Position and Proposals on Affordable Housing
November 14, 2016

Dear City Council Members and Concerned Stakeholders:

In anticipation of the upcoming study session regarding the implementation of a rent mediation program in Albany and the ongoing review of viable means for addressing the need for additional affordable housing, below please find a detailed statement of potential solutions to rent control.

As opposed to rent control measures and their unavoidable imposition of negative consequences and ill-will within the population, these alternative measures present more targeted, more efficient and ultimately more effective solutions that can and indeed should garner support from all concerned residents as opposed to a select few.

Upon review of these proposals, APRA is requesting that the Council incorporate three items into its agenda as soon as possible:

1. Calendaring of a series of Study Sessions to solicit full participation from stakeholders in a discussion of alternative solutions to rent control with a mandated report and recommendations to the Council upon the outcome of those sessions.
2. Setting a Council meeting dedicated to the discussion of alternative solutions in addition to the mediation program now being considered.
3. Adoption of a resolution to cease any consideration of the implementation of a rent moratorium or just cause evictions pending determination and implementation of mutually agreeable alternative solutions.

With a commitment of the City Council and concerned stakeholders on all sides of the issue to work together in a proactive fashion to debate, formulate and ultimate enact sensible measures to address affordable housing needs in Albany, we can successfully create meaningful and lasting solutions to a concern that affects us all without disenfranchising entire sections of our city through resort to drastic and harmful policies that have been repeatedly shown to do far more harm than good.

By this approach, we can eliminate any potential need for radical short term stop-gaps and ensure that a pragmatic and timely plan is developed with bi-partisan support. In so doing, we can make the people and the City Council of Albany a prime example of how citizens and local government can score major victories for the good of the whole community by coming together to reject politically driven one-size fits all agendas and address real needs with well thought out actions.

On this basis, APRA respectfully submits the following concept as just one example of how alternative thinking can result in viable methods for addressing affordable housing in Albany.

Affordable Housing Subsidy Funding

Time to Implement: Short
Cost to Establish: Low
Oversight Complexity: Minimal
Sustainability: High

Funding

According to the US census in 2010, there were 3811 rental households in Albany. Assuming this number remains relatively accurate and accounting for the approximately 974 exempted rental units in Albany Village, this means that there are roughly 2837 units in the city which are currently subject to an annual rental business license fee.

If a one-time business license fee increase of $50 per unit were to be implemented by the Council for the next fiscal year only, this would equate to funds in the amount of $141,850.00 from this source alone. Thereafter, if the Council were to vote in a $13.00 annual fee increase (raising the rate from the current $87.00 to $100.00) this would result in additional annual funding of $36,881.00. Total funding by 2018 would then be a minimum of $178,731.00.

If the City were to match initial funding via this source with an allocation from the general fund, that would result in initial funding of $283,700 and funding in the amount of $357,462.00 by 2018. Even if the City were only to match the subsequent increase of $13.00 beginning in 2018, this would still result in a minimum fund amount of $215,612.00 by that year.

Earmarked funds for matching by the City could come from a number of revenue sources including a very modest increase on other types of business licenses in the city, a minimal increase to the local documentary transfer tax, or a minimal increase to the sales tax. If such measures would require longer periods of time to enact, the City could also make its matching contribution to the fund in the form of a loan, repayable from other revenue sources over time.

Once established and initially funded, a bond measure to could be drafted and placed on the ballot to ensure permanent funding while continued bridge funding was maintained through the relative rental license fee increase and City matching.

Even without accounting for long term funding, the lowest contemplated fund amount for the coming year ($141,850.00) would create a hardship subsidy fund capable of providing up to $295.00 of assistance per month to 40 qualifying applicants. With a matching contribution from the City this would result in that same level of assistance to either 80 qualifying applicants, or longer or greater levels of assistance to the same number of applicants. Factoring in a subsequent rental license increase of $13 on an annual basis this would raise the minimum level of assistance for 40 qualifying applicants to $372.00 per month and with City matching, assistance could top out at $372.00 per month for 80 tenants or a rate of $295.00 per month could be made available to approximately 100 qualifying applicants by 2018.

