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Op-Ed: Encouraging Second Units Would Help Solve Housing Issue

The most noteworthy words in the city's draft housing element that are "critical decisions occur at the local level." Government could give property owners a break on fees for second units.

Housing elements provide communities with goal driven strategies that ensure cities create zoning for housing that will accommodate people whose income ranges from extremely low, very low, low to moderate. Housing elements work in conjunction with a city's general plan.  Novato is currently updating both its housing element and general plan. 

Novato is providing a housing element update that redesignates affordable multifamily housing as buildable in densities of 20 units per acre.  This is the single most important objective of the draft housing element.  If it is approved it will provide Novato with a level of local control that maintains the character and integrity of existing neighborhoods while making the creation of affordable housing a fiscally sound proposition.

According to Novato's 2009-2014 draft housing element: 

"Housing element law recognizes the most critical decisions regarding housing development occur at the local level within the context of the periodically updated general plan." page 2 Draft Housing Element 2009-2014 ..." 

The most noteworthy words that are in this document are "critical decisions occur at the local level."  It voices what everyone in our community wants — a basic say as to what is built in our neighborhoods, in our downtown, in our shopping centers, in our business and commercial districts and throughout Novato. 

There are obstacles to passing a housing element with fewer than 30 units per acre of multifamily housing. We will be under scrutiny by HCD as well as agencies such as Public Advocates and Marin Fair Housing.  It is up to us to prove that we have satisfied every law and every objective throughout this document.  It would be helpful if the city could tell us what nonprofit groups were involved in the process of creating the housing element and which ones have threatened litigation as a means of controlling density or any other objectives. We need to challenge the misperception that affordable housing equals high density housing.

If the planning department can equalize issues between residents and developers and between Novato and other cities in Marin then our housing element and general plan would function with a greater appreciation for the financial circumstances of the majority of Novato's residents.  For example, when a local resident attempts to build a second unit on their property it is critical that they are given the same permit discounts and streamlining that apply to nonprofit housing developers. In Novato fees for second units are excessively high. The income of Novato residents is modest by comparison to their southern Marin neighbors. This fact is commented on repeatedly throughout the report including lower overall market rate housing costs in mortgages and rentals. We need the ability to take care of our aging family members, help our adult children, support our disabled family members and provide housing for ourselves. If costs can be cut for developers then surely they can be cut for residents.

The housing element provides a list of quantified housing objectives and housing goals, policies and programs. Some are in favor of developers and nonprofits while others favor residents.  By and large the distribution supports the efforts of nonprofit housing developers in order to satisfy HCD.  It is important that we clarify with the planning department whether objectives, goals, policies and programs are the equivalent of mandates. If we give up local control particularly in environmental review, design and long term project management then we are left with projects that may cost us our neighborhoods.  We need reassurances that this will not be the case. 

Overall the draft housing element concludes that we can meet our regional housing needs requirements for 2009 through 2014, that our planning and building fees are comparable to other cities in Marin, but that our impact fees, sewer and water hookup fees need to be reduced in order to make housing development feasible for both developers and residents.  The city proposes to work with the sanitary and water district to find ways to reduce or waive fees for developers.  Could the city do the same for individual residents who would like to build second units on their property? Helping individual residents succeed in caring for our aging and disabled population is as important as supporting the development of affordable housing by nonprofit developers. If the city can see the individual as a valued partner, then we can work together toward common goals.

