OUR VIEW: Don’t change below market rate standards

1. The city’s below market rate pricing guidelines are in accordance with ABAG and HUD and should remain

It’s in the city’s best interest to ignore housing developers’ recent requests to the Morgan Hill City Council to change the pricing guidelines for below market rate units.

The developers, who have built most of the affordable housing stock in our city, want the pricing guidelines for these homes increased to offset loses they claim have been caused by the increase in building expenses and the downturn of the housing market. 

But the city’s BMR pricing guidelines are in accordance with those adopted by the Association of Bay Area Governments and the Department of Housing and Urban Development. They meet the income levels of teachers and other low-earning people who work here and should live in our community.

Many of the jobs in Morgan Hill are also industrial and involve assembly and product manufacturing such as sheet metal fabrication, which are at the lower end of the wage scale. Increasing the pricing guidelines for these vulnerable and struggling workers will only hurt the city.

The pricing criteria keeps our community healthy, improving our local economy by building homes close to Morgan Hill employers, decreasing commuting traffic, noise, pollution, contributing to a healthy job and housing balance.

If staff recommendations are adopted, BMR prices would be $176,000 for a two-bedroom home for a very-low income family and as high as $356,000 for a four-bedroom home for a moderate-income family. That’s an increase of $14,000 and $18,000, respectively for both homes.

1. Current city allocation of affordable housing units is sound and meets the needs of a diverse community

When Morgan Hill voters passed Measure C in March 2004, the common name for the city’s Residential Development Control System, they continued their commitment to affordable housing – guaranteeing 13 percent of housing units would be sold at below market rate prices.

The city’s 1990 General Plan Housing Element also contains a policy requiring 20 percent of the total annual housing allotment be reserved for affordable housing. 

And, under redevelopment law, the city is also required to set aside 20 percent of the tax increment in the Redevelopment Agency area for affordable housing units.

Our city and state leaders have been wise. The below market rate housing program meets the needs of a diverse community. It integrates all income levels into our neighborhoods. It requires developers to sell new homes at below market rate prices that are affordable to very low, low and moderate income earners.

There are currently more than 500 families on the city’s BMR waiting list to buy such homes.

These potential buyers meet specific income requirements. The units are subject to resale restrictions and remain below market rate units for a specific number of years. Most units are priced to be affordable to median income households spending no more than 33 percent of their income on housing expenses. The formula is based on the assumption that a homeowner shouldn’t pay more than 33 percent of his or her income on housing. 

1. Housing developers have a social responsibility to respect current below market rate housing standards

California law also requires municipal governments to develop affordable hosing policies that encourage the construction of housing that meets all income levels regardless of developers’ bottom line and housing market conditions.

We dare say that recent population estimates could show that the city needs to build more units to meet low income housing needs and not increase pricing guidelines that would only benefit wealthy developers.

ACT NOW

Contact the Morgan Hill City Council to let them know your feelings on the issue. (408) 779-7271 or via their Web site: www.morgan_hill.ca.gov.