Vallejo falling behind on affordable housing goals

VALLEJO – Sixteen housing projects in various stages of development will add 2,720 housing units in Vallejo over the next seven years. But more than 90% of that is market rate units, with few low-income units in the pipeline, according to the city’s draft housing element that will be reviewed by the city council on Tuesday.

The city’s own housing plan, which sets the city’s goals for building sufficient housing every eight years, notes that a surge in higher income residential development can affect the overall housing market and cause displacement of lower income communities, but the city missed its affordable housing goals in the last cycle.

California requires cities and counties to plan for adequate housing across all income levels. State agencies assess how much housing is needed at each income level for regions across the state. Regional governments then assign portions of that assessment to local jurisdictions. 

This process, known as the Regional Housing Needs Allocation, sets the minimum number of units in each income category that a city or county must plan for in the housing element of their general plan. 

But some housing advocacy organizations are concerned that key programs requiring developers of market rate projects to compensate for these impacts appear in the plan only as recommendations without targets or mandates. 

“You don’t just build upper income housing and let the developer walk away with the profits,” said Paul Theiss, who drafted the Solano county chapter of the Sierra Club’s comments on Vallejo’s Housing Element. “The idea is for the developer and the buyer of those units to contribute to the overall well-being of the city.”

Vallejo’s Regional Housing Needs Allocation calls for the city to identify sites that are suitable for 1,059 low income units, 495 moderate income units and 1,346 higher income units that can be developed from January of this year to Jan. 31, 2031. These sites must be available for developers to initiate the project within the eight-year cycle.

Less than a year into the planning cycle, Vallejo already has enough projects in the pipeline for almost twice the number of market rate units the city needs to fulfill its goals, but few low-income projects. 

Another housing advocacy group, Legal Services of Northern California, pointed out that many of the sites designated for low income housing are not actually suitable for development and that much of the plan that pertains to lower income housing needs to be revised to meet state requirements. 

Consequences of unequal development

Market rate housing is more lucrative and therefore easier to finance than projects for moderate income and lower income levels, which often require a patchwork of federal and state grants to build. 

Although market rate projects are easier to finance, they can also lead to displacement of lower income communities because these developments often create lower paying jobs in service and retail industries which then puts pressure on the supply of low-income units when the workers who fill those jobs seek housing in the area.

One option cities have to reduce impacts of market rate housing is to implement inclusionary ordinances, which generally require developers to build low income housing along with market rate projects. Another option is to charge market rate developers an impact fee, creating a funding source that a city can use to subsidize low-income development.

In Vallejo’s housing element from the previous cycle, which began in 2015, the city planned to conduct a study to explore the feasibility of a housing impact fee. In 2020, the city adopted a housing strategy which included plans to investigate the possibility of implementing an inclusionary housing ordinance. But according to this cycle’s draft, staffing challenges delayed those plans.

Feasibility studies for these ordinances and impact fees attempt to assess impacts caused by market rate development in a particular city or county to set fees and low income development mandates accordingly. Theiss said that some groups opposed to housing have used similar ordinance and fees to squelch all development in a particular area. 

“There is a goldilocks zone in there when you get just enough money to make a difference in affordable housing but not so much that it’s prohibitive for the builder,” Theiss said. 

But the planning department allowed two years to complete the study and then another year to adopt the ordinance if it is deemed appropriate. On that timeline, if an ordinance is adopted it might not go into effect until halfway through the current planning cycle, long after much of Vallejo’s required share of market rate housing is approved and on its way to being built.

Shannon McCaffrey, managing attorney for Legal Services of Northern California, said she sees a trend among the draft housing element’s proposals that does not indicate a lot of progress. “Quite a few of the programs are essentially the same as those on the previous cycle, and it's the same kind of language like ‘evaluate’ or ‘investigate’ and it’s clear that this element should be the one to take action,” she said.

Sites identified may have deficiencies

Beyond the programs intended to support low income development, McCaffrey said she also has concerns about the low income sites selected to fulfill the city’s housing needs. The housing element is intended to provide developers with a list of sites that are ready to be developed, but at a city housing commission meeting on Oct. 5, McCaffrey pointed out that several of the sites may not be viable.

“Staff identified many sites that are not developable and will not be developable within this planning period of which we are almost an entire year into,” McCaffrey said.

According to McCaffrey, two of the sites selected by the planning department for low income development were recently purchased by a company that provides high-end assisted living for seniors. Another site is a narrow triangular strip of land on Broadway and Mini Drive that was recently acquired by a company that operates fueling stations.

The city also selected the parking lots for Home Depot, Food Maxx and a McDonalds for low income development, which McCaffrey questions as realistic development sites.

“If you exclude only the egregiously undevelopable sites the housing element does not identify enough sites,” McCaffrey said. “It seems that the sites inventory would need to be completely revisited so that sites could be readily available for developers to begin building.”

According to state guidelines, parking lots are considered non-vacant sites and the housing element should provide an analysis of the extent to which an existing use impedes development on a non-vacant site. The guidelines state that this should include existing leases or contracts, the interests of the owner or their development intentions, and whether the property is currently on the market. 

Vallejo’s housing element does not provide any additional information on the sites that are currently in use as parking lots. Instead, it lists all of the sites together under the heading “vacant sites inventory.”

The city’s housing plan also appears to have deficiencies in environmental equity.

State law requires cities to consider disproportionate environmental impacts such as air and water pollution or proximity to environmental hazards in their selection of sites for low-income housing. 

Of the sites identified for development in Vallejo’s draft housing element; 49% of low income units are located next to freeways, while 28% of moderate income units are next to freeways and 14% of above moderate units are next to freeways.

According to McCaffrey, one of the central aspects of analysis required in the selection of sites in the housing element is the jurisdiction’s duty to affirmatively further fair housing.  

“They have an affirmative duty to plan in a way to undo historic patterns of segregation and lack of opportunity,” McCaffrey said. “So placing low income sites next to a freeway, a gas station, or in the middle of a commercial area – that is not creating the kind of opportunity for low income housing to be integrated into the rest of the city.”

The city will accept written public comments on the housing element until midnight and residents can provide verbal comments at Tuesday’s City Council meeting. The planning department will then respond to public comments and potentially make revisions before submitting the draft element to the state housing agency. 

The agency will review the draft along with the comments and can call for the city to make changes if necessary. Once the state housing agency approves the draft, it will then return to the city planning commission and the city council for adoption.

“We are concerned about where the draft is right now,” McCaffrey said. “But I feel hopeful that we might be able to engage with the city in a positive way and start a conversation about some changes that can improve the document.”