Santa Rosa's Caritas Homes: Addressing the Housing Crisis Amid Fairness Concerns.

 Mural by Christopher Statton and Megan Wilson, 2015

© Ponderosa Templeton 2017

CC BY-SA 4.0

via Wikimedia Commons.

Sarah Edwards of the Press Democrat writes today about new housing in Santa Rosa. Tenants will soon be selected to fill 33 affordable apartments in downtown Santa Rosa, as part of Burbank Housing's two-phase Caritas Homes development. The project aims to provide 126 units in total to address the housing shortage in North Bay. The first building of the Caritas Homes development is set to be completed by July 1, with half of the first phase's residents being chosen through an April 21 lottery and the remaining units allocated for those experiencing homelessness. The development will be located at 340 and 360 Seventh St., catering to households earning between 40% and 60% of the area median income or those with a Sonoma County Housing Choice Voucher or Section 8 voucher.

Caritas Homes will consist of two identical buildings, each with 63 units, offering studio, one-bedroom, and two-bedroom apartments. The first 30 units in each building will be reserved for people experiencing homelessness. The development will also feature a secured parking garage, indoor community room, outdoor gathering space, and indoor bicycle storage. The first building cost $44 million to build, while the second will require $47 million due to inflation and rising construction costs.

Sonoma County behavioral health services and Catholic Charities will be available to support tenants who were previously homeless. The project, which provides around 90 units per acre, is different from the existing construction in downtown Santa Rosa. The development was initiated in response to the chronic housing shortage, which was further exacerbated by the 2017 Tubbs Fire, destroying 5,000 housing units in Sonoma County.

Two items struck me about this article. Firstly, the development doesn't look like 90 units per acre at all; instead, it looks attractive and friendly, with a mix of two, three, and four-storey elevations. The architects should be commended for that. Secondly, a more challenging and emotional point is that housing allocation is being determined here by a lottery system. Deciding where someone lives is a very high-stakes matter to decide on chance. The article mentions that around 10,000 people are on waiting lists for housing in the county, and nearly 3,000 are homeless. In a society that emphasizes distributive justice, resources should be allocated unequally only to the extent that it benefits the least advantaged members of the community. Instead of a lottery system, a  better way would involve assessing needs and prioritizing those in the most vulnerable situations. Only then will our shared sense of fairness be addressed, one of the crucial requirements of any effort to address our housing crisis.

Carriage Court in Santa Rosa.

"A mobile home park in West Miami, Florida"

By Dr Zak 

https://tinyurl.com/22c4uctp

In Wikipedia, CC BY-SA 3.0

https://tinyurl.com/2y9chhga 

Carriage Court, a mobile home park for seniors in Santa Rosa, it is reported today by the Press Democrat's Marisa Endicott, is being converted to an all-ages park by new management company Harmony Communities. The company claims that the change is necessary for the park to stay afloat and make a profit. However, residents are concerned about potential displacement and culture shift, as many of them rely on fixed incomes and have limited options if costs increase. The change comes in response to Santa Rosa's new mobile home rent control ordinance, which limits how much park owners can raise rent, according to Nick Ubaldi, regional manager for Harmony Communities. 

Residents are also worried about Harmony Communities' track record of litigation over evictions and rent increases. The company is involved in multiple lawsuits across the state and has a reputation for strict rule enforcement and eviction attempts. The Golden State Manufactured-home Owners League has noted that Harmony's "reputation is terrible." The director of communications for Harmony Communities identifies as a crude epithet, Heywood Jablóm, a false name and a classic sign of a bad actor. Indeed, Mariah Thompson, a staff attorney with California Rural Legal Assistance, noted that Harmony Communities will "often just see what they can get away with[.]” 

Mobile home parks, especially in American culture, are stereotypically viewed as lower-income housing for occupants living at or below the poverty line who have low social status. As Wikipedia notes, despite the advances in trailer home technology, the image survives. Residents, especially the elderly, can be targets for unscrupulous business practices. 