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Bob Ratto October 15, 2012 at 08:38 PM
Tina Totally agree with this perspective. Novato has taken a pretty hostile approach at times to second units done by homeowners, while at the same time openly welcoming developers (often waiving/reducing fees); further, developers that are euphemistically non profit do not pay property taxes, while homeowners who develop second units receive a revised property tax bill before the paint color is picked out. I distinctly remember back in 2005 when we added on an outbuilding (my office/bathroom/spare room)-that if installed a kitchen and the City found out-we would be fined $35k...a pretty shocking figure
Tina McMillan October 16, 2012 at 05:51 AM
Bob Don't know if you were able to attend tonight's planning commission meeting but it was a huge surprise to find out this draft element is going in as written, on Friday. Jay Strauss was contained but clearly outraged when he found out that there would likely be no changes until the state responded to the draft. In addition, SUNN member, Katie Crecelius, spoke and SUNN has already submitted a complaint to HCD that insufficient housing is being zoned to meet the community's needs. It's like getting stabbed in the back when you go out of your way to make multiple concessions to AH developers and it is still not enough! Many people spoke. There were families from Clausing Ct. who are near one of the sites listed. They made strong arguments that increasing traffic on their street by adding even moderate density housing is out of character with the existing neighborhood. The voices raising concerns outnumbered those asking to increase AH. I can't believe the higher ups in the planning department waited this long to allow public comment with no intention of even acting as if they would integrate it into the report. This should have been done in June, with three months to take in comments and give local residents a voice. Could the problem have been Anne Cronin Moore? Though I am disappointed in the planning department, I am far more frustrated with Crecelius and her ilk for making what could have been a collaborative effort a combative one.
Harry V Lehmann October 16, 2012 at 06:42 AM
Development dollars and tax transferable tax credits drive this, with the zealots merely playing the Pips to Katie's role as Gladys Knight. The whole scientifically unproven wild dream about pollution being avoided through high density housing was foisted upon an unsuspecting and trusting public by a state Senator who has been in housing developers' pockets all along. We wouldn't have the homes we enjoy, owned, mortgaged, or rented, if it were not for contractors and developers, this isn't about developers, as a broad class, rather our focused attention is needed on the class of housing developers who get one dollar of tax credit, stress "credit" for every dollar spent, even if that spent were borrowed. Not only are the profits from housing Project sales tax free, but the huge remainder of tax credits, post sale, are funneled back to the original investors, amongst the tax free super-rich. Not that I mind rich, but for some money becomes a materialistic obsession, and we are now seeing great loss of community to money obsession. I agree, this could have been done, as we tried, many of us, in a cooperative way, but it remains polarized. Sure, letting go of second unit fees is decades overdue. Sure, building 20 unit complexes, thereby giving the residents a real chance, could make great sense. Neither approach is favored by the macro developers, because their huge profits need high density, where quality of construction and quality of tenant life are a low priority.
Bob Ratto October 16, 2012 at 02:34 PM
Tina This is very disappointing. If the report is indeed going in as prepared, then the whole point of the meeting (gathering public input) was obviously meaningless, and public input is being given short shrift. Kind of reminds me of the Plan Bay Area meeting at the Civic Center a few months ago, which was ostensibly to gather public input, but which was truly a Delphi meeting. Just lovely that SUNN has already filed a complaint to HCD-a group now headed by a guy fired by Rahm Emanuel in Chicago for credit card abuse...perhaps MCF can give him his own Black Amex card (that's the one with essentially no limit, which coincides with what these liars state is the real housing need). Very disheartened by this
Al Dugan October 16, 2012 at 04:03 PM
Well said. You have perfectly articulated the root cause of the problem. The high density affordable housing quantified by the flawed SB 375 is nothing more than a smoke screen for tax free investments.
Al Dugan October 16, 2012 at 04:10 PM
Bob, I was there an it was nothing more than a "we had a meeting with the community" check the block and the train is leaving the station. Even more shocking is the city council does not review and approve the draft before it is sent to Sacramento, with the Planning Commission getting a "drive by" look and their extensive comments review in 20 minutes, no kidding 20 minutes, so the draft can be sent. I think the proper terminology is the "bum rush." Clearly there were several very frustrated Planning Commission members with this process obviously driven by the city manager.
Trish Boorstein October 16, 2012 at 05:07 PM
I'd like to know who orchestrated the format and the timing of these so called "workshops", obviously this process was not meant to work with the community. Yes, it was stated last night that this Housing Element was started over two years ago with the Ad Hoc Working Group and other meetings, however, some of the content on the Draft was never even discussed during the Ad Hoc Group. Worse yet, the community has the right to weigh in on this process during anytime along the way. There better not be anything legally binding that the community will not be able to change when HCD returns the Draft. Meanwhile let's all use this 60 or 70 days to become very educated about "our" Housing Element so that we can be prepared to continue a collaborative analysis.
Emily October 16, 2012 at 07:24 PM
I went to the meeting last night and spoke on behalf of my home and community. The council members seemed to push the blame for the sites chosen on the City Council and the problems they were having onto Sacramento. The woman on the committee at the end of the public comments section stated there was an AdHoc committee set up two years ago and verbally spanked the citizens in attendance for airing their ongoing views. Pardon me, I did not live in Novato then and this was not an issue when I bought my home on Clausing Ave. I appreciate the effort but not the insult. I still don't understand the rush to get this document out when it is not due for a few months. I feel there is a huge hidden agenda by the city. I am furious.
