City Council Report
915 I Street, 1st Floor
Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-00996 June 14, 2022
Title: (City Council) Approval to Include the City of Sacramento in the Article 34 Ballot Measure Proposed by the County of Sacramento Proposed for the November 8, 2022 Election
Location: Citywide
Recommendation: Adopt a Resolution approving the City of Sacramento’s inclusion on the November 8, 2022, Countywide ballot measure related to Article 34.
Contact: La Shelle Dozier, Executive Director, (916) 440-1319, [email protected] ; Christine
Weichert, Director of Housing Finance, (916) 440-1353, [email protected]; Sacramento Housing and Redevelopment Agency
Presenter: Helen Petersen, (916) 449-6207, [email protected] ; Sacramento Housing and
Redevelopment Agency
Attachments:
1-Description/Analysis
2-Resolution
Description/Analysis
Issue Detail: Article XXXIV was added to the California Constitution in 1950 to require voter approval of public housing projects. Although construction of new public housing ended over 25 years ago, Article XXXIV elections are applied to other types of publicly funded affordable rental housing. Voters are asked to approve a certain number of dwelling units prior to their being assisted by a public agency if a majority of the units in the development will house lower-income households, defined as those with incomes below 80 percent of the area median income.
Article XXXIV applies to affordable housing owned by private nonprofit organizations as well as public entities because nonprofits can qualify for a property tax exemption. While there are a number of exemptions created by the State legislature, the typical development today in the City of Sacramento subject to Article XXXIV is newly constructed housing in which more than 49 percent of the units are restricted to lower-income persons and which carries a below- market-rate loan from Sacramento Housing and Redevelopment Agency (SHRA) and/or the State of California (State) subordinate to private financing and/or bond financing issued by the City Housing Authority.
Since 1968, Sacramento voters have approved the development of affordable housing units in five ballot measures, all approved by a majority vote of the electorate. After Congress discontinued the construction of new public housing units, private nonprofit and for-profit organizations became major providers of affordable housing for low and moderate-income families, seniors, and the disabled. Two recent such projects completed in the City of Sacramento are Wong Center and 4995 Stockton Boulevard.
As a result of these and many other developments, the number of units approved by previous Article XXXIV ballot measures is running out. Currently, the City of Sacramento has 764 units available to build, and the County of Sacramento has 2105 units available. In addition, the initial Article 34 voter authorization expires in 2024.
Ballot Language
With rapidly escalating housing costs in Sacramento, the demand for affordable workforce housing has increased. Similarly, the City’s senior population will grow dramatically in the next ten years, and a large portion of this population will require safe, affordable, and sustainable rental housing. As a result, staff requests approval to include the City of Sacramento in the Countywide Article 34 ballot measure on the November 8, 2022 ballot. The proposed text of the ballot measure is below.
Shall the unincorporated County of Sacramento and incorporated cities within, including Sacramento, Elk Grove, Citrus Heights, Folsom, Galt, Rancho Cordova, and Isleton, be authorized to annually develop, acquire, or construct housing for low-income persons and families, including elderly or disabled persons, equivalent with 1% of the existing housing units in the county? Any unconstructed housing units in each year will be carried over annually.
Staff is modeling this language after other successful measures in other cities and counties in California, which include the City of Santa Barbara and Humboldt County. This language allows for a reasonable amount of affordable housing to be built in proportion to the amount of existing housing units in the county. The measure would allow for any unconstructed units to roll over to the next year. All cities within the county have agreed to participate in this ballot measure and are taking reports to their respective City Councils for approval.
Survey Results
In April of 2022, FM3 Research administered a survey to determine the level of support in Sacramento for a possible Article 34 ballot measure on the November 2022 ballot. The survey was administered in the five largest incorporated cities in the county (Sacramento, Citrus Heights, Folsom, Rancho Cordova, and Elk Grove) and in the unincorporated County of Sacramento. The survey found this is a viable measure with the summary results below.
