Fair Housing Act
When it comes to getting in on affordable housing developments, it helps to know the right people. But that's about to change.
Thursday, May 17, 2001
Mark Poehner doesn''t own a home here, but he would like to. For now, the first grade teacher and his family dwell in a cramped apartment in Monterey, and with rents continuing to rise beyond the reach of the middle class, he has no hope of owning his own home in these parts. In what''s quickly becoming a cliché on the Peninsula, Poehner plans to move his family to Florida, where they can afford to purchase a home.
Poehner might have stayed here and continued to teach his Salinas schoolchildren if he had heard of the term "inclusionary housing" earlier. He first heard of it when he attended a barbecue with some friends who live in Oak Tree Place, the affordable housing community built by Woodman Development to satisfy the inclusionary housing requirements of the swank Monterra Ranch subdivision.
In the unincorporated parts of the county, when a developer builds a housing subdivision of seven or more homes, the county''s inclusionary housing ordinance requires the developer to dedicate 15 percent of those homes to low- or moderate-income families--those who make 120 percent of the county''s median income or less. The affordable units can be built onsite (developers of the Las Palmas and Pasadera subdivisions sprinkled their inclusionary units among more expensive homes) or separate from the rest of the subdivision, such as Woodman did with Oak Tree Place. Or the developer can pay in-lieu fees--$4 million has been collected since the ordinance was written in 1980--which the county gives to nonprofits such as CHISPA to build affordable housing.
During the barbecue, Poehner marveled at his friends'' beautiful brand-new home, complete with a bay view and nestled on a hillside at the foot of Jacks Peak. Had he known about the project, he could have applied for one of those homes in 1996, when the developers started a list of potential buyers.
But it''s not that easy, his friends warned him. To get an inclusionary housing unit, it helps to know the developer. Poehner was dumbfounded to discover that developers are given free rein to dole out their inclusionary units as they see fit, as long as the buyers meet the prescribed income requirements and the county approves the applications.
For instance, according to Poehner, 17 of the 42 houses in Oak Tree Place--which sold for $160,000-175,000 in 1997--went to folks who attend the same church as William Silva, a partner in Woodman Development. Silva''s mother-in-law also got a unit, as did some employees of Clint Eastwood, whose company built Monterra Ranch.
Another friend of Poehner''s, who landed an inclusionary unit at another subdivision, "went in and made friends with the developer," Poehner says. She told Poehner that he should do the same thing. "That was a nice little piece of advice for a friend to give us," Poehner says. "But from an ethical standpoint, I said, what in the world? It''s just such an injustice."
William Silva says his mother-in-law and many members of his church, including the pastor, did indeed end up with homes in Oak Tree Place, but they were not given preferential treatment. Silva couldn''t recall how many families from his church received houses, but says he believes it''s less than the reported 17. He says that some residents started attending his church, which is near the subdivision, after they moved in.
The ones that did get homes, he says, "were within the income restraint and they qualified--that was coincidental and had nothing to do with anything we did," he says. "We did everything fairly and without partiality."
The coincidence is actually easily explained. After setting aside some housing for employees of the developers of Monterra--a contractual obligation--Woodman found itself on its own as far as marketing the inclusionary units. The county had no guidelines to offer the company.
"They basically told us there are no rules," Silva says, "so the best thought we had at the time was to do a first-come, first-serve basis." Silva''s church was one of the first places he posted information about the project. He and his company printed up packets of information about the project and distributed them by hand around town. Besides Silva''s church, they went to banks, title companies, and various businesses.
After construction started, an article ran in the local daily, after which Woodman was bombarded with applications and the list of respondents swelled to more than 400 families. To disperse the homes, the developers went down the list (after Monterra employees got their houses) and awarded houses to the first applicants who met county income requirements and who had secured a mortgage. Silva''s mother-in-law and several church members happened to top the list.
"I can say with certainty we didn''t do anything inappropriate or wrong at all," Silva says. "We followed the rules."
Closing the Gap
And that''s exactly the problem, says Jim Cook, head of the county''s Redevelopment and Housing Division. If there''s an inequity with the way the inclusionary units were doled out, the problem lies with the county''s inclusionary housing ordinance, not the developer.
"What Woodman did or did not do was allowed in the ordinance, because the ordinance did not provide enough specificity," Cook says.
In fact, as it''s currently written, the ordinance doesn''t speak to marketing or selection of buyers at all. Buyers must fit into certain income requirements--currently, a family of four can''t make more than $60,350 annually--and their applications must be approved by the county Housing Authority. But developers are left to their own devices when it comes to selecting the new homebuyers. That''s something Cook hopes to change.
"From a staff perspective, we feel very strongly that there needs to be a fair and objective process for selecting home buyers of inclusionary housing," he says.
It''s important to take the developer out of the selection process, says attorney and affordable housing advocate Jane Haines, because it leads to an unfair advantage for people willing to court the developer.
"I think what you''re doing is the people who don''t have the language skills, who don''t have the education, who don''t have the savvy to get themselves a unit will stay on the list forever, and it shouldn''t be that way," she says.
When the inclusionary housing ordinance was last amended in 1994, the need for moderate-income housing wasn''t as dire as it is now. Today, with people desperate for affordable housing, it''s become painfully clear that the rules needs to be overhauled. So the county, with help from a consultant and the community, is currently hammering out a new set of rules for inclusionary housing. Among the new regulations--which may, among other things, affect the percentage of inclusionary housing required of developers--the county is looking at ways to make the selection process more equitable.
Right now, the county is leaning toward a random selection process via a lottery. A draft proposed ordinance includes a new section of marketing requirements, which would compel developers to place a notice of availability in local newspapers and also send the notice to lists maintained by the Housing Authority. The notice must state that preference will be given to those currently working or living in Monterey County. If there are more applicants than available units (which, most assuredly, there will always be), then the developer would choose buyers by lottery or another form of distribution approved in advance by the county.
Mark Poehner says the county should go one step further and have the lottery conducted by an independent third party. "What a solution would be is for the people who work in housing, whether that may be the developer or for the county, should have no say in the lottery," he says.
From the developers'' standpoint, Silva agrees a lottery administered by a third party would be an impartial way to dole out inclusionary units. It would also remove the perception that developers are practicing favoritism.
"We never had any guidelines or suggestions when we began," he says. "I think a lottery would be an excellent system."
Monterey County invites community members to take part in two upcoming workshops regarding inclusionary housing regulations. The workshops take place May 23 and June 6 at 6pm in the Board of Supervisors Chambers in the Salinas county courthouse building.