::: COMMUNITY NEWS

What does the county's new affordable housing ordinance mean to Rancho Murieta?

Updated Sunday, March 6, 2005
First published Thursday, February 24, 2005

Unique as Rancho Murieta is in many ways, when it comes to the county's affordable housing ordinance, it's no different from any other place in the unincorporated areas of the county.

"The assumption is that every community in Sacramento County needs to provide for some affordable housing within their community and Rancho Murieta is one of those communities, just like all the rest," county Senior Planner Rob Burness said this week.

"There are a whole series of projects in the works that have been basically told, ‘You're not exempt from the ordinance and therefore you need to submit an affordable housing plan,' " he said.

Two development projects, the Residences of Murieta Hills and the Retreats, are pursuing different routes to comply with the ordinance, which went into effect last month.

The ordinance was "necessary in order for the county to adopt a housing element that met the state's requirements, and without (affordable housing) provisions, we were in danger of having fairly significant building constraints put on the county," Burness said.

The new ordinance calls for 15 percent of new residential development to be affordable for extremely low, very low and low income households.

Recently county planners met with builders for the Residences of Murieta Hills, the 238-unit project planned for the northwest edge of Rancho Murieta. As part of the process of deciding how a development can comply with the ordinance, "We're going through all sorts of meetings with people," said Burness.

"In the case of the Residences, that project was big enough that they couldn't just pay money (to sidestep the requirements) or anything like that. They had to provide some sort of affordable housing either on-site or off-site," he explained. He said the off-site option specified in the ordinance involves purchasing credits and, because of the newness of the ordinance, there are none to be purchased at this time.

Murieta Hills builders Warmington Homes and Woodside Homes told planners they would meet the affordable housing obligation by building half-plexes on between 16 and 18 corner lots for "a net increase of 18 or so units," said Burness. The number of lots would remain the same.

The half-plexes would be available to "low-income buyers as opposed to very low and extremely low," because the units are being sold, not rented, he explained.

And who would qualify to buy the homes? "When you look at the income that's associated with people who qualify, it's in the range of a policeman's or teacher's salary," Burness said.

Charts on the Sacramento Housing Alliance web site support that comment. Using median incomes in the county in 2004 and federal guidelines, one chart lists $35,900 as low income for a one-person household and $51,300 as low income for a family of four.

Real estate market figures for last month show the median resale price of a house in Sacramento County is $320,000, an increase of 31 percent over last year. "The soaring housing market has created very, very severe constraints on the part of many people in the state to find a place to live. That's why we have this ordinance. It's a very significant statewide problem," said Burness.

According to the ordinance, a maximum of 35 percent of a qualifying household's income would go to housing expenses, including mortgage principal and interest, taxes, insurance, assessments, and, in the case of Rancho Murieta, homeowner fees.

Clay Heil, vice president of land development for Warmington Homes, said the individual units of the half-plexes will be approximately 1,550 square feet in size and possibly sell for $160,000, based on a formula in the ordinance that the county will interpret. The formula includes such factors as bedroom count, family size and median income in the county. The ordinance also mandates that the affordable units will be "visually compatible with the market rate units" and have the same type and same quality exterior building materials, finishes and front yard landscaping.

At the March 2 session of the county-facilitated talks on development, it was said the home prices are expected to range from $186,000 to $215,000, depending on the number of bedrooms.

The bottom line for the builders is, "We have to subsidize them a great deal, which means it costs us a great deal. We would prefer to pay a fee if there were a way around it," Heil said. "If we could convince the county to make an exception and let us pay a fee, that would be our first choice. ... It's a detriment to us, in terms of dollars. A huge detriment. But it is the law."

Heil has suggested to the county that employees of the Rancho Murieta Association, the Community Services District and the Country Club be given priority in buying the half-plexes. He's based the idea on developments where Warmington offered members of service occupations -- school teachers, firefighters, and police -- "a priority to get to get those units. The benefit is we believe it serves … the neighborhood and the community."

Since Rancho Murieta is located at a distance from other residential areas, "It might be nice to have that available … so they could live where they work. … I think it makes it more acceptable perhaps to the neighbors that live out there."

