• GUEST OPINION

      Below is a joint Op-ed by Pasadenans Organizing for Progress (POP) and Greater Pasadena Affordable Housing Group (GPAHG) regarding amendments to the Inclusionary Zoning Ordinance that will increase the quantity of total affordable units to be built in new developments.

      A newly constructed building with a pool

      The Westgate project (Photo – Pasadena Housing Department)

      The Pasadena City Council will be deciding on Monday, August 19 to amend its Inclusionary Zoning Ordinance to provide for the building of more affordable units for low income families throughout the City.

      By Jill Shook and Ed Washatka

      What the council will consider will be the first major changes to an ordinance passed in 2001 when the Council had the foresight to pass a law stipulating 15% of all new housing was to be set aside as affordable for residents who earned less than or just modestly above the area median income.  Today, that translates into annual income between $36,600 to $88,000.

      Since then, Pasadena has been successful producing affordable housing.  So successful, in fact, that it was awarded the Ralph C. Larson Housing Policy Leadership Award in 2014 for having one of the most outstanding housing policies in the nation.

      Over the past two decades, those policies have produced 577 affordable units for very low, low, and moderate income families as defined by the state. An additional 690 affordable units have been either produced or preserved by leveraging $26 million of in-lieu fees. Such fees may be paid in lieu of including affordable units although most developers opt to include the units.

      Even though criticized by some as potentially stunting developer profits and slowing development, the ordinance has not curtailed growth.  Quite the contrary – housing construction continues at a brisk pace.

      Demand for more affordable housing is ever increasing. Since the vast majority of new housing construction today is aimed at market rate rents of $2,500 – $3,500 for a 2-3 bedroom unit, there is a need to accelerate the supply of affordable units for lower income families.

      Last year, the City Council wisely directed the Planning Department to investigate how the inclusionary zoning ordinance could provide a greater percentage of units designated for lower income households.

      The Planning Commission voted July 24 to make the following recommendations to the City Council.

      1. Increase the base inclusionary set-aside to 20% of base units for very low-, low- and moderate-income families;
      2. Offer concessions from a pre-approved menu in exchange for additional affordable housing up to 25% or more;
      3. Eliminate “trade-downs” which reduce the overall quantity of affordable units; and
      4. Increase the inclusionary zoning in-lieu fee.

      The Planning Commissions recommendations are based in large part on the work of AECOM, a engineering firm retained by the Planning Department to provide consulting services. AECOM conducted a market study and feasibility analysis to explore a number of scenarios should Pasadena require developers to increase the quantities of affordable units in future developments.

      Their study reveals that it is economically feasible for developers to set aside at least 20% of all new housing as affordable and achieve returns of 10-12% return on costs (an industry benchmark).

      The Greater Pasadena Affordable Housing Group (GPAHG) and Pasadenans Organizing for Progress (POP) have been meeting with staff in the City’s Planning and Housing departments, talking with developers, and researching the economic viability of increasing the percentage of new low income units beyond 20%.

      Phil Burns, an accredited city planner and GPAHG member, created a separate financial model using the same AECOM data. Burns’ model indicates that developers could realize the same 10-12% return on costs while building at least 25% of units in new developments for low income families.

      To achieve this higher percentage of affordable units and the same financial returns, the City could offer a combination of concessions and incentives such as easing parking requirements, expediting permit processing, and/or providing a density bonus of 10-20%. All of those options were noted in the AECOM report.

      If Pasadena is to meet the Regional Housing Needs Allocation (RHNA) targets set for them by the Southern California Associations of Governments, the City needs to up the percentage of affordable units for low income families to at least 25%.

      Currently, Pasadena has only met the targets for above moderate income families.  In fact, they have exceeded that higher income housing mark by 374% while lagging behind in building lower income units.

      According to the Planning Department report of June 26, between January 1 and December 31, 2018, only one permit was issued to build a very low income unit–the remaining 535 permits were issued for above moderate income families.

      These are gross discrepancies.

      Eliminating the “trade down” polic as recommended by the Planning Commission will help curtail this behavior The “trade-down” permits a developer to build 11% very low income units (as opposed to the full 15%) in exchange for a density bonus which is used to build more market rate units.  These actions result in fewer low or moderate income units being built in indicated in the  table below.

      The following table summarizes Pasadena’s 2014-2021 RHNA Unit Targets by income category and the building permit activities since 2014:

      Income Category% of Area Median Income (AMI)Target Units 2014 to 2018Building Permits Issued 2014-2018Total Target Units Remaining
      Very Low<50% of AMI340145195
      Low51-80% of AMI20738169
      Moderate81-120% of AMI22445179
      Above Moderate> 120% of AMI56121000
       Total1,3322328543

      Area Median Income (AMI) for a family of 4 is $73,100 as set by US Dept of Housing and Urban Development and published by California Department of Housing and Community Development.

      As seen in the table above, Pasadena is on the way to having a glut of market rate housing that the 50% of residents who make less than the area median income cannot afford.

      Fortunately, more affordable housing is within our reach.

      The City Council will hear a report from the Planning Department on the Planning Commission’s recommendation at its regularly scheduled council meeting on Monday, August 19.

      Getting the Council members to vote YES will take phone calls, emails, and public comment if we are to convince them to amend the Inclusionary Zoning Ordinance to build more affordable housing units.

      Jill Shook is Chair of Greater Pasadena Affordable Housing Group (GPAHG) and Ed Washatka is Chair, Housing Justice Committee of Pasadenans Organizing for Pasadena (POP). Phil Burns and Zac Riggs of Greater Pasadena Affordable Housing Group contributed to this article.

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