Affordable Housing for Low Income Families
Portola Valley Neighbors United (PVNU) is committed to assisting our community to alleviate the shortage of affordable housing for low and very low income families who reside and work in and around Portola Valley. We believe in doing so through housing that:
fairly meets the actual needs of low income families working in and around Portola Valley,
is safe for the community as a whole,
is compatible with our Town’s rural character and majestic wildlands, and
conforms to the maximum extent possible with our General Plan and Municipal Code.
We do not support the urbanization or commercialization of Portola Valley, the destruction of its wildlife habitat, or the promotion of reckless and unsafe development through misguided interpretation or non-application of our General Plan and Municipal Code. We believe the Town’s General Plan and Municipal Code embody the community’s consensus about development in Portola Valley and should be consistently and transparently applied to all development within Portola Valley to preserve and protect our unique rural and wildlands character.
Our Town’s Regional Housing Goals
In 1969, California mandated that all California cities, towns and counties must plan for the housing needs of our residents—regardless of income. Under this mandate, the California Department of Housing and Community Development establishes an eight-year goal for the total number of new homes that need to be built in a given region, such as the Bay Area — and how affordable those homes must be — in order to meet the regional housing needs at all income levels.
The Association of Bay Area Governments, working with the Housing Methodology Committee, allocates a share of the region’s total housing goal to each city, town and county in the region, called the Regional Housing Needs Allocation (RHNA). Each local government must then update the Housing Element of its general plan to establish where housing can be built and the policies and strategies necessary to meet the community’s regional housing need allocation.
The current Regional Housing Needs Allocation for Portola Valley runs from 2015 through 2022, and calls for the construction of a total of 64 new units by the end of 2022, distributed as follows:
Very low income 21 units
Low income 15 units
Moderate income 15 units
Above moderate income 13 units
Total Goal (2022) 64 units
Between 2015 and December 31, 2018, the Town issued a total of 69 permits for new housing units, exceeding its total goal four (4) years before the State deadline. As of December 31, 2018, the Town had issued the following new permits in fulfillment of its 2022 RHNA:
Very low income 27 units
Low income 5 units
Moderate income 7 units
Above moderate income 30 units
Total Built (as of 2018) 69 units
In short, four (4) years prior to the 2022 deadline, Portola Valley exceeded its total RHNA goal for housing as well as its RHNA goals for very low income housing and above moderate income housing. The Town will soon advise us whether the Town’s new accessory dwelling unit ordinance has provided additional progress toward our low income and moderate income goals.
In addressing potential development of the Stanford Wedge property, the Town has stated that it will not count any units from development of Stanford’s property “towards its RHNA, and any adjustments would therefore not affect the town’s ability to provide its share of the housing need.” General Plan, Housing Element 2481
DOES STANFORD’S PROPOSED PROJECT ACTUALLY SERVE THE AFFORDABLE HOUSING NEEDS OF LOW INCOME FAMILIES?
If affordable housing for low income families is the justification for upending the Town’s General Plan and zoning ordinances, increasing our fire risk, destroying more of our open space wildlands and disrupting animal habitat, then surely we all should insist that the proposed project be carefully examined to ensure that it actually serves the needs of low income families in and around Portola Valley in accordance with the Affordable Housing Ordinance passed by the Town in 2014. It serves no public interest to increase the risk of fire to the Town and its residents and eliminate even more open space wildlands and animal habitat if the “affordable housing” project Stanford proposes fails to serve the actual needs of low income families for affordable housing over the long-term consistent with our Affordable Housing Ordinance.
Why Is Stanford Proposing Substandard Housing for Low Income Families?
Portola Valley’s Affordable Housing Ordinance requires developers, such as Stanford, who seek permission to increase the density of housing in a proposed housing project by offering “affordable housing” as part of their project, to provide affordable units that are “of equal design and quality as the market rate units” in the project. The exteriors and floor plans of the affordable units must be similar to those of the market rate units, and the number of bedrooms in the affordable units must be consistent with the mix of bedroom numbers for the market rate units. Zoning Ordinance section 18.17.070.
In short, the design, floorplan and mix of bedroom numbers Stanford proposes to sell as market rate faculty homes establishes the standard of design, floor plans and mix of bedroom numbers that its affordable housing units must also meet.
The strong public policy underlying our Affordable Housing Ordinance is clear: developers such as Stanford should not seek concessions in our zoning laws or incentives to build more housing units than our Municipal Code would ordinarily permit on the pretext of supplying affordable housing for low income families unless the “affordable housing” they provide is similar in design, floorplan and bedroom numbers to the mix of market rate houses they wish to build.
Stanford’s November 25 project application proposes the development of 60,300 square feet of market rate housing for its faculty members, consisting of:
21 three-bedroom houses for its faculty, each with slightly more than 2,200 square feet of floor space; and
6 four-bedroom houses for its faculty, each with 2,350 square feet of floor space.
In contrast, for low income families, Stanford proposes to develop a total of 7,125 square feet of “affordable housing” consisting of
6 single room studio apartments, each with only 425 square feet of floor space;
3 one-bedroom apartments, each with 600 square feet of floor space; and
3 two-bedroom apartments, each with 975 square feet of floor space.
Why the difference?
