As housing prices rise, SLO County supervisors look at big policy change

Homes under construction in the Toscano housing development. A new Zillow and CALmatters analysis shows San Luis Obispo County homeowners saved more than $200 million on property taxes, thanks to Proposition 13 and other tax benefits.
Homes under construction in the Toscano housing development. A new Zillow and CALmatters analysis shows San Luis Obispo County homeowners saved more than $200 million on property taxes, thanks to Proposition 13 and other tax benefits. dmiddlecamp@thetribunenews.com

The last time the San Luis Obispo County Board of Supervisors had a big conversation about housing, the average price of homes was $100,000 cheaper than it is now.

On Tuesday, they plan to discuss a package of housing policies in what will be their most comprehensive discussion on the issue since 2016. Representatives of the county Planning and Building Department have a list of recommendations for the elected officials to consider.

They will discuss or hear updates about a first-time homebuyer program, waiving fees for affordable housing and potential changes to rules about farm-worker housing, secondary units in backyards and tiny homes, among other things.

“The intent is to increase affordable housing,” said Robert Fitzroy, deputy director of department.

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“Affordable housing is such a complex issue,” he added. “There’s economic factors, employment factors, demographic factors. It’s a very complex issue that can’t be solved with one silver bullet. It really requires a toolbox of different policies to attack the issue in a multifaceted way.”

The desire for relief from growing prices is strong locally and nationally.

Lack of affordable housing affects public health, quality of life and the economy. A recent guest opinion in Forbes argues that the dire situation causes challenges for workers and employers, something felt locally as illustrated by companies that have moved out of the area due in part to housing prices.

Housing affordability recently hit a 10-year low, reflecting a trend that has hit home for Central Coast residents. Just 15 percent of households in the county can now afford the average priced home (at $600,000), a decline from 21 percent two years ago, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index.

Proposed changes to government rules could help, Fitzroy said, but it’s unknown how much. And pursuing the changes assumes the board has the political will to aggressively address the problem.

“We have things for (the supervisors) to consider, and (we’re) seeking further direction on where we want to go from here,” Fitzroy said.

Here’s some of what supervisors will talk about:

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Charging developers

Supervisors will consider whether to find additional revenue sources for an Affordable Housing Fund, which is money leveraged to help pay for affordable housing projects. They could chose to use general fund money, increase the transient occupancy tax (paid by visitors), add a charge on vacation rental units, earmark cannabis tax or create a bond.

Traditionally, it’s been funded because of the inclusionary housing ordinance that requires certain development projects to either set aside a percentage of affordable housing units or pay an in lieu fee to the fund.

The fee was adopted during the recession in 2008, so the board decided to soften the impact by phasing it over a five-year period. But, the current rate is set at Year 2 levels as boards have chosen not to increase it. A nexus study found the market could support higher fees, according to a staff report.

An analysis created by a stakeholder group found the county would need to provide an annual amount of $2 million to $4 million to meet housing goals set by a Regional Housing Needs Plan.

New developments

The Planning Department identified eight large tracts of land that have the best opportunity for building new homes, based on an analysis of opportunities and constraints.

The map is meant to serve as the first step in a long-term process and will help achieve a state mandate to zone areas to allow for a certain required number of housing units.

The areas identified include West Paso, West Templeton, South Atascadero, Pozo Road area, Los Osos Valley Road area, Edna Valley area, south Arroyo Grande/North Nipomo and southeast Nipomo.

Changing the rules on granny units

A list of changes to county code could ease regulations and streamline the approval process for accessory dwelling units, according to planning staff.

In addition to creating more housing supply, secondary structures can add value to an existing property by generating rental income or by housing an aging family member.

Supervisors will consider reducing the minimum lot size, eliminating areas excluded from having the units, reducing parking requirements and doing outreach to landowners.

Allowing tiny homes

Tiny homes are considered to be less than 500 square feet and include tiny homes on wheels, which the county currently doesn’t allow to be used as primary residences.

Supervisors will consider both allowing those and allowing tighter density for tiny home subdivisions, as well as reducing restrictions for tiny homes as accessory dwelling units.

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Monica Vaughan: 805-781-7930; @MonicaLVaughan