How to reduce Sonoma County housing costs to build the workforce: Santa Rosa chamber CEO

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Peter Rumble was named CEO of Santa Rosa Metro Chamber in January 2018, coming from stints as Sonoma County director of health policy and deputy administrator.

At the county, he helped launch the Sonoma County Energy Independence Program. During the October 2017 fires, he was one of the leaders in guiding emergency response.

Ahead of the Business Journal’s May 29 Building the North Bay conference, at which he’ll be speaking, we talked with Rumble about the scope of the housing challenge facing the region, what it means for economic growth and potential solutions.

What has your organization been doing for the postfire economic recovery and rebuild?

We focused on a number of initiatives, not just with fire but also now with the (February west Sonoma County) flood to help economic recovery and rebuild. They range from supporting housing construction, as well as financial assistance to businesses to weather the storm, so to speak.

On the housing front, primary among our efforts is the employers’ housing council. This is a group of the largest employers in the county, a group of around 15 employers coming together to take care of a few goals. The first is to continue to keep a focus and a pressure on building the housing that we need for the workforce that we have today as well as the workforce that we need tomorrow. That’s certainly around rebuild, but we need to look beyond rebuilding.

I think it was then-Mayor (Chris) Coursey who said it best: We can’t afford to rebuild back to a housing crisis. We need to continue well beyond simply rebuilding. That’s goal one.

The second goal is to receive presentations from individual developers and consider directly participating in individual projects, either through lease agreements or direct investment.

Third, we are putting together a local housing trust. This is a pool of funds raised through local capital development — corporate donations, foundation donations, private investment — to be able to make a pool of funds available to developers for the costs that typically aren’t available through banks, or whatever that development might need to help get a project off the ground. So that’s a massive effort on the housing front.

How are things progressing?

Very well. We have had a number of meetings, have heard presentations from different projects, and have had follow-up conversations on those projects with individual companies to see if there’s something to be worked out on a one-to-one basis.

We are very close to launching the housing trust. We’re working out some details under the surface for how it will work and what criteria will be used to select projects. A great example of what we are building through this is the Monterey Bay Economic Partnership. In the span of a couple years, they launched the housing trust and were able to invest in four projects. Several hundred housing units were able to be built in the tri-county area of Monterey, Santa Cruz and San Benito counties.

How large of a trust would this be?

We have, certainly, ambitions. It’s a revolving-loan fund, so it’s not a grant program. The dollars will continue to build on themselves over time. It’s also not the Google Foundation. We’re probably talking in the range of $15 million–$20 million. That will handle a couple projects at a time. Over time, those investments would be paid back and then be made available for future projects.

That’s aspirational right now. That money is not in the bank. That’s the goal we’re shooting for.

You talked about the housing council and helping businesses recover not only from the firestorm but also from the flooding. What still needs to be done?

Let’s talk about housing first. We need to continue to the reforms that we’re seeing in downtown Santa Rosa. We need those reforms elsewhere through the city to make it easier for all development.

We are certainly short on multifamily housing to significant degrees, particularly in our downtown core. But we also need single-family homes; we also need lower-density development throughout the city. And not just Santa Rosa but all the cities within the county, and to some extent, even the unincorporated areas.

If you look at all of our general plans in the county, and you add up what have already been adopted and agreed on, that’s how we can come to a 30,000 (housing unit) number that we need countywide. The bulk of that is going to be city-centered, not in our agriculture and our open-space lands. If we’ve already set that as a marker, we need to make it easy to achieve that goal.

So, continued regulatory reform, financial reform, permit costs, building costs, etc. I commend the city, both at a staff level and a council level, for taking the necessary steps for downtown. They’ve been amazing.

Even though we have a high income burden for housing in Sonoma County, we also have lower wages in Sonoma County and the same building costs as we do for other parts of the Bay Area. Right. So we can’t have the same kind of revenue flow for a project that you would need to cover the building costs of that project. We need to look for every way possible to help a project be financially feasible.

We need to look for help from the state. There’s a significant amount of funding available that can be used to expedite housing here, to help make housing attainable for people who live here but also make it financially feasible for the developer to actually get a project done.

We need to do it, not just for the housing needed for individuals, but also our employers are having a heck of a time attracting and keeping people here because of housing costs or simply the availability of housing.

Looking back to a statewide poll during the most recent gubernatorial race, about 60% of the current workforce is considering moving outside of California because of the cost of housing. And we had 58% of families with children recommending to their children that they leave the state because of the inability to build capital in the future because of the cost of housing. That’s a huge impending economic crisis, in terms of our workforce. So we need to continue to push not just for today but for tomorrow.

You mentioned reforms through the city council and staff. How is this environment now?

From my perspective, it has certainly changed for the better in significant ways, particularly when we’re talking about our downtown.

We need to continue to encourage the welcoming sentiment throughout the county and throughout our city. Staff as well as elected officials are doing everything that they can in their power to help projects move forward, weighing public interests and making sure that projects will benefit the community. It’s not a giveaway; I don’t mean to imply that.

