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Draft Gateway Form-Based Code yields very little Inclusionary Zoning homes
Gateway Plan needs inclusionary affordable housing requirements

Update:  August 15, 2023

Since this article was published, on June 20, 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.

Here is the original article:

At the March 1, 2023, City Council meeting, Rebecca Buckley-Stein spoke about the need for Inclusionary Zoning in the Gateway Plan. To read what she said or listen to the video, scroll down or click here.

As she noted, “The current draft does not include any provision that would require the development of affordable housing. It does mention planning for various income levels, but does not include any affordability requirements in the new development.”

Here is the response from Community Development Director David Loya:

David Loya:
If I can address that and maybe a few other comments that came up just to kind of reflect back to people. So, yeah, absolutely. There is the full intent to have an inclusionary zoning requirement in the Gateway Area Plan. I’m not sure — you know, I take I take it on faith that it’s not mentioned in the text of the Area Plan. [Note: It indeed was not in the text of the Area Plan.] That was certainly an oversight if so, and/or, you know, just the way that the terms were used.

But the document right on the face of it, you know, in the Mission Statement is to create mixed-use, mixed-income projects. And so the way that we intend to do that is through Inclusionary Zoning.

There’s going to be a whole separate discussion on that with the Planning Commission. I’ll flush that out in more detail later. But yes, inclusionary zoning, yes. In addition, there are some community benefits that would allow people to go above and beyond the Inclusionary Zoning requirements to meet those community benefit requirements for getting the principally permitted pathway, the ministerial pathway.”

[Note:  Where David Loya says “that would allow people” he means “would allow developers.” He uses the word “people” to mean the folks who would occupy the housing — renters, owners (in theory) — and sometimes to mean the developers.]

This is not truly inclusionary zoning

As of June 20, 2023, the Planning Commission has not had this discussion. The Form-Based Code for the Gateway plan came out on June 5, 2023. It contains one sentence on 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).”

This can be called “inclusionary zoning” as it is defined by law — although typically the percentages for low-income households is 10% to 30%. It is certainly not “inclusionary zoning” in terms of the spirit of what that means. And it is most definitely not inclusionary zoning as we’d like to see it in the Gateway plan. The way this is worded does not provide for mixed-income housing.

In real-life terms, a developer could build a project with 60 studios and one-bedroom apartments. The minimum requirement is 5% — that is 3 apartments — be Moderate-Income Inclusionary Zoning. The rent for a single person in that moderate-income studio apartment could be set at $1600 per month — that is, by law, 30% of what would be 120% of our area median income of $67,450. Currently (June 2023) a studio apartment in Arcata is about $1,000 per month (often including utilities). This so-called “Inclusionary Zoning” that is proposed would allow a premium of 60% above current rental prices — and still be called Inclusionary Zoning.

In terms of David Loya’s statement “In addition, there are some community benefits that would allow people to go above and beyond the Inclusionary Zoning requirements,” we have this:

Benefit:          Additional On-Site Affordable Units
Description:    The percentage of affordable units in the project exceeds the Gateway Plan Area inclusionary housing requirement by 10 percent.
Points:         3 points

To satisfy the inclusionary zoning requirement, as it’s written, either 3% needs to be low-income affordable or 5% needs to be moderate-level — that is, 120% of area median income. Moderate-level apartments can be priced higher than the market rate. 

To put this in perspective, the four-story Sorrel Place building has 44 units, and it’s a block long. We’ll imagine a new building with 80 apartments, the inclusionary zoning would require four apartments (5%) be moderate-income units — that is, they could rent for possibly 60% above market rate and still meet the inclusionary zoning requirement.

This community benefit offers 3 points for increasing that number of “four” by just adding 10% to that. That would be 4.4 units, but we’ll round it up to 5 — even though the way it’s written doesn’t say anything about rounding up.

So instead of providing 4 apartments at above-market rental prices, the developer provides 5 apartments, then the project earns 3 points.

I ask the reader:  How does this help to provide affordable housing in the Gateway area? the answer is:  It does nothing to provide affordable housing.

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Rebecca Buckley-Stein spoke to the City Council

Hi. Thank you so much for taking my comment. My name again is Rebecca Buckley-Stein and I’m the managing attorney for the Eureka office of Legal Services of Northern California.

I’m commenting tonight to encourage the City Council to direct staff to include housing affordability requirements in the Gateway Plan.

The current draft does not include any provision that would require the development of affordable housing. It does mention planning for various income levels, but does not include any affordability *requirements* in the new development.

Inclusion of affordability requirements is consistent with the City’s obligation to affirmatively further fair housing.

 

It will aid in ensuring that Gateway housing is available to a diverse population. 

The plan does seem to mention affordability by design — because the units will be small they will somehow be inherently affordable. But that is not a generally effective method for purposes of ensuring affordable units for diverse community members.

And that doesn’t work for two reasons. One because small studio apartments are generally only appropriate for one or two individuals, not families or more than two people. And also there’s no guarantee or requirement that small units will be rented at an affordable price.

Provisions reserving a percentage of units for extremely low, very low, low, and moderate income individuals should be included in the plan. Affordability requirements are especially important for very low income and low income people because, without them, these families are likely to be completely excluded.

There are many ways in which the City can ensure Gateway includes affordable housing, and it can do so through mandatory or optional affordability requirements specific to Gateway, or through city-wide inclusionary zoning ordinances — or it can do both.

Inclusion of affordability requirements is consistent with the City’s obligation to affirmatively further fair housing because it will aid in ensuring that Gateway housing is available to a diverse population. Additionally, Arcata’s 6th cycle Housing Element says that the City will consider implementing inclusionary zoning ordinances.

Inclusionary zoning is when low or moderate income units are mandated in new housing developments, usually based on a percentage of units. Inclusionary zoning ordinances also prescribe the required level of affordability from very low income to moderate.

I comment on this item to encourage City Council to direct staff to include mandatory affordability requirements in the Gateway Plan. And in light of the massive development that the City is planning, the continued housing shortage, and being consistent with the City’s own housing element — Now is the time for the City to consider implementing inclusionary zoning city-wide.

Video of the Arcata City Council Meeting – March 1, 2023