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Housing plan gets pushback over hot issue of affordability

Blame it on Kevin Blake.

If the councilman would have been at the City Council meeting on Tuesday night, the discussion on boosting Merced’s housing supply perhaps wouldn’t have lasted until midnight.

A few of Blake’s colleagues suggested they knew, pretty much, where he stood on the most debated issue related to the topic — the use of “inclusionary zoning” mandates to create affordable housing for local residents.

It’s true, Blake has weighed in on the issue before, and perhaps he would have repeated some of his commonly-used quips before making a motion from the dais: “We’ve already been through this. We’re wasting time. Let’s move on.”

But Blake wasn’t at the meeting, and so at the end of the 3 1/2-hour housing discussion, the six other members of the council remained divided, 3-3, on including some sort of inclusionary zoning mandate in an already complicated, staff-driven strategy to address this region’s latest housing crisis.

Finally, it was Councilwoman Bertha Perez who broke the tie, perhaps to save the overall plan from being completely stalled and re-introduced at a later date.

The city’s proposed “pro-housing policies” — presented by City Manager Stephanie Dietz and Development Services Director Scott McBride — as per council direction earlier this summer, did not include a direct inclusionary zoning mandate plan.

However, advocates for inclusionary zoning — including dozens who spoke up on Tuesday night — have continued to call for a specific mandate on all new housing developments in the city to include a percentage of “affordable housing” units. The figure of 15 percent has been tossed around.

Critics of the idea say it’s too broad, too counterproductive, and too negative toward the free market system and developers who might look elsewhere to do business.

The city’s strategy presented Tuesday night was extensive, detailed and billed as something that has taken a great effort to come to fruition. It also came on the heels of recent talks at the Board of Realtors, and at UC Merced.

In fact, on Tuesday afternoon, UC Merced Chancellor Juan Sánchez Muñoz and Mayor Matt Serratto convened a meeting with Secretary Lourdes M. Castro Ramírez of the California State Business, Consumer Services and Housing Agency, Director Gustavo Velasquez of the Department of Housing and Community Development and Merced community leaders at the UC Merced campus to discuss ways to add more affordable housing developments in Merced and throughout the region.

“California is moving swiftly to address housing insecurity and build more homes affordable to all Californians,” Secretary Castro Ramírez said. “As we make these investments — made possible by the Legislature and Governor Newsom — we are leading to ensure geographic equity so that communities like Merced receive support and are able to access these resources to increase housing stability and opportunity.”

Governor Gavin Newsom’s state budget includes a record $100 billion recovery plan that includes $3 billion into building more affordable housing opportunities for low-income families.

In Merced, city planners have been focusing on ways the City Council — the decision makers — can directly influence local housing production and investment. Indeed, the city can influence things like entitlement costs, permitting and plans, utility connections, design and construction requirements and Public Facility Impact Fees. They can help expedite the approval process for tentative maps and final maps.

So the new strategy includes ways the process can be streamlined for developers and builders. It features the frequent use of the word “flexibility” in regards to zoning and density requirements, and promotes a new vision of “layering” various types of housing for low to high income levels within developments. The facilitation of duplex homes and tiny houses is mentioned.

They also stress the need for Merced to comply with state laws, including SB35, and “By-Right” procedures that allow for issuance of building permits without discretionary review.

And perhaps the overall push for “affordable housing” is aimed at drawing attention to Merced — and UC Merced — in order to gain a “pro-housing designation” so that the city can compete for additional state and federal funding in a Central Valley where overcrowded or unavailable housing is widespread.

Dietz and her staff are taking a regional approach for this, thinking they can partner with the Merced County Association of Governments and other cities in the county. If they can pool the federal and state dollars they all receive, perhaps a “Housing Consortium” and/or Housing Trust can be establish to address some of the affordability issues in the area.

That was all fine and dandy for many of the residents who spoke up at City Hall for well over an hour on Tuesday night; however, dozens of them continued the call for a clear inclusionary zoning policy.

Sheng Xiong of the Leadership Counsel for Justice and Accountability asked city leaders to straight up reject the staff’s current proposal and rework it to include “I.Z.”

“It is clear that these policies are designed to give developers more access to building and increasing their profitability without giving community members any reassurance that all development agreements will produce affordable units proportional to the city’s RHNA [Regional Housing Needs Assessment],” Xiong pointed out. “We don’t see any concrete, across-the-board requirement that a certain percentage of low and very-low income units get constructed each time housing is developed. … We want to ensure that affordable housing will get built and not with just state and federal funding alone.”

Xiong added the question, “How will these [the city’s new] development agreements will be enforced?”

Some local Realtors and developers were also on hand to give their opinions on the issue.

Eric Hamm of Next Door Real Estate said: “Building affordable housing has to make financial sense for the builders. I’m up here to tell those of you who are pushing for inclusionary zoning to be careful of what you wish for. … Right now there is a housing shortage on all levels across the country — and I agree that the affordable housing area here in Merced is particularly troublesome — but what we really have is a supply and demand issue. If you go back 12 years, there was a reverse. There was more supply than demand, and you could have bought affordable housing anywhere in this community. … What you are forgetting with inclusionary zoning is that builders have a choice where they want to build. … Unless there is an incentive for the builders to build affordable housing, you are not going to get any built. They can go anywhere in the country and build right now because there is demand everywhere. … What we need is supply — period.”

After public comment, the six City Council members discussed the issue for another hour, with three of the council members — Bertha Perez, Jesse Ornelas, and Fernando Echevarria calling for an inclusionary zoning policy to be included in the city’s strategy going forward. A few votes were called, but they came up 3-3, with Council members Sarah Boyle, Delray Shelton and Mayor Serratto voting NO.

In the end, the vote was 3-2 to move forward with the city staff housing proposals along with council direction for staff to explore specific ways the city can “enforce” compliance in regard to city agreements with developers. City Manager Dietz asked for clarification that they were not being asked to do a “deep dive” into inclusionary zoning, and she got a nod from the mayor.

Stay tuned. Fasten your seatbelts. The discussion on how the city will address housing supply remains an ongoing process.

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