North Bay affordable housing gets built, but much more is needed

Sacramento has made it clear with more legislation in 2022 that it means business about building more housing, particularly what’s in reach for California households with below-median earnings.

And while hundreds of such dwellings came out of the ground or were completed in the North Bay this year, they’re often just scratching the surface of what’s needed locally.

The Golden State needs to build 2.5 million housing units in the next seven years to fill a projected shortage, more than double the goal from the previous planning period, according to the California Department of Housing and Community Development. And at least 1 million of those units must be affordable to low-income households.

“Affordable” by government definition means rents will be restricted to tenants earning up to 60% of the annual area median income. Some units have rent caps for “very low income” (30%–60% of AMI) and “extremely low income” (15%–30% of AMI).

“Our wait list for a new PEP housing complex currently has 300 names,” Mary Stompe, CEO of Petaluma Ecumenical Properties Housing, told the Business Journal in July. “This is the first time we have had to close the wait list in our 44-year history.”

And while builders have constructed about 19,000 affordable dwellings in the past two years, the pace must quicken to over 10 times that production level to reach what California Housing Partnership estimates is needed to close the gap, CalMatters reported.

But a jump in construction costs such as labor and certain materials in the pandemic has complicated that goal. The Press Democrat reported that it costs over $700,000 a unit to build affordable housing in Sonoma County, and that ramps up to more than $1 million a unit in San Francisco, the East Bay and Silicon Valley.

Some developers have turned to prefabricated modular construction to help lower costs, by as much as 20% through faster delivery and more efficient use of materials, according to McKinsey and Company, the paper reported. One such local builder is Vallejo-based Factory_OS, which has built over 1,500 modular units from its Mare Island plant for affordable and corporate projects around the Bay Area, but early this year it produced the first units for local projects, 75 for a Vallejo apartment complex, the Business Journal reported.

In the past two years, Sacramento has moved through dozens of laws intended to ramp up housing construction. So far this year, Gov. Gavin Newsom has signed a dozen-plus bills that allowed certain housing types to bypass what can be lengthy local approvals before construction. One allows duplexes and fourplexes on land previously zoned for single-family homes, and another gives the OK for apartments on certain commercial properties, such as retail centers and office buildings.

Here are some North Bay affordable-housing projects have moved into construction this year:

• Burbank Housing and Abode Services are building 90 units in two projects on 4 acres at 3700 and 3710 Valle Verde Drive, in northeast Napa. Heritage House is being converted into 66 apartments. On vacant adjoining land, the 24-unit Valle Verde Apartments project will have 24 units.
• PEP Housing completed 54-unit River City Senior Apartments at 951 Petaluma Blvd. in Petaluma.
• In east Santa Rosa, PEP built 26-unit Linda Tunis Senior Apartments at 600 Acacia Lane.
• Set to open early in 2023 is 60-unit Pony Express Senior Apartments in Vacaville, a project by PEP Housing San Rafael-based EAH Housing.
• MidPen Housing is building 44 affordable units at 414 Petaluma Blvd. N. in Petaluma. Completion is expected in fall 2023.
• USA Properties fund started the 164-unit College Creek apartment project at 2150 W. College Ave. in Santa Rosa.
• Kingdom Development completed the 24-unit Cherry Creek Village at 520 S. Cloverdale Blvd. in Cloverdale.

Jeff Quackenbush covers wine, construction and real estate. Before coming to the Business Journal in 1999, he wrote for Bay City News Service in San Francisco. Reach him at jquackenbush@busjrnl.com or 707-521-4256.

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Correction, Jan. 3, 2023: MidPen Housing’s 414 Petaluma Blvd. N. project is expected to be completed in fall 2023. It wasn’t completed in 2022.