Dave Robertson October 16, 2012 at 07:59 PM
As an investor who owns a number of interests in "high density residential properties (albeit - not "around here"), I find your statement inaccurate and quite biased. Investing in any form of high density real estate is not as profitable as one would think, and are made as purchases in LP's, LLC, etc. - where any profits are taxed at full individual "pass-through" rates. Many reinvestment costs (improvements) are taken directly from profits and never fully recovered. Most high-density developments are used as long-term housing for average consumers - so there is much need to maintain the properties and remain competitive in the marketplace. Investors do not always look for huge profits; and they are certainly not "tax free super-rich". There are only a handful of people in the country that qualify for that label. For 99.99% of them, this is all basic business. You may 'not mind rich', but that is an easy term to throw around in todays obsessive political climate to divide this country. I frankly never see money obsession amongst any groups other than the ones who are looking to get something for nothing. Investors are generally much maligned for a problem they didn't invent nor do they actively have a role in.
Bob Ratto October 16, 2012 at 09:17 PM
Dave http://www.youtube.com/watch?v=-1gqU2uy8Vk This may prove helpful, or you may already be aware of this. I can't speak for Harry L, but I think he was trying to make the point that these aren't "typical" development/financing arrangements (which would be fully taxed as you correctly point out)...this is a completely different animal. Here is a look at Eden Housing 2011 financial statements...http://www.edenhousing.org/library/2011AnnualReport.pdf it is on the last page...since you are an investor, I think that you would agree this is not a typical looking financial for an investor...
Tina McMillan October 17, 2012 at 01:48 AM
Emily If you were part of the Clausing Court families my heart goes out to you. I thought the statements made by everyone in the neighborhood were a needed reality test in this situation. There is a neighborhood association called Novato Community Alliance. Many were there last night. Some of us live near the Square Shopping Center, others throughout Novato. http://nca4bh.org/ncasite_j17/index.php/en/ Here is the website and contact information. If enough Novato neighborhoods are truly allowed to participate in this process then we can shape any development to reflect the character of the existing neighborhoods. However this requires the cooperation of the city and the local advocacy groups like SUNN. Katie Crecelius also spoke last night and apparently felt there were not enough sites and that density could be increased based on the density being use for market rate projects. SUNN can make it very difficult for HCD to approve the housing element if they use their power and money. They received $80,000 last year from the Marin Community Foundation to promote the development of affordable housing throughout Novato. Katie is herself an affordable housing developer. Ensuring the safety of any housing built in Novato needs to be the number one goal of our city government. Jay's suggestion that we zone the Birkenstock site was the best one I heard last night. Thank you and your neighbors for comming to the meeting and speaking out.
Tina McMillan October 17, 2012 at 02:13 AM
Dave Can you explain what you mean? From what has been described non profit affordable housing developers create high density housing that secures buildings that do not pay property taxes and based on the recent housing element that will be streamlined (go to the head of the line) once they commit. They will also be allowed to avoid all charges associated with second units and once approved recieve lower cost or no cost hook ups for water and sanitary. It looks to me like if you had a combination of market rate properties and low income properties you would be able to offset the profit from one by the other. I know this is overly simplistic which is why I am asking you to explain what you mean. My concern is that Novato's tax base is already so low that are schools don't even qualify as basic aid. We have struggled for years due to this fact. Even when Carrie Mazonni went to Sacramento she was not able to do anything to change this. I agree we need a diversified housing base but would rather see market rate investors who pay property taxes create housing in conjunction with the city that has rules that protect both residents and neighborhoods. I also think Novato would be a great place to develop a range of housing option for seniors from independent living to assisted living to skilled nursing. There are too few choices and growing aging population that will need help. We almost lost our senior dementia daycare due to funding cuts.
Emily October 17, 2012 at 04:23 PM
Thank you Tina, I will be contacting them. I heard Katie speak and while she had very valid points in her statements most of the dilemmas she spoke of were what every person in this community faces. Tough commute times, lack of time with their family due to distance, it was a speech I could absolutely relate to.
Tina McMillan October 17, 2012 at 05:05 PM
Emily Your right, it is a situation that applies to most families but when SUNN member Katie Crecelius speaks about it she is only referring to families whose income places them in the affordable housing category. Most of the families I know that have moderate incomes make long commutes from Novato to SF or the East Bay every day to afford their Novato homes. The fact that we do not take into account the sacrifices made by all families in order to live in communities like Novato seems to be missing from this debate. I know people who would like to live in Mill Valley in order to reduce their commute but they bought a home in Novato because they could afford the mortgage. I do not believe the Bay Area will ever completely match jobs and housing and that focusing on this single issue with regards to climate change is a red herring used by SB375 proponents to fund infill development. When you go to the NCA site there are articles that explain how this issue became a regional and state rather than a local issue. Last night I looked at a map of your neighborhoods. If they keep the Landing Property on the list please talk with Pat Ecklund about the impact of traffic. I think it is a viable complaint and am worried that without EIR or CEQA review that it would not be addressed. It is a confusing report and a lot of it still remains unclear.
