The Merced City Council voted to reduce the city’s affordable unit production requirement for residential developments in new annexation areas, and also created an in-lieu fee structure to assist housing projects in general during a lengthy meeting on Monday night.
The issue of creating more affordable housing in Merced has been raging at City Hall for more than two years — with leaders trying to come up with solutions for the intense demand for more overall units while also meeting regional needs requirements, and calls from the social justice crowd to embrace a well-enforced “inclusionary zoning” strategy for the city.
Merced’s previous answer was a plan that required 12.5 percent of total units in new residential developments to be restricted and made affordable to households with extremely low to moderate incomes, as well as provide in-lieu fee options for developers to make certain housing projects economically feasible. Those fees, in turn, would support the city’s Housing Trust Fund, and would be leveraged with other resources to attract state subsidy and grant programs for affordable housing.
On Monday night, council members voted 6-1 to reduce the affordable unit production requirement from 12.5 percent down to 5 percent on all new single-family residential developments in pre-annexation areas, including major planned development around UC Merced.
The vote excluded affordable housing requirements on new multifamily apartment projects, as well as any infill projects within the existing city limits. Also, a new in-lieu fee structure (an alternative way for developers to satisfy the affordable housing requirement ) was set at $5,000 per unit for a project in the annexation areas near UC Merced, $2,000 per unit for new project areas north of Bear Creek, and $1,000 per unit for the same south of Bear Creek.
The lone NO vote came from Councilman Fue Xiong, a staunch supporter of inclusionary zoning who asked his colleagues to raise the affordable unit requirement to 15 percent.
“All we are going to do here is encourage folks to not build these units, and that’s all thats going to happen,” Xiong said. “Five percent is too low. We are not going to see affordable units.”
Robert Dylina, a local mortgage specialist and developer who was interviewed by the city’s housing policy consultant on the matter, disagrees with Xiong’s assertion. He said the policy was thoughtful and necessary.
“The housing policy was brought back for review and adjustment because the council had performed its own additional due diligence and saw that the policy in it’s previous incarnation placed an extensive burden on home buyers in an already difficult market,” Dylina told the Times. “It would have added as much as $129 per month to the mortgage of every home buyer captured by this policy. The council also saw that the previous policy often created lack of affordability in housing specifically designed for affordability, like apartment complexes. The original policy, while well intentioned, was set to reduce the housing supply in a time when Merced is already thousands of homes short of providing adequate housing for all of its citizens.”
Mayor Matthew Serratto was quick to point out that Merced has made great strides with affordable housing as of late.
“In paying the fees, we will continue to do what we are doing — using our money to leverage significant state grants, and build,” the mayor said. “We have 500 affordable units in the works … I think it’s a way more effective way to do it.”
The council decision came after nearly and hour and 20 minutes of public comment, including several UC Merced students calling for strict affordable housing requirements and decrying profits made by developers. There were at least 14 voicemails and some 20 requests to speak. The mayor called for a break at one point after a college student accented his remarks with profanity from the podium.
The amount of time spent Monday night debating the affordable housing issue, and not the precise policy details at hand, prompted Councilman Shane Smith to comment: “Something has got to change.”
The Merced County Registrar of Voters completed a signature verification process and determined that the Merced Vital Services Protection Measure (otherwise known as the Measure C Renewal) successfully qualified for placement on the March 2024 ballot.
The Committee for a Safer Merced — made up of local residents — was required to submit a total of 3,988 valid signatures of City of Merced voters in order to qualify the measure.
On Monday night — in what is basically a formality — City Council members were required to accept the citizen initiative and vote to place the measure on the next election ballot.
Interim City Attorney Brian Doyle explained to council members that a YES vote was mandatory by state law.
But then Councilwoman Bertha Perez spoke up and asked: “What happens if we vote NO?”
Doyle responded: “You all took an oath of office to uphold the Constitution and the laws of the state of California. So if you vote NO, you would be violating that oath of office. Also, in a certain way, you would be denying the public the rights they have under the State Constitution to the initiative process. So it will be very anti-democratic to do that. And thirdly, you would subject the city to a writ proceeding because it is a mandatory duty, and you would be violating the law in not voting to put it on the ballot. So it really wouldn’t accomplish anything to vote NO except that you would subject the city to substantial cost in having to attend a court proceeding to deal with the writ.”
Then Perez said the Measure C renewal effort was a “band-aid measure” that did not go far enough in funding to support the city’s public safety needs.
Then Councilman Jesse Ornelas asked if the vote had to be unanimous. The answer was yes.
Then Ornelas continued by saying he had put an item on the next City Council agenda (Oct. 16) to discuss whether the city should hold its own election, and not let it be combined with state elections by way of Merced County’s Election Department, which is normally the case with all city election races. He cited county ballot problems that affected the last local election cycle.
“Should we wait to have that discussion before we vote on the ballot measure?” he asked.
Then Councilman Xiong asked the lawyer if the mandatory vote could be postponed.
Clearly, wheels were spinning in the minds of the dais, and the City Council didn’t appear all-in for Measure C.
Councilman Smith reminded his colleagues that one of the reasons “to get this behind us, is so that the campaign to pass the measure has to get started. … There is no good served by anybody up her ducking this question today. The citizens put together a committee. They got more than 10 percent of the city’s voters to support this. Let’s let the voters decide.”
Mayor Serratto added, “There’s no sense in procrastination.”
The vote ended up being unanimous.
However, members of the committee that brought the Measure C renewal to fruition have expressed they would like an official endorsement by the council. By the sound of the discussion on Monday night, that specific ask might be a stretch for the city’s leadership team. Stay tuned.