Make $92,500 to $123,360? New ordinance aims to help you buy a house in SLO County

A divided San Luis Obispo County Board of Supervisors has approved a pilot program to create incentives for developers to build more housing that’s affordable for the local workforce.

The board split 3-2, with Supervisors Adam Hill and Bruce Gibson dissenting, on the new workforce housing ordinance and design guidelines, which relaxes some design standards and eliminates a requirement for developers to provide low-income housing or pay a fee that can be used to build affordable housing projects elsewhere.

Supervisors Lynn Compton, Frank Mecham and Debbie Arnold agreed Tuesday it would be worth seeing if the program could lead to construction of some affordable homes, but added a five-year sunset date.

“I think we ought to give it a try, and if it doesn’t work then we can come back and try something else,” Mecham said.

The new ordinance aims to create incentives to build housing for those earning from 120 percent to 160 percent of the area median income. That’s an annual income of $92,500 to $123,360 for a family of four, according to the San Luis Obispo County Housing Trust Fund’s 2015 income limits.

Currently, market conditions and development costs result in new homes averaging about 2,400 square feet, according to county staff. The program envisions smaller, single-family homes that would be within reach of county residents such as teachers, firefighters and other public employees, as well as private sector employees in tourism, health services and other areas.

County staff worked with the Economic Vitality Corp. to develop the ordinance, which was approved unanimously by the county Planning Commission on Oct. 27 after a series of hearings. It will take effect Dec. 22, and only applies to unincorporated inland areas of the county.

But Hill and Gibson had several concerns.

Gibson was unconvinced that any homes built for the workforce would remain at prices that the workforce could afford.

“Unless we are willing to deed restrict these units, we aren’t creating affordable housing,” he said. “We are creating small houses that will float to market value.”

Any homes built under the workforce housing program would be required to sell at certain prices — $455,000 for a two-bedroom home in Templeton and Nipomo, for example, with lower prices in Oceano and San Miguel.

But those price requirements wouldn’t apply to future housing sales.

Hill was particularly concerned that the majority of supervisors favored exempting the county’s low-income housing requirement — called the inclusionary housing program — from the new program.

The county Planning Commission recommended doing so in an effort to lower the cost further for developers, Commissioner Jim Irving told the supervisors.

But Hill asked Irving: “Would you say that the entire commission would also feel that having a pilot program on workforce housing should be a Trojan horse to destroy the inclusionary housing ordinance?”

“No,” Irving replied, “the discussion was that you’re tacking another cost onto the cost of building a unit.”

The majority of supervisors also voted to exempt the low-income housing requirement over concerns from the county counsel’s office that it would put the county at odds with state law by prioritizing workforce housing over low-income housing. The inclusionary housing program will come back to the board for a separate discussion Dec. 6.

Several organizations including the EVC, the Home Builders Association of the Central Coast, and the Coalition of Labor Agriculture & Business of San Luis Obispo County all supported the new ordinance.

“Many people are going to find many details of this ordinance that doesn’t quite suit them, said Sheryl Flores, vice president of home ownership for Peoples’ Self-Help Housing. “But overall, it’s a well-studied ordinance that as a pilot gives us a chance to see if it works and provides more housing.”

This story was originally published November 22, 2016 at 8:56 PM with the headline "Make $92,500 to $123,360? New ordinance aims to help you buy a house in SLO County."