Here, Ubaldi is contending that an updated rent control ordinance, designed to protect senior citizens, is in fact the source of senior citizens' distress. This is an obvious attempt to reverse victim and offender, which is harmful to the democratic process, beyond the specific harm it inflicts on the residents of Carriage Court. Sowing confusion and undermining accountability only weakens the norms we all rely upon to effectively address our housing crisis, which is bad and getting worse. Ideas, like housing, are more of a public good, like a forest, than a commercial context, like a marketplace.  We all must recognize that public discourse is vulnerable to the same damage that can be suffered by the woods should the balance between individual advantage and long-term sustainability be violated callously.

Attendance, Housing, and Basic Aid.

 Sonoma County's 40 public school districts continue to see attendance declines. The lack of housing and a steadily declining birth rate are among the factors contributing to the decline. Sonoma County is predicted to experience a 16.9% enrollment drop by 2031, the fourth worst in California, as reported by the Press Democrat. In the past five years, Sonoma Valley has already experienced an 18.9% decrease in attendance, and as a trustee, I am familiar with the very profound changes that can cause. 

The article elides past some distinctions that are worth noting. First, school funding in California is based on attendance (the so-called "ADA," or average daily attendance), not enrollment (ADA is usually about 90% of enrollment, although there is a lot of variation).  Paying attention to the attendance figure will be the more reliable indicator of the state of school finance going forward in Sonoma County. 

Second, and related to the first point, is that as of November 2022, 16 of the 40 school districts in Sonoma County were "basic aid" districts, whose revenues do not change with either attendance or enrollment. In 2021‑22, the state had 118 basic aid school districts (about 13 percent of all districts).  As attendance continues to drop, more and more Sonoma County districts will become basic aid. Basic aid will increasingly be the default rule in Sonoma County. These districts (like Sonoma Valley) will ironically end up with more money per student given declining attendance, which is why many of these districts may very well not be interested in district consolidation intended to cut costs, as such consolidation would in fact reduce per-student funding.  There are a number of these districts in San Mateo, Santa Clara, and Marin counties, those counties having had many of the same housing issues as Sonoma County for a longer period of time, and the trend in those counties has generally been against consolidation of districts.   

A final point, which comes up here from time to time. "Affordable Housing" is a term of art in many respects, and while there is a shortage of housing that can be afforded in Sonoma County by most people, that is different from "Affordable Housing." Sonoma County just lacks housing, period. Narrowing the issue using the term of art is probably not the most helpful, because it obscures the fact that the response to the crisis needs to be comprehensive.

Green Checkmate.

Today Fred Allebach, a member of the Sonoma Valley Collaborative and a friend, shared his thoughts on affordable housing and the challenges faced in Sonoma Valley and beyond with me via email. He provides a historical context of the 2020 Sonoma Urban Growth Boundary (UGB) issue, and how it continues to impact affordable housing projects. Allebach identifies the "Green Checkmate," a dynamic that hinders progress in the development of affordable housing by preserving low-density zoning and maintaining property value advantages for existing homeowners.

Fred also discusses the tension between environmental justice and social justice, pointing out that environmentalists (and those aligned with) tend to use green arguments to justify preserving a low-density, high-property-value status quo. He explains how affordable housing development is caught in a series of impossible arguments, resulting in the de facto segregated status quo.

Allebach advocates for a more inclusive approach to housing development that balances sustainability and social equity. He suggests supporting lower-income housing projects in unincorporated urban service areas and strategic affordable housing projects in non-urban service areas, especially where there are substantial job opportunities nearby. He also recommends considering the establishment of a City of Sonoma Valley to better address the collective housing needs of the region's population.

I have long appreciated Fred's work and his keen attention to and expertise regarding housing. Over time, Fred, and a group of like-minded, pragmatic reformers, with their continued focus on this difficult problem, are building the necessary muscles in the community to allow change to occur in the face of what can only be described as obstructive hostility. Fred's work shows how, rather than inspiration or enlightenment, it is grit that is the essential element in pursuit of justice.

Housing, a Public Good.

Wikipedia contributors. (2021, September 15).

Public housing.

In Wikipedia, The Free Encyclopedia.

