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NEWS
> CITY AND GOVERNMENT
Developers submit signatures for affordable housing initiative
Developers looking to change the city's affordable housing standards filed papers Thursday for the November ballot, officially beginning their cause to reduce the number of such dwellings built in the city.
The developers have worked extensively with the city in the past few months to reduce Below Market Rate (BMR) unit requirements, with the argument that Morgan Hill has an unusually high number of such units required compared to neighboring cities.
On Wednesday evening the Morgan Hill City Council, expected to adopt the Community and Economic Development Committee's recommendations that were agreeable to developers, once again couldn't agree on the percentage mix for such dwellings and sent the committee back to the drawing board.
Since city officials can't make up their minds on the matter, developers are moving forward with their bid for a November ballot measure.
Citizens for a Balanced Community, the political action committee formed by the group to address the issue, has been circulating a petition for about a month, looking to gain enough signatures to qualify for the November ballot. The initiative they are seeking would cap BMR units at 25 percent of new homes, including just 5 percent built as non-restricted moderate-income level for middle-class families.
"The response to our petition from Morgan Hill residents has been overwhelming," said John Telfer, a local realtor and member of Citizens for a Balanced Community. "I think these signatures reflect that residents are concerned with the way the city has implemented the BMR housing policy.
He said the city's current policy is driving out middle-income home buyers by artificially inflating market-rate home prices to subsidize BMR housing.
Realtor and longtime Morgan Hill resident Chris Borello said in the statement that the group doesn't want to change the city's growth-control plans, just how that growth is administered.
"This isn't about development, it's just about more balance in the development that does occur," he said.
At their Wednesday evening meeting, the council faced the same recommendations as they had on April 23, with minor revisions and clarifications. The council approved 11 of the 12 recommendations made by the committee on April 23, with the complex percentage question being one of the remaining issues faced by the council. Another related concern was when would changes be administered - if changes were implemented right away, the council wondered if they should change current developers' agreements, therefore relieving developers in the short term, considering the housing crunch they're facing now.
The committee again recommended to cap BMR unit development at 30 percent, with developers responsible for 5 percent, and those units they build would be low-income units.
But Mayor Steve Tate wanted to know more. He said if the council was going to OK reducing developers' requirements by so much - from 13 percent to 5 percent - then he needed to be convinced it was the right thing to do.
"When I was asked to put this item back on the agenda, I was told I would have some explanations, that I'd understand the numbers a lot better," he said. "But the numbers are exactly the same as what I know: we (would be) cutting them in half. I'm willing to listen, and to compromise, but I haven't heard any new news."
Councilman Larry Carr said he was concerned that by approving the recommendation, the council would be trading in median-income units for low-income units, and excluding the middle class more than they might already be excluded, with only two levels of diversity represented in any one development.
"In the past, we've said we wanted to focus on people with a median- and moderate- income level gaining home ownership," Larry Carr said. "I have yet to hear why (this is) better than spreading (BMR units) out in ways that we've always valued, in communities that I grew up in."
Councilman Greg Sellers, who chairs the committee, said it needed more guidance from the council if it was going to move forward, and asked if there was a number the council would be more comfortable with.
"There are two numbers... that are better than 5 (percent), and that's the 6 and the 7," Tate said, referring to a graph breaking down the total BMR units being divvied up by 24 percent built by affordable housing nonprofits and specialists and 6 percent by developers, and another possibility of 23 percent built by affordable housing nonprofits and specialists and 7 percent built by developers.
Councilwoman Marby Lee, vice-chair of the committee, noted there was already a great deal of consideration given for the 25-5 number.
"The discussion of these percentages is, in my mind, trying to come to a compromise between two ends of the scale between what the public and developers want versus what is required, or what the council's opinion is," Lee said. "It has been the question of what the quote-unquote right amount of affordable housing in Morgan Hill is."
This lack of action and agreement from the council led to the Citizens for a Balanced Community's continuing to seek a ballot initiative for not just reducing their responsibility by half, but to also reducing BMR unit built to 25 percent total, Telfer said.
The current BMR unit requirement is 33 percent total, with developers building 5 percent of low-income units and 8 percent of median-income units.
The council also couldn't agree on whether or not to change the developers' agreements on their allocated number of BMR units built in housing projects they're building now.
The Citizens for a Balanced Community said they were turning in more than 3,300 signatures gathered over the last month in support of their initiative on Thursday afternoon.
The next step in the process is for the city clerk to verify the signatures and certify that the initiative has qualified for the November ballot.
Once the signatures are reviewed, the city council will decide whether to adopt the initiative outright or put it on the November ballot, said City Attorney Janet Kern.
Sellers said the city's progress would be tempered by the developers putting the initiative on the ballot.
"It will make it difficult to see any progress between now and the end of the year if that happens," he said. "I'd be disappointed to see that happen. We've had a good and cooperative relationship (with developers) and that's going to be tested."
On the city council agenda for their upcoming Wednesday meeting, council will decide whether or not to authorize staff to prepare a report reviewing the ballot initiative, Kern said. This would take a neutral look at how the initiative would play out if it passed.
30 percent mixes the council may consider
(First number built by affordable housing nonprofits and specialists; second number built by developers)
20 percent / 13 percent (current)
25 percent / 5 percent
24 percent / 6 percent
23 percent / 7 percent
25 percent mix developers requesting through ballot initiative
20 percent / 5 percent
Every 1 percent increase in developer obligation is 2.5 units per year, or 10 total years from 2010 to 2014
Natalie Everett
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