The county is concerned that the plan is discriminatory, although it has been done in Marin County and Los Angeles, Heil said.

Burness thinks the idea has merit. "That's clearly something I think would benefit the community if the people that work there are able to live there." He sees the advantages as "less commuting, less traffic on the roads and it helps provide a sense of community. To that extent, I think it's a very significant benefit to the community as well." He said the legality of the plan is being looked into by counsel.

Some residents have reacted with shock or anger to the idea of having low income housing here. It's been suggested that developers in Rancho Murieta should sidestep the requirement to construct low-income housing by keeping their projects below the100-unit threshold to qualify to pay fees totaling $10,000 per unit instead.

"The cost of that exceeds the cost of providing affordable housing," said Heil, saying it would require the loss of 20 lots and cost a million dollars in fees for Warmington. "There's no way we could do that. We already have substantially less (density) than what was proposed for the area. And we're substantially less than a lot of the other areas in Murieta currently," he said.

The density for Murieta Hills is about one and a half units per acre, lower than the adjoining developed properties of Unit 2 and Unit 4, and lower than the reduced density now planned for the Escuela site located across the road from Murieta Hills.

The number of units was reduced from 398 units allowed in the 1984 master plan to 238 units. According to a document submitted to the county by the developers, the plan includes 54.5 acres of open space, approximately 37 percent of the project site.

Burness was asked about Heil’s interpretation of the ordinance before the start of the March 2 county meeting on development. Burness said the total number of units planned for Murieta Hills would have to be reduced to under 100 before the builders could apply to pay in-lieu fees because the entire project is being built at the same time.

If the developers were building in different time frames, they could try to qualify for in-lieu fees by reducing the number of homes in their separate portions of the project to under 100, but “it probably wouldn’t work,” said Burness.

There’s no reason to believe the county will automatically go along with reducing projects to fewer than 100 units, judging by the concerns that are now being raised at the county about the Retreat project, a proposed Murieta North subdivision that's currently going through the county review process.

The three Retreat properties total 95 units, down from a maximum of 573 units in the master plan.

Two of the three properties became candidates last year for the county's inventory of properties for low income and very low income multi-family housing. At that time, developer Gerry N. Kamilos asked the county Board of Supervisors to consider leaving them out of the inventory. After discussion, the supervisors voted to do so.

Now county planners are taking another look at the Retreat densities, which were reduced to less than four dwelling units per acre under the development plan proposed by Cassano and Kamilos.

"We're concerned about the low density of the Retreat because it's planned for 25 units per acre," said Burness. "The adopted plan for Rancho Murieta says we're going to provide for 25-unit-per-acre housing in this area. That's what we're reacting to. We haven't made our recommendation yet, but we've certainly had some concerns about dropping density and only providing one type of housing in the community."

"The county has made it very clear that they're the ultimate agency to determine what densities get built in Rancho Murieta because they control the master plan," said Robert J. Cassano of Cassano Kamilos Homes, the builder for the Retreat project.

"In the past, lowering densities was not a controversial thing. Will it be in Rancho Murieta? I don't know that yet," Cassano said.

Although the Murieta Hills builders had to increase the number of units to comply with the ordinance, Cassano said future projects will be able to factor in the affordable-housing requirements within the building caps specified in the Mutual Benefit Agreement.

The MBA, a signed and recorded agreement between the RMA and the Pension Trust Fund of the Operating Engineers, caps the number of units that will be built on the remaining property in Murieta North at 1,141, fewer than half the number included in the master plan. The agreement stipulates the dwelling unit counts "may be adjusted" if the county imposes unexpected development conditions with adverse economic consequences. The agreement also allows for up to 10 percent of the units within each subdivision to be transferred to another subdivision as long as the overall cap is not exceeded.

"The densities that we have capped (in the MBA) are the densities we plan to build toward that make the development work. And going below that is not something we want to do. And going above that is not something we plan to advocate," said Cassano.

The approaches the developers are taking to comply with the new affordable housing ordinance will be presented at the March 2 session of the county development talks at the Country Club.