Affordable Housing in Sacramento's D2

There is a public conversation taking place the past few weeks about affordable housing in Sacramento’s District 2. Specifically, there are multiple projects seeking to build affordable housing in D2 and concerns from some that there aren’t many market rate housing projects proposed or in development in the district. There are many potential and real motivations for this concern, but for the sake of argument I will assume the best of intentions and a genuine concern that a community needs a mixture of market rate and affordable housing in order to be healthily and economically diverse.

As an outsider to D2, these are my thoughts:

1. If it is profitable for a developer to build market-rate housing, they absolutely will. The fact that the district has so few active proposals for market rate housing is a pretty reliable indicator that market rate housing simply does not pencil out in the area right now. In fact, despite the fact that Sacramento was just ranked as the least affordable new home market in the US, 95815 is the only zip code in the region where rents have declined in the past year (by 12%). New market rate housing is not going to break ground until the numbers change and new affordable housing being built is not somehow in competition with market rate housing. At present, it is affordable or nothing.

2. Most of D2’s existing housing stock already is market rate.

3. As mentioned above, Sacramento is in the middle of a housing affordability crisis. We are in desperate need of permanent affordable housing options and it is difficult to build them in most of the City because so much of the City is currently made of up viable market rate housing that brings in bigger profits for developers. This puts much of D2 in a unique position of being able to take advantage of unique state and federal funding opportunities to construct affordable housing right now, creating a desperately needed asset.

4. The Del Paso Blvd corridor, as an example, is in dire need of activation. It needs businesses open instead of vacant storefronts and it needs foot traffic from people who are patronizing those businesses. This is a bit of a chicken and egg scenario, but attractive new affordable housing on and near the corridor would bring more people who want to be able to walk to businesses nearby. These people will provide the critical mass needed to support more businesses on the Boulevard and will attract new businesses and other improvements. This kicks off a feedback loop in which improvements build upon improvements and ,within a few years, market rate housing will start making sense and attracting developers to the area. If you want market rate housing in the area, this is the most effective process to get it.

5. One of the biggest problems with the cycle described above is that—once an area starts attracting market rate investment—it will make affordable housing almost impossible to build in the future once values have risen. We have this problem in Oak Park and other neighborhoods where longtime residents who rent are being displaced and pushed out and market rate proposals out-compete affordable projects. This means that the present moment is actually a crucial opportunity to build and secure more affordable housing in order to prevent displacement once investment starts pouring in. Not only should affordable housing be built right now, but resources should be identified and allocated to the Sacramento Community Land Trust to buy up existing housing that is uniquely affordable.

So, in sum, protecting and building new affordable housing feeds two birds with one scone by preserving housing options for lower-income residents and setting off the cycle that will bring in investment and improvements for all residents. It is incredibly rare to have the opportunity to drive investment without displacement and the time is now.