Why, contrary to our Affordable Housing Ordinance, is Stanford proposing to build three- and four-bedroom houses for its faculty families, but only studio, one- and two-bedroom apartments for low-income families? Does the reason stem from Stanford’s financial interests?
Based on whether a low-income affordable unit is leased or sold by Stanford, California’s Density Bonus Law imposes different pricing restrictions on Stanford.
If the affordable housing unit is leased, the rent charged for the unit must include the cost of utilities and may not exceed 30% x 60% of San Mateo County’s median income for a household size appropriate to the unit. If the unit is a studio, the household size appropriate for the unit is one person. If it is a one-bedroom unit, the household size is two people. If it is a two-bedroom unit, the household size is 3 people. If it is a three-bedroom unit, the household size is 4 people, and if it is a four-bedroom unit, the household size is 5 people.
If the affordable unit is sold, the sales price to the initial buyer may not exceed an affordable housing cost, which includes mortgage loan payments, mortgage insurance payments, property taxes, reasonable utilities assessment, etc. Housing costs for low income units may not exceed 30% x 70% of the area’s median income for a household size appropriate to the unit.
In San Mateo County the 2020 average median income limits published by the California Department of Housing and Community Development for application of California’s Bonus Density Law were:
$100,150 for one person,
$114,500 for two people,
$128,800 for three people,
$143,100 for four people, and
$154,550 for five people.
Applying these limits, the maximum rent Stanford would be permitted to charge a low-income family for a one-person studio apartment would be 30% x 60% x $100,150 = $18,027 or $1,502.25/month. The maximum rent Stanford would be permitted to charge a low-income family for a four person three-bedroom house would be 30% x 60% x $143,100 = $25,758 or $2,146/month.
In short, each one-person studio apartment, comprising 425 square feet of floor space, could rent for a maximum annual revenue of $20,322, or $42.42/square foot of floor space/year. In contrast, a three-bedroom house, comprising over 2,200 square feet of floor space, could rent for a maximum annual revenue of $25,758, or $11.71/square foot of floor space/year.
Based on the 2020 median incomes as determined and published on the California Department of Housing and Community Development’s website, the comparative annual rental revenue Stanford could derive from affordable housing set aside from low income families is depicted in the table below.
Why Is Stanford Proposing to build Higher Cost/Square Foot Housing for Low Income Families?
By building small studio, one-bedroom and two-bedroom apartments for low income families, and not the three- and four-bedroom houses it is proposing to build for its faculty, Stanford not only increases the rent/square foot (and thus the total lease or sales revenue) it can charge low income families for such supposedly “affordable” housing, but it can also significantly decrease its total cost of construction, thereby greatly enhancing its financial return.
For example, each studio apartment Stanford builds can be leased to low income families at rents that are 366% higher per square foot than the rent it could otherwise charge for a three-bedroom house ($42.42 versus $11.59). By building and leasing a studio apartment with total square footage that is less than 20% that of its smallest three-bedroom house, Stanford can generate 70% of the revenue it would earn by leasing the house. If, consistent with our Affordable Housing Ordinance, Stanford proposed to provide 9,000 square feet of affordable housing, consisting of 3 three-bedroom houses and 1 four-bedroom house, it could charge low income families a total combined annual rent of $105,093 for all four homes. By proposing to provide smaller studio, one-bedroom and two-bedroom units instead, Stanford not only reduces the total square footage allocated to affordable housing (from 9,000 to 7,125 square feet) and lowers its total cost of construction, but it can also double its income from affordable housing by charging low income families a total combined annual rent of $239,544. By building “affordable housing” with less total square footage in smaller apartments Stanford, it seems, can earn more.
Is that why, contrary to our Affordable Housing Ordinance, the “affordable housing” Stanford is proposing to build for low income families is not the same design or floorplan, and does not provide the same numbers of bedrooms, as the mix of market rate housing it is proposing to build for its faculty?
Our Town’s Affordable Housing Ordinance, adopted in 2014 to implement the State’s Bonus Density Law, clearly prohibits developers from benefiting themselves in this way, and for good reason.
Affordable Housing Should Meet the Actual Needs of Low Income Families
It is not the purpose of the Town’s Affordable Housing Ordinance or the State’s Bonus Density Law to serve the financial benefit of developers. Rather, it is the purpose of both laws to provide an incentive to developers to build affordable housing of the same quality, design, mix of floor plans and numbers of bedrooms for low income families as they propose to sell at market rates by allowing them to increase the density of housing they would otherwise be permitted to build on a given parcel of land.
Under our Affordable Housing Ordinance and California’s Bonus Density Law, Stanford’s compensation for allocating a portion of the housing it proposes to build to low income families is the opportunity to build more housing units on its property than it would otherwise be allowed to build. Our laws do not permit Stanford to seek zoning concessions by providing substandard housing for low income families. Nor do our laws allow Stanford to charge low income families greater revenue/square foot by providing them less housing than our Affordable Housing Ordinance requires.
There is simply no good reason to allow Stanford to claim the benefit of increased housing density by offering housing for low income families that is below the standard of housing it proposes to provide its own faculty, especially at prices per square foot that far exceed the prices it could charge low income families for housing that fulfills the standard set by our ordinance.