The Sacramento City Council will consider adopting a revision of the city's housing ordinance that requires builders to pay a fee into a multi-income housing fund. The current ordinance requires developers to build low income units as a part of their projects in certain neighborhoods.
But low-income housing advocates say the fee allows builders to pay their way out of the requirement and build high-rent units in exclusive areas.
"The way the city council is headed, there will be more segregated housing, low-income people grouped together," said Shireen Miles, a volunteer with Sacramento Area Congregations Together, a low-income and homeless advocacy group.
Miles also says the $2.58-square-foot fee on new homes isn't enough to build the low- and moderate-income units the city needs for a balanced community.
The Sacramento Housing Alliance would rather see if the existing ordinance can work now that the economy is recovering from the recession. The council is considering the change because developers were slow to undertake projects that didn't make financial sense.
Builders and developers are endorsing the new ordinance recognizing that it's a compromise. The fee adds around $6,000 to the cost of an average-size house. Sacramento builders already pay about $60,000 in various fees before they begin building a house, all of which are passed on to buyers.
"That makes the house $6,000 more expensive and every thousand dollars you increase the price of a house, you eliminate a certain percentage of people," said developer and real estate attorney John Hodgson.
Many neighborhood business organizations are also backing the new ordinance because it exempts certain multi-unit projects from the fee. That allows developers to more easily build infill housing projects on small lots that have remained vacant. There is also an exemption for warehouse-type buildings that are converted to housing. Both are long-time goals of city officials.
There is still a concern that it's not fair for people who want to live in areas that are becoming more and more expensive to live in.
“Provide people an opportunity to live a new community, where there are going to be more amenities, allow people to be mobile where they can move in and out of the good school districts," said Darryl Rutherford, executive director of the Sacramento Housing Alliance.
Should the ordinance pass, housing advocates said they want a yearly review to see how much money is raised, how much low income housing is built and whether the fee should be raised or not.