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To the Planning Commissioners and Staff:
The report that is attached here is a starting point for a conversation on “What is Affordable Housing?” At the Planning Commission study session on February 11, 2023, David Loya said “We’re going to have an agenda item on affordable housing.” Vice‐Chair Scott Davies said “I think I think that is the piece where the rubber meets the road for the things we
want as a Planning Commission and the things that everyone in the audience thinks they want. Because I think there’s a disconnect between our collective stated goals about building affordable housing.” One concern at this time, with the discussions about Community Benefits – both options and requirements ‐‐ is to what extent these may add to the cost of the project, and have the effect of increasing the rents. Thank you for your work on helping to maintain and create a great Arcata.
— Fred Weis
What is Affordable Housing Page 1
Planning Commission – February 28, 2023 Fred Weis –
What is Affordable Housing?
At the Planning Commission study session on February 11, 2023, David Loya said “We’re going to have
an agenda item on affordable housing.” Vice-Chair Scott Davies said “I think I think that is the piece
where the rubber meets the road for the things we want as a Planning Commission and the things that
everyone in the audience thinks they want. Because I think there’s a disconnect between our collective
stated goals about building affordable housing.”
One concern at this time, with the discussions about Community Benefits – both options and
requirements — is to what extent these may add to the cost of the project, and have the effect of
increasing the rents.
This document can serve as starting point — to get your input and continue this conversation.
Definitions of the word “Affordable”
First, we need to define what we are talking about.
The word has been used to mean four different things by Staff, Commissioners, and speakers at
the Planning Commission and Council level. I think it’s a complete misrepresentation to call an
apartment “affordable” – when what is meant is that it is less expensive than other apartments.
That does not make it actually affordable.
To get the conversation going, here are four definitions (at least four) of the word “affordable”
– as I’ve heard the word used by Staff and the Planning Commissioners. The Commissioners
may want to modify or add to this list.
1. Deed-restricted affordable.
There are strict guidelines on this. Often set at 50% (very low) or 60% of median income
levels. An example is the Sorrel Place apartments on 7th Street.
2. Affordable by federal guidelines.
Rent + utilities not more than 30% of gross (pre-tax) income.
We can also call this “Workforce Affordable” or “Affordable for the Missing Middle.”
We can base this level of affordability on the notion that someone with a job who is
earning $20 or $25 an hour should be able to be able to find and have housing.
As an example, $25 per hour is $4325 per month and $52,000 per year, pre-tax. Taking
30% of that is $1270 for rent and utilities, for one person. That $1270 might translate to
$1150 for rent and $120 for PG&E (if the landlord pays for water) or $1050 for rent (if
the landlord does not). (We can note that on an after-tax basis, this is 44% of the takehome salary.) At a $20 per hour salary, the 30% guideline becomes $1015 for rent and
utilities – or about $900 for rent.
What is Affordable Housing Page 2
Planning Commission – February 28, 2023 Fred Weis –
A medical administrative assistant, or a vocational nurse (not a registered nurse), might
earn $19-$25 per hour. So while there are plenty of people who make less than
$25/hour, it can be a starting point for the discussion.
In conjunction with this is using the HUD guideline of 80% of median income as a basis
for that 30% figure. The State has set the 2022 income limits for Humboldt County of
“Low Income 80%” as:
1 person in the household: $43,650 = $1,090 for rent and utilities
2 persons in the household: $49,850 = $1,250 for rent and utilities
3 persons in the household: $56,100 = $1,400 for rent and utilities
4 persons in the household: $62,300 = $1,560 for rent and utilities
If the landlord is not paying for water/sewage, the minimum water bill in Arcata is now
$88. A “reasonable” gas/electric bill might be $100/month on a year-average basis.
3. “Market Price” affordable.
This, of course, is somewhat subjective, but can be agreed upon within a range based on
direct and anecdotal experience. What is considered as “affordable” might be at the
lower end of the market rate. As an example, a 400 sq.ft. one-bedroom apartment, in
today’s climate, might be $1250 plus PG&E, or about $1350-$1400 total. So this is
currently a bit higher than the 30% guideline. This figure can be used as a point of
reference, to gauge a rent that is higher than that point. Example: A 1-bedroom
apartment at a rental price of $1500 would not be considered reasonably affordable by
a typical working person. [Estimated costs as of February-March, 2023.]
4. “Affordable by Design.”
To me, this is a terrible phrase and should be removed from our use entirely. To say that
something is “affordable by design” — because it is smaller than an apartment that is larger, and
therefore the larger one would cost more and the smaller one would cost less — is a misleading
argument. That it is “less expensive” than if it were larger does not impart actual
affordability. Also, what we are talking about is the cost to the developer being lower. There
is no guarantee that the developer will pass that lower cost on to the renter. We can agree that
developers are in business to earn a profit, not to be nice necessarily.
There are two differing definitions of “affordable by design.” One, as has been used by David
Loya and in the draft Gateway Plan, is that a smaller unit, by definition, costs less to construct
than a larger unit.
What is Affordable Housing Page 3
Planning Commission – February 28, 2023 Fred Weis –
But also there is this: “Affordable by Design” occurs when the developer uses innovative design
or innovative construction techniques – and that by using that technique a lower cost is
achieved. Examples would be modular factory-built kitchens or bathrooms, or lower-cost
materials, or quicker construction methods (stacked modular units).
In my view, true affordable by design (by the first definition) comes from shared housing. A 3-
or 4-bedroom, 1 or 2 bath is both 50-60% of the cost to build and 50-60% cost for rent and
utilities, on a per-person basis when compared with one-bedroom or studio housing.
What does the City of Arcata mean by “Affordable” ?
From the City’s SIRP Frequently Asked Questions page, in the SIRP section. (Highlighting added.)
Q: WHAT DOES THE CITY MEAN WHEN IT SAYS AFFORDABLE HOUSING?
A: Affordable housing means one of three things depending on the context. We use the term
1) in relation to what is affordable at the household level,
2) to describe state mandated policy objectives, and
3) within the context of our affordable housing regulatory programs.
Affordable housing at the household level means the household is not overpaying for housing
costs. Generally, housing is considered affordable if the household is paying 30% or less of its
income towards rent or less than 38% of its income towards a mortgage.
From a policy perspective, affordability is defined at the population level. The City’s Housing
Element goes into greater detail, but in short, the City must plan for housing that is affordable
to all economic segments of its population. Housing affordability categories are based on Area
Median Income (AMI), and the City is responsible for providing sufficient land to accommodate
housing for all income levels.
Commissioners:
Is what is stated here being done?
Is the City planning for housing that is affordable to all economic
segments of our population?
Is the City providing sufficient land to accommodate housing for all
income levels?