fund detailed that between July 2021 and June 2023, the money coupled with additional funding sources helped complete some affordable housing projects in Nipomo and Arroyo Grande, and more developments in areas like Pismo Beach, Morro Bay, Atascadero Paso Robles, and Templeton are slated to be ready between this summer and 2026.
Funded projects include 40 units from the Willow Walk Senior Apartments with the Housing Authority of SLO, the 50-unit Pismo Terrace from People’s Self-Help Housing, and nine units from Vine St. Homes under Habitat for Humanity.
Kristin Ventresca, the administrative services manager of the county Homeless Services Division, told New Times that the remaining balance of roughly $520,000 will be included in the 2024 Action Plan Notice of funding availability, which will be released this fall. There is no deadline the fund must be used by.
“During this process, entities may apply for the funds available while keeping in mind that Title 29 requires that the funds be allocated to affordable housing projects located within the same housing market areas as the projects that paid the Title 29 [affordable fund] fees,” she said via email. “The open-to-all category includes Title 29 interest collected, which can be used in any area of the county.”
Other funding plans are also in place for affordable housing for when the Title 29 fund runs out. Ventresca added that the Homeless Services Division applies for and manages a couple of grants from the U.S. Department of Housing and Urban Development and the state’s Department of Housing and Community Development.
“Some of these [funding] sources, if awarded to a housing developer, can also be used as local matching funds to assist in their application for California Tax Credit Allocation Committee funds,” she said.
For Supervisor Gibson, restoring the affordable housing fund is a priority.
“We’re going to be talking about the strategies for housing, and I absolutely would support bringing it back,” he said. “It was a minimal extra fee only on houses that aren’t affordable to working people by any stretch of the imagination.”
Gibson said that the Inclusionary Housing Ordinance only applied to houses built at 2,200 square feet or larger—sizes that aren’t remotely affordable anyway, he said.
He touted the affordable housing fund under the ordinance as a “key piece to the puzzle” because of the growth potential that lay in those investments. Past county reports documented that inclusionary housing fees generated between $130,961 and $816,235 annually from 2017 to 2021.
“We could invest that directly with affordable housing producers,” Gibson said. “They could take that money and leverage it at least seven or eight times to whatever we put in. It’s good match money to get them the funding so that they can actually make it happen.” Δ
This article appears in Aug 24 – Sep 3, 2023.