One city solves affordable housing
Don’t look now, but Sacramento is solving the affordable housing crisis.
No, I’m not talking about state Sen. Scott Wiener and the important progress happening at the state Capitol. I mean the city of Sacramento, where a deliberate effort to stoke a dense, infill housing boom is creating affordability before our eyes.
Rents in Sacramento are falling faster than any other large city in California even as it remains the most popular relocation destination in the country. The median rent is approximately half San Francisco’s. Right now you can find an apartment that is affordable for lower-income people, at least according to the government definition of roughly $1,000 to $1,500 for a one-bedroom, at market rates (it’s true, check Zillow). A prime location studio listed for $1,400 last year is just over $1,100 today.
True, $1,100 a month is still unaffordable for many people. But it’s progress. And unlike other cities, that decline has nothing to do with an exodus (again, the Sacramento region is the fastest-growing in California).
Instead, this affordability comes from a deliberate choice by city leaders to pursue a “more of everything” housing strategy. Yes, more subsidized, affordable housing. But also more higher-end housing with the amenities some renters are looking for — swimming pools and dog showers and so on.
To make this happen, the city also took a “more of everything” approach to reform, including upzoning in key corridors, more flexible standards, relatively low development fees, eliminating parking requirements and dozens of other incremental improvements that add up to big changes in how much it costs to build housing.
Above all, Sacramento changed its apartment building approval process from a political one — with approvals by elected officials, as in San Francisco — to what’s called a “ministerial” process, with decisions made impartially by planning staff. If a proposed building complies with the code, it’s approved automatically. This way, project decisions aren’t political or swayed by the loudest voices; they’re made fairly and in accordance with the city’s housing goals.
As a result, Sacramento is now building more housing per capita than any other region in California (to be clear, we’re still way behind national leaders like Austin, Texas, but a lot of that is California-wide limitations like anti-sprawl efforts and building costs). This boom is ongoing even as lower rents make it less profitable for developers to build.
The key question: How does building higher-end apartments — more dog-shower buildings — contribute to more affordable housing? What’s happening takes some nuance to understand: Newer buildings are especially attractive to young professionals who are moving up in their careers, people like nurses, teachers and state government workers. As those young professionals relocate to new buildings, they’re moving out of their old apartments. And with less demand for older buildings, landlords have to compete for tenants by lowering rents, like that $1,100 studio. (Researchers have spotted similar trends across the country.)
Of course, the fight is far from over. Sacramento still has three huge, interlocking challenges.
First, pushing market rents down only goes so far. Sacramento has shown that increasing supply can deliver affordable housing for lowerincome renters (officially defined as 50%-80% of area median income), but I doubt it can ever provide sufficient housing for very low-income people (less than 50% of the median). The city desperately needs more funding to build subsidized housing targeted at those with the lowest income. Realistically, Sacramentans will have to consider tax increases — perhaps a parcel tax — that share this burden.
Second, even as rents are decreasing again, it’s too late for the roughly 5,000 Sacramentans who were forced onto the streets. Studies find it is far more expensive to provide services and get someone back in housing ($50,000 to $100,000 a year) once they become homeless. In the short term, the priority needs to be keeping people safe and alive. It’s going to be a long, expensive process to undo the damage of not building housing earlier. And again, someone has to pay for that.
Third, the Sacramento housing boom has been concentrated in the central city, not the wealthiest neighborhoods. Although Sacramento will begin to address this problem with its next, even more ambitious strategy.
After a unanimous City Council vote, Sacramento will this year replace all single-family zoning with a much more flexible citywide code. This will allow smaller, more affordable units — townhomes, cottages, four-plexes and six-plexes, and so on — in every neighborhood. Sacramento is the first city in California (and one of the first in the country) to do so.
This is the crowning step in a uniquely ambitious strategy that is already working. But the Sacramento solution — make it easier to build all housing of all types in every neighborhood in every way possible — is hardly rocket science. These are common sense policy changes that every city, including San Francisco, could pursue immediately.
Granted, local politics are more than a little different over in the Bay Area, and many voters (and elected officials) remain deeply skeptical of any new housing development, especially if it’s not deed-restricted as affordable. My reply to skeptics would simply be an invitation: Come take the train up sometime. Spend an afternoon apartment hunting in Sacramento.
You can find a spacious home in a walkable, tree-lined neighborhood for a fraction of the cost of San Francisco. You can maybe even see the Beam from the window.