We’re seeing the fruits of that, to some degree with the approval of Hugh Futrell’s multifamily project on Fourth Street not too long ago. That is certainly benefiting from the fee reduction, the cost reduction, as well as the time guarantees that are in place from the city.

We’re seeing projects go through the entitlement process on Mendocino Avenue. We’re seeing steps in the right direction, from projects going through the entitlement process or property being purchased for development.

What progress is there with other market-rate housing projects?

We need it all. When we’re talking about affordable housing, we shouldn’t forget about market-rate housing. And when we’re talking about market-rate housing, we obviously see a need for affordable housing as well. We need housing across the spectrum, and the answer lies in everything, not one or the other.

We have an absolute shortage of housing for doctors, as much as we have a shortage of housing for housekeepers. And so the chamber cares about the entire spectrum and is certainly working across that spectrum with developers of all kinds of housing,

Burbank Housing is active, and we are actively supporting them in their efforts. They would like to do more. There are other developers who are including affordable components in their overall market-rate projects. So it’s not necessarily an exclusive, 100% affordable project versus 100% market-rate project.

You said there’s a need for housing across a wide spectrum. One of the things I’ve heard from some of the builders in the rebuild area, especially Fountaingrove, is that there has not been the same kind of community effort as there has been in Mark West and Coffey Park to help move things forward in mass rebuilding? Are there efforts to help spur organizational efforts in Fountaingrove?

I don’t know the comment exactly, so I’m not sure that I can respond to it precisely. When we’re looking at the overall rebuild effort, there are significant differences between Coffey Park and Larkfield and Fountaingrove. Sites are different. Sites are bigger (in Fountaingrove). They’re not as cookie cutter. They are more like large custom home building operations, rather than a handful of designs and being able to move more quickly through the process.

I also think that there is a lot more uncertainty about whether or not people will rebuild or not in Fountaingrove than there is in other areas of the community. That’s my speculation. I have no data, other than my friends going through the rebuild process and all of theirs. That might be another reason, tacked on to the more complex and difficult process itself.

I will say that we need rebuilding to happen and as expeditiously as possible. We need to keep the people who lived here before the fires living here after the fires. We’re not more or less concerned with rebuilding in one area.

Stepping back into the general economy, how do you see local business formation, expansion, retention, attraction?

I can’t emphasize enough that the linchpin really is housing and our education system. Employers aren’t going to move up to Sonoma County if it’s difficult for them to house their employees, or difficult for their employees to find housing.

We need to step on the accelerator on housing, to make it an environment appealing enough for an employer to say, “It makes sense for me to move from the Peninsula, or from the South Bay, or from the East Bay, or from the Sacramento area to Sonoma County, because quality of life is higher and housing is accessible.” Right now we have a higher quality of life, but housing is not accessible anymore than it is in in other places. Certainly around the Sacramento area, it’s much more accessible there.

If we do not continue to grow, if we continue to say we should have housing like it was in 1980, 1990, — whatever it was — and not grow beyond that, then we’re forcing people to commute from Lake and Mendocino counties into Sonoma County. We see that playing out in the numbers. We have tens of thousands of people on (Highway 101), commuting into our community every day.

Which is, I might add, a demonstration of the fact that building housing will actually improve congestion in our community, not increase it. It will improve environmental conditions, not decrease them. So we need growth, not just for our health today but for our future, both in economic terms as well as just simple humanistic terms.

How is Santa Rosa’s economic growth, compared with similar cities? You mentioned the difference in housing accessibility, compared with the Sacramento area.

There’s objective data on this. We’re doing pretty good, all things considered. We’re the fifth largest city in the Bay Area, 26th largest in the state. In terms of GDP, the metro region, which covers more than Santa Rosa, is in the top 10.

The Milken Institute has ranked cities in terms of their economic vitality, and Santa Rosa ranks very well.

Our unemployment rate is under 3%, so it’s an extremely tightly labor market.

What I hope to see is a long-term investment in housing growth beyond the rebuild. That will help buoy what will certainly be a recession at some time in the future. Recessions are cyclical; we’ll see a downturn at some point.

Continued emphasis on the strengths that we have here: Our tourism economy. We have a very strong manufacturing sector in Sonoma County. We have a pretty strong tech sector as well, if you include biomedical within that. So I think that we are

We just need to continue to clear the barriers for us to continue to grow and to help us be a place of choice, both for employers as well as families.

And in removing the barriers, would that help with drip-drip leakage of businesses to the south, particularly Petaluma?

There always will be shifting (of) office locations and opportunities for manufacturing to site somewhere that might be more beneficial than others. Santa Rosa Metro Chamber certainly has a center of focus in Santa Rosa, but we’re concerned with the economic vitality of the county as a whole and even our region.

Petaluma is doing well. That’s wonderful, and I don’t see there necessarily being a contradiction to the overall economic health of our region.

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