See also: 
Gateway Plan needs inclusionary affordable housing requirements

Update:  August 15, 2023

Since this article was published, on June 13, 2023, the situation with inclusionary zoning in the Gateway area has changed.  See the details at the end of this article, here.

What does this mean in real-life terms?

Community Development Director David Loya:
And so project proponents will be driven by the Density Bonus provisions. And our design standards and Community Benefits programs are unlikely to be implemented due to waivers and concessions.

In other words, the City’s inclusionary zoning program is unlikely to be used.

from June 13, 2023

The Goal of Inclusionary Zoning

The long-awaited initial draft of the Form-Based Code finally arrived to us on June 5th, 2023. As promised by Community Development Director David Loya, the Form-Based Code does contain requirements for Inclusionary Zoning apartments constructed in the Gateway Area.

Unfortunately the Inclusionary Zoning requirements that have been given to us in this initial Form-Based Code are ridiculously low. To even call this “inclusionary zoning” is a stretch. This would be laughable except that this is a such serious matter — and so important for the people of Arcata and for the future of Arcata.

What is Inclusionary Zoning?

Inclusionary Zoning is a planning policy that requires a specific share of new housing development be affordable to low-income or moderate-income households. Ideally the affordable housing is mixed in with all the other “market rate” homes in lots of apartment buildings, and not put in its own building. (An example of a 100% affordable housing apartment building in Arcata is the recently-built “Sorrel Place” on 7th Street between I and J Streets.)

It is generally felt that it is better for the community as a whole to have affordable housing not be isolated, and to have people of a variety of income levels living together within a building. Renters should not be seen as being lower-income just because the door they walk out of. 

What is the current Inclusionary Zoning proposal?

In the draft Form-Based Code, it is Section 9.29.050-G. It is found at the top of Page 28 of this draft. This draft can be viewed on Arcata1.com here.  The section reads in its entirety as follows (highlighting added):

G. Inclusionary Zoning. For projects with 30 dwelling units or more, the project provides a minimum of 3 percent of the units affordable to low income households or 5 percent of the units affordable to moderate income households as defined in Chapter 9.100 (Definitions).

We can initially note that this specifies either 3% low-income or 5% moderate-income — one or the other.

[“Chapter 9.100 (Definitions)” refers to (but does not say here) Arcata’s Land Use Code. These definitions can be found in the Appendix to this article, below.]

What is wrong with Arcata’s proposed Inclusionary Zoning regulation?

1. The generally accepted ranges for Inclusionary Zoning are 10% to 30% for lower-income households. This proposal is showing 3% for lower-income households.
2. This proposal allows for 5% of moderate-income housing and still is considered as inclusionary. “Moderate income” is defined as up to 120% of the area median income. These moderate-income inclusionary apartments could be priced for people who are earning 120% of median salaries — higher than what we already have.
3. Many examples of Inclusionary Zoning require that inclusionary housing units be indistinguishable from market-rate units. Nothing is said here on that.
4. Many examples of Inclusionary Zoning require that the inclusionary apartments be the same size, or of an average size, relative to the other apartments. Again, here nothing is said. 
5. Usually there is a length of time specified. This can be 30 years, 50 years, 99 years — that sort of time period. Nothing is said here.
6. It is not specified if the 3% or 5% figure as calculated is then rounded up. We can assume that it would be, but the spec does not say. Example: Suppose there is a 45-unit project. The developer can choose to have either 3% low- or 5% moderate-income. That calculates out to 1.35 units of low or 2.25 units of moderate. Does that round up to 2 units of low or 3 units of moderate?
7. This “Inclusionary Zoning” section in the Form-Based Code is only one sentence long. That seems to indicate that not much thought or consideration has been placed on this very important matter.

What is meant by Low-Income or Moderate-Income households?

The area median income (AMI) in 2022 is $56,200 for a 1-person household, which is a gross hourly wage of $27. A 2-person household is $64,250 ($31 per hour); 3-person is $72,250 ($35 per hour).

“Low Income” is defined as up to 80% of the area median income (AMI) level, adjusted for family size. “Moderate Income” is defined as up to 120% of the area median income (AMI) level, adjusted for family size. 

The 2022 figures for Low-Income for Humboldt County are: 1 person $43,650; 2 persons $49,850; 3 persons $56,100; 4 persons $62,300.

This means a single-parent with two children could have a salary of $56,100 and be considered low-income. That is a gross hourly wage of $27 per hour.

Moderate Income is: 1 person $67,450; 2 persons $77,100; 3 persons $86,700; 4 persons $96,350.

This means a single-parent with two children could have a salary of $86,700 and be considered moderate-income. That is a gross hourly wage of $42 per hour.

Housing (including utilities) is not intended to cost more than 30% of the household gross salary, a monthly rent and utilities for a 1-person household, moderate-income is $1,686 per month.

Some real-world numbers

1. A developer could build a project with 28 “luxury” apartments. By this definition, there would be no inclusionary units required. (It only kicks in at 30 units.)
2. A developer does not have to build for low-income households at all in order to satisfy the requirement for inclusionary zoning. The developer can build for “moderate income” households — that is, up to 120% of the area median income.

