Burlingame seeks solutions to housing

“We need to find whatever gives us more bang for our buck,” Mayor Ricardo Ortiz said. “We need to help the most families for the least investment that we make.”

Per state law, the city will need to permit 1,889 units of below-market-rate housing by 2032, a task that will likely require subsidies on the city’s part. But the council agreed it should also make protecting existing affordable homes a priority, in addition to exploring ways to increase the supply of inexpensive for-sale homes, not just rentals.

Average rents for a one-bedroom unit have neared $2,400 in the city, a $780 increase from 15 years ago. Meanwhile, median single-family home costs are now $2.8 million, nearly double what they were in 2007.

“We have an enormous demand for entry level home ownership opportunities,” Councilmember Donna Colson said. “When we all bought into Burlingame, and I know all of us have lived here for a long time, you could still buy a house — a home — for $350,000. That was not that long ago, and that same home is now $2.3 million if not more.”

While affordable housing production often focuses on producing low-cost rental units, councilmembers expressed interest in additionally providing ownership opportunities to bolster equitable wealth building opportunities.

“I’m enthusiastic about finding a way to get on an ownership ladder and off the rent hamster wheel,” Councilmember Michael Brownrigg said. “There are really two ways to create wealth in our country, and that is to own a business or own a home, and we’ve made it incredibly difficult for people to own homes.”

Colson said a potential solution that would also mitigate displacement would be to aid those living in “naturally affordable” apartments in purchasing their units. Naturally occurring affordable housing describes often aging buildings where rents are low without deed restrictions found in newly constructed below-market-rate housing. Tenants in such buildings can be at risk of displacement if the building owner decides to sell or conduct major renovations.

The city’s population is majority renters, many of whom live in older apartments that could fit the description. Colson said in these instances the city could aid in organizing a purchase by the tenants. Councilmembers also agreed other NOAH protections should be explored. Other jurisdictions have worked to facilitate the purchase of buildings by nonprofit developers that maintain the affordability of units.

The council agreed such preservation work was worthwhile despite there not being a state incentive to do so. The state mandate to build housing, called the Regional Housing Needs Allocation, only takes into account the creation of new units.

“It’s not going to get us a new number on the RHNA chart,” Colson said. “But if that’s not the main concerns and the main concern is keeping people housed, then focusing on that already-affordable, and making sure those people can stay and don’t get kicked out is better.”

The council also agreed some of the city’s housing funds should be set aside for emergency rental assistance. The funds would likely be administered by nonprofits who could determine eligibility.

New affordable housing

RHNA rules assign housing growth to jurisdictions in eight-year cycles. The current cycle closes at the end of the year, and the following cycle ends in 2032. The city in the current cycle was assigned 863 units, a goal it exceeded by issuing permits for 1,222.

But the upcoming cycle provides much larger allocations. In addition to the 1,889 affordable units, the city will also need to permit 1,368 market-rate units. As Community Development Director Kevin Gardiner explained, the city already has 1,153 units in the pipeline that will go toward the upcoming cycle. The vast majority of those units, however, will be market rate, and providing the below-market-rate units will be a heavier lift.

“There is still a challenge to reach the very-low and extremely-low-income categories,” Gardiner said. “Generally, those categories do take some sort of subsidy.”

The categories he mentioned are designed to offer rents affordable to households bringing home 50% or less and 30% or less of the county’s median income — $134,650 for a family of three. While the extremely-low-income category is not mandated by the state, providing such units was identified as a priority by the council. The state outlines categories ranging from very-low-income, low-income (those earning 80% or less of the area’s median income, to moderate-income (those earning 100% or less of the area’s median income).

Typically, such units are created in one of a few ways. Most commonly, it is included within larger market rate developments as the product of requirements like inclusionary zoning or density bonus laws. The rules require private developers to subsidize the affordable units.

It can also be built by nonprofit developers who specialize in building affordable housing. These developments usually contain larger portions of below-market-rate units offered at the deeper levels of affordability. They also require subsidies, which usually come from the local, state or federal government.

Potential partnerships

Brownrigg said he would like to explore ways to increase the number of affordable units offered by private developers by offering to cover some of the additional costs. He requested to know how much it costs to offer below-market rate versus market-rate units.

“The fastest way to get an affordable unit into the market will be to tag along with somebody who is already building something,” he said. “The problem is, we need to be smart negotiators knowing what that price is, we can’t just stumble in with our checkbook open.”

Other councilmembers, however, questioned the idea, pointing to potentially high costs per unit. Councilmember Emily Beach said she would prefer providing cash to nonprofit developers to help create affordable units.

“I just think that the motivations in the nonprofit sector can be easier to manage,” she said.

Colson pointed to the difference in rent from a market rate to an affordable unit.

“It’s going to be much higher than you think to do a buy-down,” she said.

A developer in South San Francisco recently indicated it would cost $15 million over the course of 55 years to provide 60 below-market-rate units, 40 at the low income and 20 at the moderate income levels.

In addition to income restrictions, councilmembers expressed interest in creating housing for specific groups, like those with developmental disabilities or people otherwise unhoused. In such cases, as Colson pointed out, it’s often “not just the housing, but it’s the support services that go with them.”

“Maybe even it’s just helping our families that have a child who can’t quite live independently … to build an ADU in the backyard for that person to live,” she said. “Maybe we can help fund the permits for that.”

The city will be holding a series of outreach events in coming weeks to gather information from and educate the public on local housing needs. The council will discuss the matter further during a meeting April 24.

corey@smdailyjournal.com

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