Dave Robertson October 17, 2012 at 07:31 PM
Tina, I am talking about high density housing generally that involves large buildings starting at 50-100 units. In larger cities, they can easily go to 1000 units. A few condo's or townhouses scattered about are not profitable for anyone in the former category. I only deal with larger properties, but I will explain what my take on this is. Property taxes and the cost of hook ups for water and water and sanitary are the least in the equation. If you build a large multi-unit structure, you have put out a great deal of money that becomes totally illiquid. Building costs are so high in most cities, that companies are buying existing "normally priced" units rather than build new ones. It will take years to start earning money on your investment - during very uncertain times. Yes, rents are up, and that makes rental properties profitable - but those profits are still limited and with great risk. Building in San Francisco would be worth the risk, but I cannot see how building in an outer suburb like Novato can be. Then you have the "low-income" housing factor. If it's elderly ... great ... they make good tenants. But the other types of "low income" tenants can be far more difficult. This is the reason people worry about high levels of crime in these areas. Frankly someone would have to be out of their mind to build a decent sized piece of low income housing given all the risks.
Dave Robertson October 17, 2012 at 07:43 PM
The whole issue of "low income housing" is a nightmare - and Novato needs to stand up and say "no". The South Bay and peninsula can absorb a few units because there is lots of value down there - as can the east bay. Marin is a different story - as it is really a series of commuter towns (of varying incomes). Densities here are low to begin with. Adding high density housing may sound socially correct, but it harms the current value of homes and condos that people have worked hard for and worked hard to keep during this recession. The question becomes, "do we sacrifice our long-term residents to assist new low income residents?" The answer is no! We should make exceptions for elderly housing, because that is something that is simply right to do. But to take a city where people are struggling to make ends meet and put even more stress on their most valuable asset in the midst of these times is unconscionable. It seems so obvious that it is not right to harm long-term residents, but our city insists on taking these demands seriously. Over the past 10 years, Novato has less and less become the type of city that one wants to live and grow old in. Sorry, but this is a "lifeboat" situation - and needs to be treated as such.
Tina McMillan October 17, 2012 at 08:03 PM
Dave Thanks for clarifying. If you take a look at what has been built in Novato it comes with funding through Marin Community Foundation, the RDA (now closed), the city, and Non profits that are now in the business of building housing for the poor and needy. In many respects I agree with your comments but I also know we must provide a draft housing element capable of certification in order to move forward. I think it is important to provide community members with alternatives because so many of us have had either aging parents in need of assistance or adult children who return home due to the economic climate. Since we cannot guarantee what will be built where we need to encourage the development of housing that meets this need. Homeward Bound just posted information about Oma's Village and from all reports it is going in at fewer than 20 units per acre, it will have ongoing education and support for families in need of permanent housing with a transitional emphasis. I am encouraging everyone with a stake in this to contact the city, the council and HCD to say Novato does care for its poor and needy. This is essential to counteract the letter written by SUNN saying that the current housing element is not doing enough.
Dave Robertson October 18, 2012 at 04:37 AM
Tina: Thanks also. It is definitely a problem with aging parent, and adult children returning home is also an unfortunate problem. But we have to draw the line somewhere in this state when it comes to excessive spending. While many Californians are liberal and want to help everyone out, the often forget that general funds are short and pathetic measure like Prop. 30 always run out of "other people's money". Novato may not care for its poor and needy, but it doesn't excuse it for failing to care for it's long time residents. Perhaps I am used to these things in other cities and states, but the key to financial solvency is for cities and states to do what they can do - no more. The whole Bay Area housing initiative is out of line in 2012, as there are so many "middle class" residents in housing distress (underwater and foreclosure). We need to take care of "regular" residents first! Everything else now has become excessive. There are so many people who are stuck in their homes in this town, that it is not fair to make matters more difficult for them. Yet when do you ever hear of the City Council's concern for the average Novatan? Never! Frankly of our governments want to do some good, they might want to look to their current residents.
Al Dugan October 18, 2012 at 04:55 AM
Well said. The city has to take care of the residents that have lived here for years and worked hard to buy and keep their houses. How that has been pushed to the backseat make no sense. Unfortunately, the money to fund politicians does not come from long term residents so, they are left in the cold.
Al Dugan October 18, 2012 at 05:27 AM
Sucient and well documented. For people that make big money these are off the chart tax credits. That why the triad, developers, builders and institutional investors are chomping at the bit that work so well. As always, follow the money.
Tina McMillan October 18, 2012 at 05:40 AM
Dave I think we are on the same page with regard to fiscal reform and the need to refocus the city on existing programs. Outside of in lieu fees I don't know where they are going to come up with matching funds for AH projects. The closure of RDA's was significant. Now if we could only address the inequities due to spending beyond our means for such a long time. This draft housing element was a start. However, groups like SUNN have a different idea of what it is to provide for Novato residents. SUNN sent a letter to HCD complaining Novato has not done enough. Katie Crecelius one of SUNN's founding members has close ties to HCD and the affordable housing community. There appears to be no room for compromise with SUNN members. They have thrown Novato under the proverbial bus.

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