• David Loya:  First, folks have been confused about what we mean when we use the term affordable housing. In particular, when the term “market rate affordable housing” has been used.

One reason people are confused is because there’s been a lack of definitions. For a discussion on this, see the article:  What are the definitions of Affordable Housing?

The term “market rate affordable housing” that David Loya uses is another one of his phrases that does not make sense, at least not for us here in Arcata. In theory, in some locales, “market rate” housing can be affordable. But here in Arcata, what is being charged as market rate is not considered affordable to typical working people. So the reason that “folks have been confused” by David Loya’s use of the term “market rate affordable housing” is simply that this does not exist, and David Loya keeps maintaining that it does exist, or will exist. Housing is either “market rate” or it is “affordable” — but not both, at least not around here.

• David Loya:  The term “affordable housing” is perhaps one of the most enigmatic of the terms of art that we use.

Yes, the phrase “terms of art” is in the original document. Definition of “enigmatic” as:  Difficult to interpret or understand; mysterious.
This sentence can be re-written as: 
“The term “affordable housing” is perhaps one of the most mysterious and difficult to understand of all the terms of art that we use.”

Well, how about making affordable housing less mysterious for us?

• David Loya:  It is important to note that all of these definitions and programmatic applications lose sight of the way we experience affordable housing at the household level.
  [Affordable Housing] means something different at the programmatic level than it does at the household level. At a personal level, the programmatic determination of rent may or may not be affordable.

What David Loya seems to be saying is that on the one hand we have the “programmatic level” of how affordable housing is designated. That’s the bureaucrat’s version of how life is supposed to be — the statistician’s version, the bean-counter’s approach.

A discussion of the “programmatic level” is necessary, so we can understand how funding and subsidizes come from the State and Federal government. But if indeed “all of these definitions and programmatic applications lose sight of the way we experience affordable housing at the household level” as he says, then how about creating a real and honest version of “affordable housing” for the people living in Arcata?

And, by the way — it is not the “definitions” that lose sight of the way we experience affordable housing. Definitions and applications don’t lose sight of anything. It is the humans behind those definitions and applications. It is Arcata’s Community Development Director who has lost sight of what affordable housing is.

• David Loya:  When we use terms such as market rate affordable, we generally mean that the units will be on the lower cost end of the spectrum based on their size or configuration. This term is not intended to imply that there is a restriction on rent, nor is it intended to imply that it equates to 30% of a household’s income.

So: “Market rate affordable” means that the units will be on the lower cost end of the spectrum, according to David Loya. In the real world, this does not seem to be the case necessarily. Market rate will essentially be what the market can bear. Market rate apartments may well be at the higher end of the spectrum, as they represent newer additions to the rental marketplace.

• David Loya:  Staff anticipates that the full range of restricted and unrestricted affordable units will be developed in the Gateway Area, as well as in other areas of town that will be more attractive for housing development with the updated General Plan.

We are told that staff “anticipates” this. But there is very little proof offered in the Gateway Plan. And I have zero confidence that this will indeed occur. The “full range” of affordable units? There is no mechanism to provide workforce housing. None.

• David Loya:  Housing cost either impinges on your ability to meet your other budget obligations, such as food, utilities, health care, and the like, or it doesn’t. When it does, the housing is less affordable. When a market excludes you on cost, it is unaffordable. When it does not, it is affordable.

And here we have David Loya’s definition of affordable housing: When a market excludes you on cost, it is unaffordable.
This is an entirely circular statement. Other ways of saying this — and I’m being silly here, because the David Loya statement is silly:

• • • If you cannot afford to live in Arcata, that is because the rents are unaffordable.
    • Housing is considered to be unaffordable if you’re not able to pay it.
    • If you cannot afford to pay rent because it is too high, that’s because it is not affordable.

Could we please have a definition that is not self-referential? Please. I am asking for a definition of affordable housing that does not rely on its own definition in order to define itself. 

• David Loya:  The feasibility of higher density projects will rely in part on providing higher cost options that are affordable to moderate- and above moderate-income families.

What is being said here is that the feasibility — that is, the likelihood that they will happen at all — of new apartment buildings will rely on providing “higher cost options.” That means the higher-cost apartments will allow a blend of apartments to exist.

That may well be the case. But let’s be honest. Those “higher cost options” will not be affordable to moderate-income families. 

To say that the higher-cost apartments will be affordable to moderate-income families is misleading, unbecoming of a Community Development Directory, and quite simply false.

• David Loya:  While there are many ways to consider which real estate investments are financially feasible, if the projects do not have a reasonable capitalization rate, which considers the revenue generated in relationship to the market value of the project, and the return on the investment does not net positive, the projects will not be developed.

We’ll ignore the grammatical issues within this sentence. What is expressed is certainly true.  If a developer cannot make an appropriate profit on constructing an apartment, that project won’t get built. That’s simple and known. 

What is left out of this equation, however, is whether it’s possible to build workforce affordable housing and have the project be profitable. In today’s economic realities, with all the very many high costs of developing and constructing a new apartment building, it seems that it is not possible — or not without a “thinking outside of the box” approach.

David Loya has described the problem. But he has not offered solutions.

• David Loya:  Gentrification theoretically raises rents on existing housing as investment in an area increases the desirability of that area.

No, gentrification does not “theoretically” raise rents. It actually raises rents. That the area becomes more desirable is one cause. Another is that area landlords, once they see that higher rents are possible, will raise their rents. Why? Because that it is how “the market” works, as David Loya has told us. And it’s true. In Arcata, when rents have gone up with one landlord or with one project, rent prices in general have also gone up. And we can fully anticipate that tendency to continue.

