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Taking Aim at Placer County's Lack of Affordable Housing

A new, comprehensive plan to address the growing lack of affordable and workforce housing in Placer County was approved recently by the county Board of Supervisors by a unanimous 5-0 vote.

The one-year work plan includes actions to increase the supply of affordable housing in the near- and long-terms and further reduce the regulatory barriers to housing construction.

The board action also tasks county staff with completing an inventory of all recent or planned housing developments in the county and where each stands on meeting its affordable or workforce housing obligations.

Under state law, Placer County's policies and plans to address housing needs for residents of all income levels are detailed under the Housing Element of the county General Plan, last updated in 2013. Housing Elements are typically updated every eight years. The work plan presented today outlines county initiatives planned during the next year to meet the Housing Element's goals.

Presenting the plan to the board, Placer County Deputy County Executive Officer for Lake Tahoe Jennifer Merchant noted that the median income in the county is not enough to afford a median-priced home, and that rents are increasingly unaffordable, too.

The work plan approaches the problem through four main focus areas: creating more incentives to build affordable and workforce housing, changing regulations to make building easier, advocating for state and federal assistance and furthering partnerships for meeting regional housing needs.

On the supply side, the plan calls for a new funding strategy to build more affordable housing. Options there could include dedicating a certain amount of transient occupancy tax revenue to fund workforce housing, or possibly developing an in-lieu fee program as an alternative way for developers to satisfy their affordable housing obligations, among other possible sources.

The county has completed studies of what development fees would be feasible to offset the affordable and workforce housing needs created by new development to help inform the creation of a fee program, if the board chooses to pursue one. The results of those studies were presented today for board consideration and guidance on next steps only; no new fees or a fee program were approved today by the board. Several board members expressed reluctance to pursue a fee program right away, favoring regulatory changes and incentives as better first steps.

"I've never believed that the solution for making housing more affordable for some is by making it more expensive for others," said District 4 Supervisor Kirk Uhler. "I want to make sure we're doing everything we can to eliminate artificial barriers [to housing construction] in the marketplace first."

Housing strategies vary between the western and eastern sides of the county, reflecting their vastly different housing markets. The tourism-driven economy of greater North Lake Tahoe presents unique housing challenges because as much as 65 percent of its housing stock is vacation homes, often occupied only seasonally. Since much of its local workforce is employed in the service industry, providing workforce housing is a requirement for new housing development in the region.

"My intent is to get housing constructed," said District 5 Supervisor and Board Chairwoman Jennifer Montgomery. "But before we look at a fee structure, before we can get construction on the ground, there are actions we can take now."

Among the near-term options to increase housing supply, county staff will continue a discussion with local partners in eastern Placer County about possible incentives for homeowners to rent their homes to local workers during times when those homes would otherwise be unoccupied. The county will also continue to aggressively pursue compliance with the requirement of short-term rental providers to collect transient occupancy tax from their guests.

Under a contract with the firm Host Compliance, in recent months the county has identified more than 2,000 lodging providers who were not complying with the requirement; with 25 percent of those identified already now complying, TOT revenue has increased by nearly $750,000. That additional revenue, Montgomery suggested, might be a good future funding source for more workforce housing. Ensuring that the price of short-term rentals includes TOT is also expected to help encourage more units to be offered as long-term rentals, further expanding local housing supply.

Other next steps include completing an inventory of available public lands in the region that have potential to site workforce housing; developing a new county ordinance governing tiny homes and emerging group housing options, expected to come to the board in October; and soliciting proposals for a new affordable housing development planned for the Placer County Government Center campus in North Auburn, as part of an ongoing update to the campus's master plan.

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