ESCONDIDO – The Escondido City Council discussed Sept. 1 what the city should consider when reviewing and making recommendations on middle-income housing proposals.
Amid a statewide housing shortage, developers and financing authorities have been asking the city about buying multi-family projects to use as income-restricted housing for people of moderate income.
City staff asked the council for input on what factors they should be looking for when considering these different proposals.
According to the staff report, middle-income housing is defined as housing that is attainable to 80-120% of the area median income (AMI). Traditionally, these are teachers, construction workers, maintenance and repair workers, community and social services, administrative support and protective services.
“There are few units restricted to the top of the low-income scale. Planning efforts have been made to help encourage additional housing to help stabilize rents, but there’s been little done to make additional housing available for middle-income households,” said Karen Youel, housing and neighborhood services manager.
The council considered two models for creating middle-income housing.
The first, known as the Bond Model, includes the issuance of middle-income bonds. The Joint Powers Authority (JPA) would issue the bonds and rental rates would be income-restricted for moderate-income individuals throughout the life of the bond.
Once bonds are repaid in full (by the JPA), ownership of the properties would be transferred to the city.
The second, called the Loan Model, includes a loan from the city to a developer for the acquisition of a property. A developer would purchase an existing Class B or C property and request a small, below-market-rate loan from the city.
This would allow the city to establish and enforce long-term (up to 55-year) recorded affordability restrictions on a portion of the units in a project.
The council decided to move forward with the Bond Model in moving forward with middle-income housing.
Councilman Joe Garcia emphasized the importance of the (Regional Housing Needs Allocation) RHNA numbers.
“RHNA qualifications are, I believe, something that should be taken into consideration when we’re looking at these proposals,” Garcia said. “It’s a long-term investment that we’re doing as a city by giving up revenue, and I think that is something that will be very helpful to us.”
Councilman Mike Morasco disagreed, saying that RHNA numbers are important, but should not be a priority.
“One could say that RHNA numbers are asinine and aren’t based on anything realistic… RHNA numbers for the City of Escondido are so out of whack and out of proportion. I understand it’s important… but there’s no way in the world we’re going to ever get to 9,600 units so that’s not a priority to me, it doesn’t concern me,” Morasco said.
Morasco went on to recommend that the highest priorities should be providing the highest quality possible when it comes to housing and limiting the loss of property taxes.
“This is, in my mind, innovative in terms of how to get people into houses. I think it’s a good thing, but I also know there’s no such thing as a free lunch, so we have to be careful,” said Mayor Paul McNamara.
