Phantom Affordable Housing - Inclusionary Con-Dough Units Don't Count as Affordable Housing

The Pasadena Pundit ^ | July 7, 2007 | Wayne Lusvardi

[WayneLusvardi]

Phantom Affordable Housing - Inclusionary Con-Dough Conversions Don't Count as Affordable Units

The Pasadena Pundit - July 7, 2007

Would you encourage your representative on your City council to vote for a so-called Inclusionary Housing Condominium Conversion ordinance amendment if you learned that it:

1. Would not count toward the affordable housing goals mandated by the State because such condominium conversions do not add new "rooftops," as they are already existing housing? (i.e., phantom affordable housing). 2. For every one inclusionary unit created about four or five apartment dwellers would still be displaced. This is very stressful for those dislocated. 3. Would provide very few existing renters with ownership housing because for every one unit of affordable housing created about four or five other units must have their sales prices increased to subsidize one "inclusionary" unit. This would inflate condominium prices to pay for each "inclusionary housing" unit (developers pay nothing and just pass the cost of subsidies onto new owners). 4. Condo conversions only work in upscale areas where even affordable condo units would be priced at $400,000 and up - a price few existing renters could afford. This is to say nothing about the large homeowner's association (HOA) fees in condo projects which are not subsidized. 5. Will make developers only willing to pay less for land underneath existing apartment buildings. This would give no financial incentive to apartment owners to convert their buildings to condos, resulting in very few, if any, added owner-occupied "affordable" housing. 6. Cannot provide for "density bonuses" to offset landowner losses because the density of existing apartments is already established and is very difficult and prohibitively costly to increase. 7. Does little or nothing to alleviate traffic impacts for existing "under-parked" apartment buildings. 8. Would result in fewer rental units when the housing supply is tight. 9. Imposes inclusionary housing mandates on small "mom & pop" multiplexes of five units in size making it difficult for elderly owners to move relatives in to take care of them. 10. Once condo complexes have crime problems, it is much more difficult for the police department to work with the residents.

Presently, the City of Pasadena is circulating a Notice of Intent to adopt a negative declaration as to environmental impacts resulting from an amendment to the existing Inclusionary Housing Ordinance to now apply to condominium conversions. http://www.cityofpasadena.net/planning/meetings/posts/Planning/7-11-07/Title16_17.pdf) http://www.cityofpasadena.net/planning/meetings/posts/Planning/7-11-07/Inital%20Study%20Amendment%20Title%2016%20-%2020%25%20Affordability%20Denver.pdf )

This follows a current trend sweeping California in many northern California cities. Typical of government, Southern California cities are now promoting the expansion of Inclusionary Housing laws to condo conversions apparently because others are doing it. Government often doesn't know what it is doing and merely follows the bandwagon for symbolic gains, leaving the consequences for us to figure out.

What is conveniently omitted in the City's environmental documents is that such Inclusionary Condo Conversions apparently do not count as "affordable housing" under State law.

The City of San Leandro recently adopted an amendment to their inclusionary housing law to apply it to condo conversions even though such new housing units will not count toward reaching State affordable housing mandates set by the Association of Bay Area Governments. Only "new rooftops" count toward such affordable housing goals. Adopting this amendment to the Inclusionary Housing law would only lead to "phantom afforable housing units." See here: http://findarticles.com/p/articles/mi_qn4176/is_20060107/ai_n15994418)

In other words, the City of Pasadena is proposing to impose draconian new affordable housing requirements on condo conversions that won't count towards its affordable housing quota ("phantom units") but will have many, many downsides: it will displace more renters than new buyers by 4 or 5 to 1, will inflate condo prices out of the reach of most renters; will produce very few converted affordable housing units; will be unable to provide density bonuses to existing landowners to offset inclusionary unit costs; will do little to lessen traffic impacts from under parked existing apartment buildings; will result in fewer apartment units when the housing supply is tight; will be a hardship on small mom & pop apartment owners; and will make police work more difficult.

As Tom Scott, the executive director of the San Diego Housing Federation, a coalition of nonprofit affordable housing developers and local governments, is quoted in the League of California Cities' Focus on Housing newsletter (Sept. 8, 2005): "From an affordable housing perspective, the cons of condo conversions in most of the San Diego market outweigh the benefits." http://www.imakenews.com/focusonhousing/e_article000452183.cfm?x=b11,0,w).

Pasadena has always prided itself on doing things its own way: constructing the Gold Line light rail itself instead of the bureaucratic MTA; having its own Health Department and inspecting its own restaurants instead of relying on L.A. County, etc. With all the historical apartment buildings in Pasadena, the City has also wisely rejected rent control as a solution to the so-called affordable housing problem.

Perhaps the City of Pasadena should smartly wait and see how expanding the Inclusionary Housing ordinance to condo conversions works in other cities before adopting it willy-nilly here.

There is an inexhaustible supply of those frozen out of homeownership especially in places such as Pasadena where immigrants (God bless them) have taken the cheapest housing stock and pushed the local workforce into higher rent housing or out to "edge cities;" and displaced the homeless out of former flophouses onto the streets. Politicians are eager to do something visible about affordable housing to stay in office. But by expanding Inclusionary Housing to condo conversions Pasadena will only follow the lemmings of other cities off a cliff with many real downsides and only symbolic benefits. "Inclusionary con-doughs" are a con game that Pasadena should be smart enough not to fall for.

[kingu]

Style over substance is, alas, the hallmark of far too many in government. Here’s why this will pass in Pasadena: The city council, without doing anything themselves, will be able to point to a half dozen families who are now enjoying ownership of an apartment and commitment to paying association fees until they get forced out of their condo, without lifting a finger.

Low cost housing will never be low cost housing unless it is significantly more modest in size and scope. If they fit five Ikea style efficiency units into the space of a single condo, yes, finally they would be doing something real. But that’d be, yes, of course, racist.