Retrieved April 5, 2023

from https://en.wikipedia.org/wiki/Public_housing

Yesterday, the Sonoma County Board of Supervisors held a first reading of a proposed "camping" law, which seeks to ban unhoused individuals from sleeping in specific public areas, such as the Joe Rodota Trail. Sonoma County has a huge challenge on its hands, with a 2022 countywide census finding 2,800 homeless people, of which only 800 were living in shelters. More shelters, transitional housing, and affordable housing are needed, along with social services such as mental health care and substance abuse treatment. 

But I think the core of the problem is different. I think we need to see housing as a public good, and not as a market. Vienna (60%), Singapore (80%), Sweden, Hong Kong (50%), Finland (20%), and the Netherlands (30%) have all managed to house very significant parts of their population by recognizing that housing is a public good and should be the object of concerted action. 

Sonoma County should prioritize the provision of more housing to effectively address homelessness. By repurposing sites, our County could become a "net zero" employer itself, setting a powerful example. As the county's largest employer, this initiative would have a significant impact on the housing crisis and substantially benefit working and middle-class families.

Encouraging government and employers to adopt a "net zero" position in how their operations impact the local housing ecosystem would be a good start. By taking responsibility for the housing needs of their employees and community, government and employers can play an active role in addressing homelessness and providing equitable access to housing for all. We need to focus on creating long-term solutions, not just temporary fixes.

@TheEconomist on #Homelessness in @SFGov.

I blog from time to time on the trustworthiness of news sources, and in general in the United States, the Economist is often considered the most reliable when surveys of the public are conducted. Before the June 5, 2018 primary in California, they took a look at San Francisco's Mayor's race. Their article touched the twin problems of the cost of housing and of homelessness, and I recommend the piece (available online here).

It's disturbing reading.  The author (The Economist eschews bylines) confronts the lived reality in terms that the reader can almost smell.  But the striking sentence to me was "[t]o voters, though, the problem seems to be getting worse ... '[but t]here’s not more homelessness than before. It’s just a lot more visible,” says [Jeff] Kositsky [San Francisco's Director of Homelessness Services]."

We all struggle in the San Francisco Bay Area to understand how wealth disparities in the nine county area can rival those on display in what the article characterizes as "poor-world entrepôts." But that the situation has become clear to so many is not in dispute, and perhaps that is the silver lining -- for we must have awareness before we can take action together.

The Return of #Cash.

Image available at http://tinyurl.com/yaxw3y5g

Just a brief note today, regarding reporters who are pointing to an economic and financial shift.  Extraordinarily low interest rates have had a significant impact on asset prices in Sonoma Valley (as I blogged about here, here, and here).  In 2015, Robert Shiller pointed out that in the San Francisco Bay Area, that most people expected annual home price increases over the next decade of 5%. However, more than a quarter of respondents thought prices would increase each year by 10% or more. Many of the second group leveraged (and profited impressively) as real property prices have continued to rise over the intervening 36 months.

S&P 500 dividend yield v. 3-month T-bill yield

courtesy the Board of Governors of the Federal

Reserve System (US), retrieved from the Federal 

Reserve Bank of St. Louis [FRED] May 15. 2018. 

S&P 500 dividend yield courtesy mutlpl.com,

 May 15, 2018. Excel data and graph available here.

Today, though, there is evidence that change is afoot, as the yield on "cash" (short term Treasuries) now exceeds the dividends on a broad range of stocks (the S&P 500).  The Financial Times' graph, courtesy of John Authers, is on the right.  I extended the graph back a bit (to 1933) just to get a longer perspective, via FRED and multpl. For about a thirty year period, dividends were generally always higher, until some point in June of 1963, when the rule flipped. Cash was king, more or less constantly, for the following ~2,335 weeks, until February of 2008. There are periods where these two measures briefly "invert" from the norm in both eras (e.g. 1959 for dividends, 2002 for cash), but it's unusual.

