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Sacramento County Lawsuit Is About the High Cost of Homes

By Michael A. Piekarz
Contributing Writer

“The American dream of owning your own home has become an unrealistic fantasy for too many Californians,” remarked State Attorney General Bill Lockyer when his office requested the court’s permission to intervene in a lawsuit filed by the Building Industry Association of California.

The suit, filed early in 2005, challenges the validity of an ordinance passed by the Sacramento County Board of Supervisors last year to provide a solution to the lack of affordable housing available to modest-income Sacramento County residents. The ordinance requires that new housing projects sell or rent a least 15-percent of new units at affordable rates. According to proponents, the county has approved a total of 766 homes and more than 1,600 rental units affordable to low-income families since the passage of the ordinance.

“Home ownership is being denied to many area residents by a combination of low income levels, the high cost of land and a decline in available federal subsidies,” said a spokesman for the National Low Income Housing Coalition (NLIHC). A report by the Coalition finds that simply renting a modest two-bedroom apartment in Sacramento County would require a worker to earn $19.95 an hour – far in excess of the current minimum wage of $6.75 an hour. The cost of owning a home has been estimated to require a wage of $22.09 an hour or more.

“There is a huge pent-up demand for affordable housing,” said Sheila Crowley, president and CEO of NLIHC. Most affordable housing advocates agree with her assessment of the situation, but differ on their proposal for a solution to the problem.

“The building industry strongly opposes Sacramento County’s affordable housing ordinance, said to be one of the most progressive in the nation and the latest attempt to formulate such a solution,” said Crowley.

“Show us how building a new market-rate home requires the building of low-income housing,” challenges Dennis Rogers, senior vice president for governmental and public affairs for the North State Building Industry Association. Rogers also set forth the position that affordable housing “is a community-wide issue, and the community in total should be footing the bill for it.”

“While the Building Industry Association does oppose the Sacramento ordinance, it is very concerned about the lack of affordable housing,” said Robert Rivinius, president and CEO of the California Building Industry Association, which favors state subsidization for affordable housing.

Prior attempts, such as the $2.1 billion Proposition 46 bond measure approved by voters in 2002, have proven a less than satisfactory solution. Other proposals such as a real estate transaction fee have faced opposition in part due to claims that they would just make the problem worse by increasing housing prices even more.

Regardless of position on methodology, almost all housing advocates are in agreement that some type of governmental action is necessary to address the issue of affordable housing.

“At present, the lawsuit challenging Sacramento County’s ordinance has been acting as kind of a chilling effect on other jurisdictions,” stated Valerie Feldman, staff attorney with Legal Services of Northern California.

Advocates of the ordinance are concerned that the county will succumb to pressures brought on with the suit, but one board member believes that the supervisors will remain committed to affordable housing and the economic integration of neighborhoods.

“The means of getting there are always malleable to a certain extent,” said Sacramento County Supervisor, Roger Dickinson. “Whether those means will include the contested ordinance remain to be seen.”