   What this implies is that “moderate income inclusionary” housing could be built for people with higher incomes (i.e. 120%) than the incomes of current renters. How does this help us?  It doesn’t help.

3. By these numbers, a developer could build a project with 60 studios and one-bedroom apartments. The minimum requirement is 5% — that is 3 apartments — be Inclusionary Zoning Moderate-Income. The rent for that moderate-income studio apartment could be set at $1600 per month. Currently (June 2023) a studio apartment in Arcata including utilities is about $1,000 per month. The “Inclusionary Zoning” that is proposed would allow a premium of 60% above current rental prices — and still be called Inclusionary Zoning.
4. We can view “market rate” rentals as what the market will bear — or put another way, the most that people will pay. A single person earning $27 an hour might squeak by with a rent plus utilities of $1,400 per month. This moderate-income inclusionary zoning could be targeted to a person with a higher income — and still be called inclusionary.

How can I learn more about Inclusionary Zoning?

There are lots of articles on the internet. A good start is the Wikipedia article on Inclusionary Zoning.

On Arcata1.com there is Gateway Plan needs inclusionary affordable housing requirements,
says Rebecca Buckley-Stein

There will be other articles here on Arcata1.com. This is an important topic for the future of Arcata.

Appendix

A good source for area median income (AMI) figures and low- and moderate-income figures is the California Housing and Community Development document here for 2022. Humboldt County is on page 7.

Definitions of Affordable Housing. From Arcata’s Land Use Code.
 https://www.codepublishing.com/CA/Arcata/LUC/ArcataLUC09100/ArcataLUC09100.html#def689

1. Affordable Sales Price (Single Family Residential Projects). “Affordable” means average monthly housing payments, including mortgage loan principal and interest, any associated loan insurance fees, property taxes and assessments, homeowners insurance, land rent (if the home is on rented or ground lease land) and homeowners association dues, if any, which during the first (1st) calendar year of a household’s occupancy, are equal to or less than: (i) for Very Low Income Inclusionary Units, one-twelfth (1/12th) of forty-two percent (42%) of fifty percent (50%) of Median Income, adjusted by household size based on the number of bedrooms in the unit; (ii) for Low Income Inclusionary Units, one-twelfth (1/12th) of forty-two percent (42%) of seventy-two percent (72%) of Median Income, adjusted for household size based on the number of bedrooms in the unit; and (iii) for Moderate Income Inclusionary Units, one-twelfth (1/12th) of forty-two percent (42%) of one hundred ten percent (110%) of Median Income, adjusted for household size based on the number of bedrooms in the unit. Adjustments for household sized based on the number of bedrooms in the unit and amounts utilized for utility allowances and other monthly housing cost factors, including assumed mortgage interest rates, loan insurance fees, maintenance and repair allowances, homeowners’ insurance, property tax and assessment costs, and homeowners association dues, shall be as provided by the City’s First Time Homebuyer Guidelines.

2. Affordable Rent (Multi-Family Residential Projects). “Affordable” means rents calculated annually by the United States Department of Housing and Urban Development (“HUD”) and are:
a. The lesser of the Fair Market Rents or a rent that does not exceed thirty percent (30%) of sixty percent (60%) of the area median income (“Low Income Rents”); or
b. Thirty percent (30%) of fifty percent (50%) of the area median income (“Very -Low Rents”).
c. Other rent levels that may be established by the City Council for a specific project or program.

3. Affordable Unit. A dwelling unit that is required to be rented at affordable rents or purchased at an affordable sales price to specified households.

4. Annual Household Income. The combined gross income for all adult persons living in a dwelling unit as calculated for the purpose of the Section 8 program under the United States Housing Act of 1937, as amended, or its successor, or other income limits that may be required by a public funding agency.

.

Update:  August 15, 2023

Since this article was published, on June 13, 2023, the situation with inclusionary zoning in the Gateway area has improved. As of June 5, the specifications were:

“… provides a minimum of 3 percent of the units affordable to low income households or 5 percent of the units affordable to moderate income households…”

As is noted in this article, “moderate income households” is actually above market rate. So by saying you can have either low income or higher than market rate, that’s effectively means that there will be Zero low income.

Someone made a mistake. The State law that regulates this shows provisions for “moderate income” to apply only for for-sale units — apartments (condos) that the occupant is going to purchase. That is, owner-occupied. The moderate income percentages are completely separate from the regulations for the low-income rental apartments.

The inclusionary zoning for the Gateway now show 9% low-income or 4% very-low income. The State Density Bonus laws kick in at 10%, so it does not make sense to have Arcata’s number be at 10 or higher. 

As is explained in David Loya’s July 28, 2023, video, it is unlikely that a developer will go with Arcata’s inclusionary zoning process anyway. You can read and watch that video here on Arcata1.com. 

What does this mean in real-life terms?

Community Development Director David Loya:
And so project proponents will be driven by the Density Bonus provisions. And our design standards and Community Benefits programs are unlikely to be implemented due to waivers and concessions.

In other words, the City’s inclusionary zoning program is unlikely to be used.