April 3, 2018 ForaJosh

Former Fort Ord Reuse Affordable Housing Policy History

Affordable housing on the former Fort Ord has long been a subject of interest to public policy makers and the Monterey Bay community. Federal, State, FORA Board, and local land use jurisdiction policies have all been part of the policy solutions since base closure. More recently, national economic trends, market forces, and a growing recognition of the critical housing supply shortage have re-energized efforts to develop affordable housing solutions for the Monterey Bay region. This report summarizes key policies that have influenced the Fort Ord reuse process, and sets the stage for a presentation by the Monterey Bay Economic Partnership (“MBEP”) Housing Program Manager at the April 2018 Board Meeting.

Upon base closure in 1994, the Federal McKinney Act required properties transferred from the US Army under a Public Benefit Conveyance (“PBC”) to be made available to local non-profits with a Federal sponsor. The Federal Base Realignment and Closure (“BRAC”) process explicitly prioritized veterans and homeless services providers for receipt of these PBC conveyance properties. Organizations that obtained former Fort Ord Land under this program include: Monterey County Housing Authority, Veterans Transition Center, Community Human Services, and Interim, Inc. FORA recently assisted the VTC in securing additional water allocation from the U.S. Army to expand their program.

California State Redevelopment Law under the Health and Safety Code required at least 15% inclusionary (affordable) housing in redevelopment project areas. Early on in the FORA process member jurisdictions voted to increase this minimum by 5%, largely in response to housing price increases seen in the Seaside Highlands development. At the behest of Congressman Farr, the FORA Board created a Housing Task Force facilitated by FORA staff and including a diverse range of jurisdictional and regional stakeholders, housing professionals, public and private sector housing developers, the local business community, and the public. As part of this effort, several housing studies were commissioned including The Clark Group Housing Task Force Report (2003) which recommended creation of a housing trust fund to facilitate project construction, and using FORA CIP contingency dollars to produce Affordable Housing. Another study by Bay Area Economics (“BAE”), Economic Analysis of Below Market Rate Housing (2003) suggested that achieving 40% inclusionary housing within new projects would only be possible with extensive project subsidies. Ultimately the Housing Task Force recommended a target 30% inclusionary housing requirement on former Fort Ord projects. The FORA Master Resolution Amendment 8.02.020. (t) was enacted and formally established the minimum 20% inclusionary target for former Fort Ord projects and required ‘Jobs-Housing balance measures to be considered under FORA’s consistency analysis of individual projects. Practically speaking this resulted in a 30% inclusionary target with workforce housing kicking in at 21-30%. Additional Jobs-Housing Balance provisions were adopted by vote of the members of the Community Facilities District including the establishment of a tiered Community Facility District (“CFD”) structure and incorporated into the Master Resolution by Amendment in 2004. Under this provision developers providing >20% inclusionary housing could take advantage of reduced CFD fees based on a tiered structure. Since 2004, one project (Promontory Student Housing) has qualified for the Tier 1 CFD fee rate. No projects have yet qualified under Tiers 2 & 3.

More recently, the 2008 Great Recession impacted local affordable housing by eliminating the market differential between Workforce Housing and Market Rate Housing (i.e. market rate housing prices decreased). This reduced incentive for both individual below market projects and the hoped for local Housing Trust, which would have relied on contributions from local employers and municipalities. The original Housing Task Force had been impressed with efforts made by the Silicon Valley Housing Trust, and there is now the potential to engage their resources and expertise directly under the auspices of the MBEP whose recent activities in this vein are described here.  Since the recession, market rate housing prices have risen to pre-recession levels. The Fort Ord Base Reuse Plan Reassessment – Market & Economic Analysis (EPS 2012) suggested former Fort Ord home prices are too high for younger and less educated consumers, indicating need to reconfigure product types. The Fort Ord Regional Urban Design Guidelines – Market & Economic Update (SE 2014) suggested slow market-rate unit absorption reflected mismatch between Monterey County resident incomes and home prices. The Post-Reassessment Advisory Committee (“PRAC”) took up the housing affordability issue again in 2016. The committee reviewed Fort Ord reuse affordable housing policy actions, and heard from leading authorities on recommendations for achieving more affordable housing realities in California (FI 2014). The committee also explored “affordable by design” concepts including tiny homes, and leveraging public land ownership to reduce housing cost for qualified buyers, and the possibility of building partnerships among area educational institutions for sharing land, water, and other resources to create housing for Teachers. Recognizing that housing affordability is a regional challenge, the FORA Board also supported formation of the Monterey Bay Economic Partnership to bring a regional focus on this critical issue.

Monterey Bay Economic Partnership (“MBEP”) Housing Policy Report

In 2017, MBEP hired Matt Huerta to head up the regional affordable housing initiative. Working with partners at Envision Housing, Mr. Huerta produced a report titled “What Realistic Policy Changes Could Improve Housing Affordability in the Monterey Bay Region?” (2018), which was presented to the Monterey County Board of Supervisors in March. A follow-up presentation to the FORA Board was recommended by Supervisor Phillips, and will be presented by Mr. Huerta at the April 2018 Board Meeting.

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