What does it mean? Stanford economist Bob Hall (who continues as chairman of the academic panel that dates American business cycles) notes that, economic syncopation being what it is, “[t]he next recession will come out of the blue ... just like all of its predecessors.” However, the Economist has pointed out previously that this economic cycle is already running exceptionally long at ~105 months, and it is now more than a year past the average of the last three (the longest ever, March of 91-March 01, was 120 months).  Meanwhile, valuations continue to be particularly rich (the Shiller PE is at 32.33, in excess of the '29 crash and only matched by the dot-com bubble). My sense is that the financial columnists pointing to this data are wondering how "out of the blue" a contraction could be at this point. Which is an interesting point to consider, when one reflects on the power of narratives in financial markets.

Casa Del Maestro, Pt. 1. #teacherhousing #sonoma

"Casa Del Maestro"
3380 Lochinvar Ave, Santa Clara, California
image available at http://tinyurl.com/htm8n2z

On Monday, the Press Democrat’s editorial board described a “brewing fiscal crisis” for Santa Rosa's schools, who must, as of their first interim report for 2016-17, implement a ~2.2% budget cut going forward.  SRCS is confronting flat enrollment coupled with declining rates of return on pension funds, that will increase budget pressure over the next four years. At least one board member’s suggesting a parcel tax in response.  

The editorial describes a problem familiar to Sonoma Valley Unified. SVUSD will implement a ~5% budget cut in a similar fashion to SRCS. While Santa Rosa must deal with a 1.6% reserve reduction due to an accounting error, and Sonoma Valley's audits have consistently been clean, it is the medium-term funding squeeze, with costs rising substantially faster than revenues, and an increasing inability to make up the difference via one-time funds, that’s driving concerns. SRCS' potential pursuit of a parcel tax is one solution that certainly appears to be on the table, but it could cause voter confusion, if not outright fatigue, given Santa Rosa's successful $229 million bond in 2014. As Jenni Klose, president of the SRCS board noted in a letter to the editor today, "[SRCS], as with all California districts, is simply wrestling with how best to meet its increased pension obligation while continuing to fairly compensate staff[.]" 

Sonoma Valley, grappling with the same situation, should investigate creating structural, long-term advantages to ensure our teachers and staff aren’t crushed between stagnant funding and our ever-rising cost of living. Housing remains the single largest expense for many teachers and staff, whether laterals or new graduates. Meanwhile, those further up the step-column need salaries that can pay for mid-life expenses, such as children starting college. Addressing one issue means more’s available to deal with the other. Much as our schools confronted rising power prices by getting on the supply side of the equation with solar panels, so too should our district pursue construction of high quality, reasonably priced teacher and staff housing, an advantage in recruiting and retention independent of state funding.

2.83 acre Sonoma Valley Health Care District Property

432 W MacArthur, Sonoma, California
image available at http://tinyurl.com/joonh66

Serendipitously, Sonoma Valley’s health care district must make a decision regarding 2.83 acres on West MacArthur in the next 18 months. The land is four houses from Sassarini Elementary, and down the street from the SVHS/Adele/Prestwood campus.  Due to some (very) recent changes in the law, SVUSD has an opportunity to pursue a teacher housing project there, before the main front of the financial storm hits our budget.

The model for such housing is Santa Clara Unified’s Casa Del Maestro. Commenced in 2002 on a previously closed middle school, the project utilized certificates of participation to fund construction of 70 units, subsequently rented out to teachers and staff via a functionally integrated public charity. Construction was done at market rates. No subsidy was involved. One bedroom apartments rent for ~$900, and a large two bedroom for ~$1,450 (typically $2,390 for one in Santa Clara, $2,930 for two).

The cost advantage has four parts. First, the District owns the land, and thus land costs are not included in the cost of ownership or operations. Second, the capital structure allows for tax-exempt finance. Third, the land and construction are both property tax-exempt. Finally, there is no profit -- rents are set at a level sufficient to pay back costs of construction, financing, maintenance and operations, and to fund a long-term reserve.

Former Cal. State Sen. Mark Leno
image available at http://tinyurl.com/zbw9tum

Despite such success, few K-12 housing projects have gone forward since, due to an aura of legal uncertainty. Is restricting residency to teachers and staff consistent with California’s Unruh Civil Rights Act? Can land held in educational trust be used for teacher and staff housing? Can Certificates of Participation be used to fund construction? Can schools cooperate with other agencies on projects? Are there legislative findings that the housing crisis is hitting teachers and staff?