City Final Yes Vote
Citrus Heights 64%
Elk Grove 63%
Folsom 56%
Rancho Cordova 65%
Sacramento 76%
Unincorporated areas 66%
Outcomes
Should this measure not be approved, all cities and public agencies within Sacramento County and the unincorporated area of Sacramento County would be out of compliance with the Article 34 requirement. They would be unable to assist or apply for State funding for the development, construction, or acquisition of affordable housing after 2024.
Policy Considerations: The recommended actions for this Project are consistent with: a) SHRA’s Multifamily Lending and Mortgage Revenue Bond Policies adopted by the Council on September 24, 2019, Subsection 1.1.(2)(I), new construction of permanent supportive housing and homeless housing; and b) the 2021-2029 Housing Element, which encourages the provision of a variety of quality housing types to encourage neighborhood stability, including options for extremely low-income households.
Economic Impacts: Not applicable.
Environmental Considerations:
California Environmental Quality Act (CEQA): The proposed action does not constitute a project under the California Environmental Quality Act per the Guidelines Section 15378(b)(4), nor is the action a federal undertaking under the National Environmental Protection Act. No environmental review is required.
Sustainability: Not applicable.
Commission Action: Sacramento Housing and Redevelopment Commission: At its June 1, 2022 meeting, the Sacramento Housing and Redevelopment Commission reviewed the staff recommendation for this item. The votes were as follows:
AYES: Amanfor, Morgan, Nunley, Osmany, Ross, Staajabu, Starks, Woo
NOES: None
ABSENT: Boyd, Griffin
Rationale for Recommendation: The City of Sacramento’s Housing Element of the General Plan, Mixed-Income Housing Ordinance, and 2020 – 2024 Consolidated Plan evidence the City’s commitment to the provision of housing for all of its citizens. Not having Article XXXIV authority affects the financial feasibility of rental housing serving lower-income people and restricts developers from accessing State and local housing funds.
Financial Considerations: The cost of placing this measure on the ballot in November is not expected to result in a significant cost because it will be part of a consolidated general election.
LBE - M/WBE and Section 3 requirements: The items discussed in this report have no M/WBE impact; therefore, M/WBE considerations do not apply.
Updated 10-15-19
RESOLUTION NO. 2022 -
Adopted by the Sacramento City Council
on date of
APPROVAL TO PLACE ARTICLE 34 AFFORDABLE HOUSING MEASURE ON THE NOVEMBER 8, 2022 BALLOT
BACKGROUND
A. Article 34 (XXXIV) of the California Constitution requires voter approval of publicly- assisted low -income housing projects. Pursuant to Article 34, California public agencies may not develop, construct, or acquire in any manner, low -rent housing projects until approved by a majority of qualified electors of the city. Projects that require such authorization are those composed of dwellings for persons of low income, financed in whole or in part by the Federal government or a State public body or when certain types of assistance such as labor or loan guarantees are provided.
B. In 2004, voters in Sacramento County approved a measure to comply with Article 34 which authorized the development of a specific number of affordable housing units which expires in 2024.
C. Sacramento County is proposing to submit a measure to the qualified voters of the County at the November 2022 General Election to authorize the development, acquisition or construction of housing for low-income persons and families in an amount of up to one (1) percent of all existing housing units in the unincorporated County of Sacramento and all incorporated cities within including Sacramento, Elk Grove, Citrus Heights, Folsom, Galt, Rancho Cordova, Isleton to be in compliance with the State of California’s Article 34 requirement. It is proposed that the number of authorized but unconstructed housing units in each year will be carried over from year to year.
D. In 2021 the annual amount of affordable units that would be authorized by jurisdiction based on 1 % of the housing units is outlined below. This number will change as new units are constructed.
City of Sacramento- 2000 units
E. Should this measure not be approved, all cities and public agencies within Sacramento County and the unincorporated area of Sacramento County would be out of compliance with the Article 34 requirement and would be unable to assist with the development, construction or acquisition of affordable housing after 2024.
Updated 10-15-19
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. All evidence presented having been duly considered, the findings, including environmental findings regarding this action, as stated above, are found to be true and accurate and are hereby approved adopted.
Section 2. The City Council of the City of Sacramento hereby acknowledges the Article 34 ballot measure proposed by the County of Sacramento and approves the City of Sacramento’s inclusion in the ballot measure.