LWVMP and LWVSV

September 7, 2005

Martha Diehl, Chair
Monterey County Planning Commission
P.O. Box 1208
Salinas, CA 93901

Dear Ms. Diehl and Members of the Planning Commission:

The Leagues of Women Voters of the Salinas Valley and the Monterey Peninsula have consistently supported the County's Inclusionary Housing Program, and measures that would strengthen and improve it. We have seen a number of changes in its 25-year history. It has been difficult to monitor, and some units were lost in the early stages. Only two years ago, after an extensive evaluation in 2001-02, which included many public hearings and workshops, the County approved a set of policies and requirements developed by staff and consultants to create and maintain more affordable units. New units built after May 2003 are to be kept permanently affordable, rather than for a renewable term of only 30 years.

Other changes included increasing the percentage of very low, low and moderate-income units in a project, and applying this requirement to all but very small projects. New methods were developed for calculating in-lieu fees (when permitted), and resale prices. An Administrative Manual has since been prepared as a program guide. Homeowners were also given additional allowances for improvements and bedroom additions.

Monterey County's critical lack of adequate housing for low and moderate-income residents has persisted for a generation, and is likely to continue beyond another. The 2003 Housing Element identifies a number of potential opportunities for developing and funding new housing projects in unincorporated areas, but it will be several years before many can be built. The Element emphasizes under "Significant Housing Issues for the Future" (p.2) [that]:

"Existing Affordable Units Must Be Preserved. There are over 1,000 units that have some type of financial or legal affordability restriction in the unincorporated areas of Monterey County. These units must be monitored and every effort must be made to preserve their affordable status."

We understand the Housing Advisory Committee, as directed, has forwarded to the Planning Commission and the Board of Supervisors two recommended options for the term of affordability for inclusionary housing. These options are:

Recouping only the original subsidy plus reasonable interest upon resale at the end of 30 years would not provide sufficient funds to replace lost units, or any assurance that they will be replaced if lost through resale at market rate. We assume that the 45-year term would still have to be preserved in Redevelopment Areas or when funding requiring longer terms of affordability is used.

It takes various forms of public and private subsidies to develop and maintain affordable units, and there has been significant investment over time in this essential public benefit. It is not an opportunity for individual wealth building, but it is an opportunity to make home ownership possible for low and moderate-income households. Families do buy inclusionary units, build equity and later leave them and buy market rate homes in Monterey County. This is not a program that hampers the ability of households to gain a market rate unit; it can be a stepping stone to that reality. When the inclusionary units pass to new owners, resale prices should be kept affordable to people of the same income level as those who first qualified.

Adequate education must be provided to applicants regarding the process and deed restrictions on inclusionary units. Simple terminology and explanation in both English and Spanish will help ensure that program participants understand the limitations and purpose of the Inclusionary Housing Ordinance both prior to and following the purchase of any inclusionary unit. It is also important to review their concerns regularly, as has been done in the current course of meetings, to see if real inequities exist, or changes are needed.

The goals of the Inclusionary Program can best be met by keeping the present deed and resale restrictions. We strongly support this option for preserving the supply of affordable housing. If the County decides to limit the term, then upon resale of a unit at market rate, it must be able to recover the initial subsidy, interest on that subsidy, plus the County's fair share of the appreciated value to replace the unit.

The "public benefit" of the investment in housing should never be lost; the Ordinance should ensure that this asset is there for future families.

Thank you for considering our comments.

Sincerely,
     Anne Herendeen, President, LWV of the Salinas Valley
     Marilyn Maxner, President, LWV of the Monterey Peninsula