I recently attended a Request For Proposals session in Sonoma County. An RFP is basically a government agency asking the private sector to offer solutions for something the government doesn’t want to tackle on its own. In this case it had to do with the need for affordable housing in a highly constrained market.
On the same day I attended an event organized by the Urban Community Partnership featuring presentations from Strong Towns and Urban3. The essence of the talks was simple. The current pattern of development is financially unstable and will result in municipal insolvency in the not-too-distant future. The ratio of expensive public infrastructure to taxable private property needs to tighten up a great deal in order to restore fiscal health. The older poorer parts of town actually generate more tax revenue per acre then they use in public services. Meanwhile the expensive new homes and big box stores out on the edge of town are a financial black hole for local government.
In between these two events I explored the neighborhood. I noticed an unusually high number of second hand recreational vehicles that were being occupied full time. This is illegal, of course, and people are routinely asked to move along by the authorities. But this is how the working class cobbles together their own version of affordable housing when nothing else is available.
Let’s go back to that RFP at the county offices. This is the proposed site of a possible pilot program to establish between eight and twelve small affordable housing units. The unspoken assumption is that state and federal grants will pay for everything since the county has no funds. One attendee who sells mobile homes said he could install code compliant one bedroom units for $60,000 each assuming utility connections are available. (They are not.)
Back at the Strong Towns and Urban3 sessions it was clear that small scale incremental infill development could provide plenty of backyard cottages and small apartment buildings on vacant land that’s already being served by existing public infrastructure. Tax revenue would rise in direct proportion to privately supplied housing. Both the municipal insolvency problem and the affordable housing problem could be solved by changing the zoning and building parameters. But that presupposes a radical change in the local political culture.
Here are the people who attend public meetings, vote, and lobby on behalf of their interests in the community. They would like to preserve open space, keep traffic congestion low, maintain their high property values, keep their taxes as low as possible, and generally maintain the character of their neighborhoods just as they are. The resulting regulations strictly limit new construction of any kind. Building permits run in the $24,000 range. Impact fees for a new home in Sonoma County are often as high as $50,000. The county is desperate for cash flow and newcomers are expected to pay for the privilege. None of that adds up to “affordable.”
These are the people in town who most immediately need reasonably priced places to live. These are also the people who will inherit the collective public debt and long term maintenance obligations of the current system.
One more time. These are the folks who benefit from a buy-now-pay-later approach that emphasizes stasis. “Not in my back yard.”
And here are the people who are currently priced out of housing and who will be experiencing reduced services while paying off the public debt for the next thirty years. Spot the difference?