We got our answer January 1. Mark Leno’s SB 1413, known as the “Teacher Housing Act of 2016,” codified at Health & Safety Code § 53570 et seq., provides the express authority to proceed. The law’s factual findings and statutory language gives the same type of guidance for K-12 districts long available at the junior college, CSU, and UC levels. Doubts regarding limiting the rentals to teachers and staff, about the use of lands held in educational trust, and the availability of innovative financing and intergovernmental cooperation were all addressed.

2.83 acre Sonoma Valley Health Care District Property
432 W MacArthur, Sonoma, California
image available at http://tinyurl.com/gtmavhq

And this brings us back to the 2.83 acre parcel. Ideally located, the site is nearly identical in size to the Casa Del Maestro. It’s within walking distance of supermarkets and the Sonoma Square. The neighborhood already has several master planned facilities (Village Green, Sonoma Hills, Pueblo Serena, Moon Valley). Further, the school district has broad powers available to support the project, given the financial flexibility of the authority granted by Health & Safety Code § 53573.

What of the hospital, the current owner? Hospital sites must be “multi-decade,” allowing new buildings to be constructed as others pass from use, like a wave traversing the property over decades. For now, the MacArthur parcel is surplus to requirements. But the two districts could allow for a future exchange of land with fair compensation. The Andrieux site could become housing and MacArthur a hospital, when contemporary structures reach their end of life.

There are any number of problems that could interfere with teacher housing at this site (or another), but the rough contours are clear.  Making sure teachers and staff can afford to live in our community was the first item I discussed when walking Sonoma door to door this past fall. There are few more effective proofs of the power of small-town cooperation, especially in the face of discord we now witness washing over our small valley.  Let’s get our government agencies talking about working together, and let's set an example, by having our health care and school districts discuss how they might make this land continue to serve the public interest for decades to come.

Regarding Roundabouts.

A brief post today, about what can be a surprisingly vigorous debate.  Speaking with Ron Willis on Thursday, we discussed Sonoma Valley's issues with affordable housing, which turned into a conversation about traffic congestion.  The two are more closely linked than they may at first appear. As many are aware, the traffic problems Sonoma experiences are exacerbated by so many employees of local businesses who cannot afford to reside in the community they serve, and must commute 90 minutes or more (a topic that has come up on this blog before) to find affordable housing for their families.  Reform of local housing policy could help unlock the consequent roadway snarls.

Ron and I also touched on the physical layout of Sonoma's roadways, noting that increasing capacity isn't really consistent with the previously expressed preferences of local voters, but that roadway improvements have made a difference in mitigating congestion. We agreed that a nice example was the construction of a roundabout by the County of Sonoma on Arnold Drive, a project that was, at times, controversial.

The intersection had been a notorious problem for years.  One of the nice features of Google Maps is that it contains a time series of photographs of the roadway. The earliest images (from 2007) actually show two CHP officers trying (in vain) to clear the traffic backup -- Google's Maps service allows users to see just how bad the situation was prior to the County's efforts.



While the cost of the project surprised some (~$2 million), and was considered larger than expected, it eliminated the daily backup of twenty to thirty cars turning right onto Agua Caliente Boulevard that frustrated so many drivers, and that disjointedly interrupted the otherwise rural tenor of Sonoma Valley with a mess of cars more reminiscent of the MacArthur Maze. The improvement has since received wide acclaim. Advancing the map from Google to 2015 illustrates the complete transformation of the intersection and the restoration of the pastoral character of the area.

Arnold Drive Roundabout, 2015.

Image available at http://tinyurl.com/gw5gl4f

The takeaway, for me, is that persistent efforts to improve the quality of Sonoma Valley's infrastructure is a key part of the strategy necessary to address Sonoma's affordable housing crisis. The evidence shows that the situation continues to worsen, and indeed to become more extreme as the months pass. Perhaps the roundabout solution points the way to other ideas that might help resolve the situation, with Sonoma borrowing even more ideas from the Garden City movement than just Ebenezer Howard's traffic innovations.