Controversial affordable housing proposal advances at Sacramento City Council. What to know

A controversial proposal aimed to create more affordable housing in the City of Sacramento has taken a step forward, but may be two votes too short to pass.

The package, proposed by three council members, would put a fundraising measure on the 2024 ballot, make the rent control ordinance stricter, and increase developer fees.

“While we continue to work to scale up temporary shelter and services, we must also move upstream to address the root cause of this crisis — lack of affordable housing options and low wage jobs,” Councilwoman Katie Valenzuela said during a news conference last week.

Councilwomen Caity Maple and Mai Vang joined Valenzuela to sponsor the so-called Sacramento Forward proposal. Council members Lisa Kaplan and Eric Guerra raised concerns Tuesday about the proposal during a Law and Legislation Committee meeting.

“Today everyone talked about how important it is for us to build more housing at all levels,” Guerra said. “But I want to make sure we understand moving forward we also are not creating a scenario that as we’re doing that, we disincentivize the interest in Sacramento to people.”

After hearing the concerns, which were echoed by Councilwoman Lisa Kaplan, Valenzuela decided not to try to send any parts of the package to the full council yet.

“It cant just be ‘no’ and it can’t just be ‘wait two more decades for more supply,’” said Valenzuela, a renter. “I’m desperate for more ideas to get 16,000 units built in the near future.”

They asked staff to work on the details of the proposal, and also said they would hold stakeholder meetings, then bring it back to the committee this fall. From there, the committee could move it to the full council for a vote.

Several of the ideas in the package have been controversial over the years as Sacramento struggles with how to persuade developers that they can still make a profit by building here, although the cost of living is lower than the Bay Area. The city has seen an apartment building boom in recent years, but it has slowed since interest rates have risen.

Several developers and real estate agents told the committee that if the fees go up, they will be forced to stop building affordable housing in the city altogether, building instead in suburbs such as Elk Grove and Roseville.

“This will demonize providers and cause unneeded strife in the housing market,” said Matt McDonald of the California Apartment Association. “Instead of resurrecting a litany of bad ideas, CAA hopes the City of Sacramento will instead choose to work with us.”

What would the proposal do?

Inclusionary housing

The package would bring an inclusionary housing requirement back to the city. That would require that a percentage of all new units be affordable for low- and very-low-income households. The council in 2015 removed the inclusionary requirement, replacing it with a developer fee.

Maple said the fee is too low.

“The way nearly every city in the country builds affordable housing is through a fee built in to new developments,” Maple said during the news conference. “San Jose receives $43 per square foot of new build. Portland is $27. San Diego is $25. Sacramento’s affordable housing fund receives just $3 per every square foot of new construction. It’s no wonder we’re having a hard time building enough affordable housing for those who need it.”

A consultant is separately working on inclusionary housing legislation, with a plan to bring an item to the council in spring 2024.

Stricter rent control

The proposal would make the city’s Tenant Protection Program more strict by applying it to single-family homes, and applying “just cause” eviction protections to tenants after 30 days instead of one year.

It would also provide tenants free attorneys to fight eviction cases, and reduce annual rent increases allowed.

This year, under the ordinance, landlords are allowed to increase annual rent of certain units up to 9.2% over the previous year. Several people who spoke to the committee Tuesday said their landlords raise their rent the maximum amount each year.

The average rent for a typical one-bedroom unit in the city is now about $2,300, and a two-bedroom is $3,150, according to national rental firm Apartment List. That’s more expensive than Portland, Philadelphia, Denver, Nashville and Dallas.

The Tenant Protection Program, adopted in 2019, is set to expire at the end of 2024, unless the council extends it.

Prevailing wage

The proposal would require minimum prevailing wage and healthcare for workers on projects that receive any public support.

Dozens of members of several Northern California carpenter unions showed up to the chambers Tuesday in bright yellow vests to support the proposal.

Right to Purchase Act

The proposal would require any tenant building listed for sale to be sold to the tenant or eligible community group if they can meet the initial listing price. That would aim to prevent corporate property purchases.

Ballot measure

To fund the package, the council would vote to place a measure on the ballot for November 2024. It would pay for emergency rent assistance, as well as acquisition and construction of affordable housing units.

The council women have not yet announced the details of the measure, and whether it would include a sales tax increase.

Anti-harassment ordinance stalls

A new anti-harassment ordinance hit a roadblock Tuesday, amid similar concerns that it would slow production of affordable housing.

Valenzuela voted to move the ordinance forward to the full council. Kaplan and Guerra instead directed staff to work with stakeholders on ways to address tenant harassment, which may or may not include a new ordinance.

“I know tenant harassment is real, but my concern is whether the ordinance is the right answer,” Kaplan said.

Kaplan said she would like to know the cost, and to explore partnering with McGeorge Law School, and with the county, where many evictions happen.

After the vote Valenzuela said she was disappointed.

“We move quickly when things align with our goals and agendas and we slow down when they don’t,” Valenzuela said.

Real estate agents and landlords said the ordinance was not needed because it’s already in state law.

“California already has some of the most extensive renter protections in the United States,” said real estate agent Erin Stumpf. “It’s already illegal for landlords to harass their tenants.”

While there are state laws regarding tenant harassment, the ordinance, proposed by Maple, would have provided new protections for renters, Code Enforcement Manager Jose Mendez said.

There is no current protection when a tenant files a complaint to city about a landlord, or for when a landlord threatens, intimidates, or discriminates against a tenant, Mendez said.