• David Loya:  The reasoning goes, the provision of new units that are unrestricted and built for higher income families combined with the area affect on existing rents [Ed. note: should be “effect”] forces existing households out as they are priced out of the market.
• David Loya:  There have been several studies trying to assess the relationship between housing development and gentrification.

  A study by Stanford University researcher recently found gentrification disproportionately affected minorities. 

“There have been several studies” ?  More like several thousand studies on the relationship between development and gentrification. One Internet article found close to 9,000.

Studies about gentrification tend toward its effects in larger, more urban areas — and in cities where there may be distinct lower-income neighborhoods where people can move to if they are forced out. People who want to live in Arcata do have some options of instead living in Eureka, McKinleyville, Fortuna, etc. — and not have walking or immediate biking access Arcata and the university. 

David Loya likely did not read the article that is connected to this link of the study by the “Stanford University researcher.” The link goes to an article about the study and not the study itself, and the study was done with a co-author from the Federal Reserve Bank of Philadelphia. The information in the article is not particularly relevant to our situation in Arcata. The study was of residents of non-Black gentrifying areas versus Black gentrifying areas in the city of Philadelphia. 

• David Loya:  But the causes of mobility among lower-income households is difficult to link directly to new investment, and policy decisions can impact the effect of new investment on lower-income populations. While some studies have found a weak relationship between housing production and displacement caused by increase rents, most research reveals myriad related policy factors that have an impact on the outcomes of new development.

My take on studies and articles is that, while interesting, they just are not relevant. First, the studies are on cities that are large and with their own set of issues and difficulties. The pressures on growth and gentrification here in Arcata are unique:

• • • A combination of Cal Poly Humboldt growth (more than doubling)
    • The increasing ability for higher-paid workers to work from remote non-office locations.
    • What we call “climate-change refugees,” as people leave areas to the south of us that are more prone to fires, need for air-conditioning during hot spells, and water shortages from drought.
    • Very high housing costs in other parts of California, making a $600,000 house here seem cheap by comparison. This has been going on for decades here. In contemporary prices, if a person can sell a home in San Jose for $1.3 million and buy here for half of that, it’s a viable economic retirement option.
    • Our beaches and outdoor activity attractions.
    • Fewer people. More relaxed lifestyle. Theoretical less susceptible to a pandemic.
    • The recognition that it is nice here!  We know this, and now other people are finding out too.

David Loya’s staff report on Affordable Housing and Gentrification does not discuss any of these acknowledged pressures. He’s mentioned some of these in the past. But in this staff report for an actual Planning Commission agenda item on these hugely important issues — he says nothing.

• David Loya:  The Gateway Area Plan addresses the possibility of displacement in several ways. First, there are policies to protect existing residents.

What policies are in place to “protect existing residents”? I don’t see any. David Loya says that they are there, but does not call them out or specify them. Where is there a single policy that protects existing residents? 

• David Loya:  These policies are backed up by programs to assist relation [Ed. note:  relocation?] where necessary.

There is talk of programs. But who wants to get money to relocate … as opposed to being able to stay where you are? Reader, I ask you: If you were a renter whose rent went from $1,200 to $1,800, thus forcing you to leave the city of Arcata, would a sum like $4,000 help with your dislocation?  Of course it “helps” — but the overall result is the same. You are not living where you want to live. Relocation assistance is a poor substitute for proper planning and consideration of existing residents.

• David Loya:  These are best practices recommended by the research to prevent the negative impacts of new investment.

Forget “best practices recommended by the research” done in Philadelphia, San Francisco, Los Angeles, cities in the Mid-West. We are here in Arcata, with our unique set of circumstances. We can anticipate the trend of housing costs, based on the factors currently at play here. In my view, if this the “best” that our Community Development Director can come up with, then we need a different Community Development Director.

David Loya: 
“This has produced a plethora of one-bedroom and smaller Accessory Dwelling Units and apartments, or income restricted units.

 

This development pattern is currently excluding sectors the community needs to thrive.“

 

Comment:
This statement is one of the few truthful and to the point statements in this entire staff report.

• David Loya:  The current supply of housing units is not able to meet the current demand.
  We are lacking in a range of housing types, but the missing middle workforce housing is hit particularly hard, as is higher end offerings.

• David Loya:  The City has predominantly seen production of low-cost, low-investment, market rate affordable housing for small households and subsidized affordable housing projects over the last ten years. 

If by “low-cost, low-investment, market rate affordable housing for small households” David Loya means the 182 one-bedroom apartments on Foster Avenue built by Kurt Kramer and Steve Stombeck” — these are market rate, and not necessarily affordable. They are indeed “low-cost, low-investment” for the developers. And I guess “for small households” is the current euphemism for a one-bedroom unit.

• David Loya:  This has produced a plethora of one-bedroom and smaller Accessory Dwelling Units and apartments, or income restricted units. This development pattern is currently excluding sectors the community needs to thrive. 

• David Loya:  Furthermore, the policy decision balances that fear the future investment will displace current residents against the reality of the extant and very real housing crisis.

This is more of gobbledygook from David Loya. The “policy decision”?  What policy decision? What balance?

• David Loya:  Staff suggests the risk of future gentrification pales compared to the dire current housing need. In particular because there are policies and programs to prevent wholesale gentrification in the draft plans.

David Loya is saying that supplying apartments for the housing crisis is more important than the risk of displacing current residents because of rising housing costs.

And — these policies and programs to prevent gentrification:  Where are they? Can we see them?