A group of home builders, real estate agents, land owners and purportedly seniors, teachers and other moderate-income makers, too, plans to circulate a petition asking voters to approve put a measure on the November ballot to decrease the number of affordable housing units.
The group also formed a Political Action Committee (PAC) that will facilitate and fund the signature signing.
Real estate broker John Telfer, a leader of the group, said he and other members of the new PAC, "Citizens For a Balanced Community," claim that Measure C, the city's growth-control initiative passed in 2004, doesn't give enough home buying options to moderate-income earners, while very low- and low-income wage earners buy homes they can't afford in the long run.
Telfer said the petition asks residents to agree to a ballot measure that would, if approved, change language in Measure C to shift the responsibility of building very low- and low-income housing from home builders to nonprofit organizations, like South County Housing.
According to a March poll of 400 randomly-selected Morgan Hill voters, Telfer said 65 percent agreed that the amount of BMR housing in Morgan Hill is too high compared to neighboring cities, and 51 percent believed the policy is having a negative effect on property values. About 74 percent said they think the BMR policy is driving out middle-income home buyers. And 70 percent would support a ballot measure containing the initiatives in the group's petition. Telfer said the poll was conducted by an impartial Colorado firm.
Telfer said the petition is a back-up plan in case Citizens For a Balanced Community didn't feel city officials were working with them on the matter. But lately, through avenues like the city council's Community and Economic Development Committee and the planning commission's Residential Development Control System Subcommittee, his group felt the city was working with them, so carrying out the petition and the ballot initiative that would result may not be necessary.
In March, the city council approved an interim price increase for BMR units of $24,000, making the lower-income home price $200,000.
"I do thank the city for taking steps to try to understand both sides," he said. "However, we don't have a lot of time, and if we're going to qualify to be on the November ballot, we had to get (started on the petition). Our hope is that we will be able to work with the city on this, and there's a decent chance that we'll be able to do that."
City Attorney Janet Kern said working with the city provides a more thorough discussion on an issue, compared with the "he said-she said" that a petition delivers.
"When a group comes through with a particular measure, they're out there telling what they think it means, and anyone against it is telling what they think it means," she said. "It turns into typical campaign talk about it, not a full analysis."
An open debate, which would be provided if Citizens For a Balanced Community stuck with the legislative route to get Measure C changed, would better flesh out the issue, Kern said. For example, Citizens first provided Kern with a copy of their initiative, but its language had legal issues, so they withdrew it and resubmitted. Had there been more open debate about it, most of the issues would come to light sooner, Kern said.
City Councilwoman Marby Lee, a member of the Community and Economic
Development Committee, said the way the law is currently being administered doesn't seem to be working the best for anyone.
"People are being able to buy houses with incomes a lot lower than what we were given, with big down payments," she said. "I question that, with incomes lower than on charts, if it serves them very well. Yes, they have a house, but are they able to keep up in a way they would want to?"
Lee said it might make more sense to have more rental opportunities for them, than actually buying a home.
The city currently administers the Measure C initiative through a point system. Home builders who include a high percentage of BMR units in their developments receive more points; the more points a proposed project receives, the more likely it is to be chosen by city officials to be carried out.
This point process, Telfer said, has resulted in developers gorging their developments with BMR units to receive the golden go-ahead.
"In the early days of Measure C, measures were lower," he said. "We've evolved, or mutated, into this high percentage."
Telfer said industry figures calculate that up to 42 percent of new housing in Morgan Hill is built for very low-, low-, median-, or moderate-income households - a figure he says is too high and not good for anyone - not developers, low-income wage earners, or moderate-income earners.
City Planning Manager Jim Rowe argued that up to 33 percent of housing built in Morgan Hill is subsidized, but a percentage far less than that is sold at below market rate.
"Of the 20 percent allotment that goes to nonprofits and affordable housing specialists, 25 percent is sold at market rate to (subsidize) the lower-income units," he said. In other words, Rowe said the city doesn't consider the 10 percent of homes built for moderate-income earners as below market rate homes because the buyers pay what they're worth - developers build them under certain guidelines to assure this - and buyers can turn around and sell them at whatever price they can get. Truly low-income housing, Rowe said, has deed restrictions that last anywhere from 10 to 30 years and keep owners of BMR units from selling their homes for a windfall.
Garrett Toy, the director of Business Assistance and Housing Services, handles the 13 percent of units being built for low- and median-income households. He said his department, which oversees affordable housing, has received complaints about the upkeep of BMR properties - but not at a greater rate than homes bought at the open-market rate.
"We've gotten calls from people on a BMR house not being kept up, and then as it turns out, it's not even a BMR house," Toy said.
Toy said the assertion by the newly formed PAC that some low-income wage earners buy homes they can't afford is, again, something that happens across the market, not just to BMR units.
The PAC proposes in its ballot initiative that the responsibility to build low-income housing shift to nonprofits, or builders who specialize in low-income housing.
"We're not saying do away with (below market rate) units altogether," Telfer said. "But it has to be subsidized by somebody, and we're saying that nonprofits have all these other tools to use to subsidize the housing, while homebuilders have to shoulder the burden, or pass it on to the consumer."
The PAC would also like to change Measure C to reduce the percentage cap for nonrestricted moderate-income housing from 10 to 5 percent.
Telfer said his group of concerned businesspersons and citizens based their petition requests on the findings of a poll the group commissioned in March.
"We thought it was time to see if we were the only ones concerned," Telfer said.
Of 400 randomly called Morgan Hill residents, about 70 percent said they felt the percentage of BMR units built was too high, based on surrounding cities.
"In fact, Morgan Hill residents wanted a number lower than what our initiative is now calling for," Telfer said.
The Community and Economic Development Committee will present its findings and make recommendations on the issue at the April 23 city council meeting. Meanwhile, the Citizens For a Balanced Community would need to collect about 1,580 signatures by late May if they want to move forward with a ballot measure for November's election.
If approved, the Measure C language changes would not change the number of houses built in Morgan Hill, only for what purpose the houses are built for.
Natalie Everett
Natalie Everett Natalie Everett is the education and city reporter for The Times. Reach her at (408) 779-4106, ext. 201, or neverett@morganhilltimes.com.
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