April 12, 2005
Long Beach
Chamber Convinces City Council to Drop the Proposed Housing Trust Fund
Ordinance
Agenda item #31 on the city
council agenda regarding the proposed housing trust fund and inclusionary
housing was withdrawn. It will be submitted at a later date.
Long Beach City Council to Vote on Implementing a Tax
that Diminishes Long Beach's Competitive Advantage
3:00pm - 4:30pm
Long Beach City Council
Chambers
333 West Ocean Blvd.
Downtown Long Beach
On April 12, from 3:00pm -
4:30pm the Long Beach City Council will be considering the
implementation of a new housing policy that will, if adopted,
negatively impact development in the City of Long Beach for years to
come.
The Long Beach Chamber supports smart growth and development in the
City. The proposal currently being considered by the City Council,
to create inclusionary zoning and creation of a Housing Trust Fund
with fees from new development, will dampen job growth and reverse
the great strides the City has taken in developing our City.
A
Housing Trust Fund would:
-
increase development costs and would decrease development, actually
limiting the availability of residential units and
increasing the current costs of housing.
- diminish Long Beach's competitive advantage compared with
other local jurisdictions.
- would limit job opportunities associated with
construction.
We need your help.
Creation of the Housing Trust Fund could lead to substantial taxes
on new residential and commercial development. Please attend this
hearing and stop the Council!
March 23,
2005
Long Beach Chamber Establishes its Position on a City Proposed Housing Trust
Fund
The following position was approved unanimously by the Long Beach Chamber's
Government Affairs Council on March 10, 2005:
The Long Beach
Chamber OPPOSES the imposition of inclusionary zoning within the City and
oppose the creation of a Housing Trust Fund that does not promote the
following essential housing goals:
- Promotes residential ownership.
- Promotes development of residential and commercial projects.
- Improves Long Beach's competitiveness with neighboring
communities.
- Promotes quality of life within Long Beach.
- Creates neighborhoods that increases pool of qualified employees.
- Improves the quality of neighborhoods, "our most important
resource."
- Removes blight and provides high-quality, and well-maintained
infrastructure.
- Decreases the number of people below the poverty line within Long
Beach.
The Long Beach Chamber SUPPORTS a thorough review of Long Beach's
housing policy with a goal of increasing private development by reducing
bureaucracy, red tape and fees; and increased use of zoning compliance to
reduce illegal density.
Background
Housing Shortage.
California suffers from a shortage of housing, characterized by high cost,
decreasing affordability, low vacancy rates and the increased number of
people per unit. Long Beach suffers from a similar shortage. The City's
problems are compounded by the high percentage of its population with very
low incomes.
Revisions to City Law.
As a result, the City of Long Beach is
considering major revisions to its housing policy. The plan includes the
creation of a Housing Trust Fund and the creation of compulsive inclusionary
zoning for newly constructed residential units. It is expected that the City
will consider these proposals in late March or early April.
Housing Trust Fund.
A Housing Trust Fund is defined as an
annually renewable source of subsidy dedicated for the development and
preservation of affordable housing. The funds are used in the development of
housing, and in direct subsidy to persons wishing to purchase residences.
Resale restrictions are placed on residences developed or purchased with HTF
funds. Funding sources vary, including fees on new residential or commercial
development, redevelopment money, or other taxing methods.
Inclusionary Zoning.
Inclusionary zoning, or mixed income housing,
is a mandate that a portion of newly constructed residential units be sold
at below market rates and that resale be limited up to 55 years. As an
alternative, developers may chose to pay a fee, which the City proposes will
be paid into the Housing Trust Fund. Current proposed rates are to increase
over a three year period, as follows: Year One: $5 per square foot of living
area; Year Two: $7.50 per square foot of living area, plus a percent
increase based on the increase in median housing sales price in Long Beach
from prior year; Year Three: $10 per square foot of living area, plus a
percent increase based on the increase in median housing sales price in Long
Beach from the prior year.
City staff had proposed a fee on commercial development based upon the
theory that commercial development requires increased housing. This
currently is not part of the proposal.
Who Benefits? The City has not defined
who would benefit from either inclusionary housing or the Housing Trust
Fund. Proposals range from directing these subsidies only to extremely low
income families to subsidies for first time home buyers (middle class
subsidies).
Common Criticisms
- Both
proposals increase development costs and would decrease development,
actually limiting the availability of residential units and
increasing the current costs of housing.
- Both proposals diminish Long Beach's competitive advantage compared with
other local jurisdictions.
- Decreases in development would limit job opportunities associated with
construction.
- Resale restrictions eliminate the benefits of ownership, particularly the
opportunity to build equity in your residence, and the ability to move for
new opportunities.
- Government housing for extreme low income populations would increase
poverty in the city, increasing demand for social services.
- The proposals do not take into account the quality of life in existing
neighborhoods.
Other Long Beach Housing Programs
The City of Long Beach
currently has several programs to improve housing within Long Beach:
- First-time Homebuyer
Assistance for low- or moderate-income households who live or work within
the City.
- Assistance to housing
developers in the construction of affordable for-sale ownership housing,
usually low-interest loans that convert to silent mortgages for ultimate
buyers.
- An acquisition and
rehabilitation program, which creates residences for sale to first time
homebuyers in Long Beach.
- Owner-occupied
rehabilitation programs.
- Mobile home rehabilitation
programs.
- Programs which assist
housing developers in acquiring and/or rehabilitating affordable rental
housing, up to $135,000 per unit with deed restricted occupancy.
- Programs which assist
developers in new construction of low income housing, up to $150,000 per
unit with deed restrictions; and, other assorted programs such as benefits
for police and fire down payment assistance.
Email
us for more information.