Given the number of tenant participants in the affordable housing debate to this point, a fund of this nature would be capable of providing assistance for every single one of them and up to as many as four other impacted persons on whose behalf they are speaking for no less than one year, assuming that minimal qualifications were met.

Clearly, the creation of substantial form of assistance for existing and new tenants in the City is well within the realm of near immediate achievability. Coupling this fund with sensible qualification parameters to ensure that aid is directed to those truly in need would all but assure a major impact upon housings for the impacted members of our community.

Potential Assistance Qualification Parameters and Administration

1. Applicant must show proof that they have lived in Albany for the past 2 years. Once the fund has a permanent revenue stream, availability could be expanded to new resident applicants.
2. Applicant must show proof that their annual rent represents more than 50% of their gross income for the past year and that their monthly rent is more than 50% of their current income. Tax returns shall be used as proof for last year of income and a current paystub and employer verification should be used for current income.
3. Applicant may not have more than 36 times the proposed monthly subsidy in savings.
4. Applicant must be compliant with all current lease terms, have a neutral recommendation from their landlord and must be on the rental agreement as either a tenant or an authorized sub-tenant.
5. Applicant isn’t receiving subsidies from any other government or private program.
6. If Applicant’s unit may not exceed a ratio of one bedroom per adult occupant.
7. Applicant must requalify for the program annually with re-certification 60 days before the anniversary of the first subsidy payment.
8. Priority application similar to BMR program with priority given to Albany residents and persons working within the city limits. Additional priority given to persons who are physically disabled, senior citizens, and lower income brackets. Priority consideration potentially available to families with children in Albany schools and single working parents.
9. Subsidy payments directly to landlord for proscribed rental portion.
10. Fund administration to be managed by volunteer panel of tenants and landlords.
11. Maximum available aid for any single unit would be $500 for up to 2 years.

The foregoing represents just one example of how one of many potential solutions to affordable housing issues in Albany could take shape. Below you will find an outline of additional concepts that could be developed and established with a relative degree of ease as compared to the implementation of a contentious and potential abusive rent control program.

Additional Alternative Measures for Discussion

Incentives to Maintain Affordability

Short Term Actions

1. Create city endorsed lease form that would render adopters exempt from license fee increases. Adoption would be voluntary, thus enabling the creation of terms that the City on its own could not necessarily impose. The following features could be included:
   • Two-year term
   • Limitation to one rent increase annually after initial term
   • Requirement that any rent increase exceeding 15% come on 90 days-notice and increase exceeding 25% come on 120 days-notice
   • Lower amounts on first/last and security deposit than current set by Civil Code 1950.5
   • Agreement to participate in non-binding mediation when notice is given of tenant financial hardship (meeting certain predetermined criteria)
2. Documentary transfer tax rebate up to certain cap for new owners who maintain below market rents for at least one-year after acquisition (with “below-market” to be appropriately defined).

Mid-Term Actions

1. Establish city sponsored affordable housing web-based portal where units featuring below market rents can advertise for free.
2. Utilize portion of tax/fee-based funding to create owner assistance fund where subsidies can be obtained in the following situations where owners maintain below markets:
   • Property inheritance with renovation or tax bill needs within one year of acquisition
   • Property acquisition with renovation plan presented within six months of acquisition
   • Annual assistance with mortgage obligations where profit margin is insufficient to meet maintenance or basic income needs

Long-Term Actions

1. Establish funding program for the creation of a local BMR program with rebates to participating owners or developers.

Incentives for Additional Housing

Short Term Actions

1. Reduction in new construction permit fees for residential unit creation.
2. Rebate on documentary transfer tax for new owners who meet 100% zoning capacity of residential units on acquired parcels within two years of acquisition.
3. Eliminate employee business tax for owners who employ a resident as a property manager in lieu of rent.

Mid-Term Actions

1. Undertake comprehensive review of zoning and residential unit qualifications that presently constitute unnecessary restrictions on the addition of housing units and establish working plan to eliminate such restrictions.
2. Establish a home share program where private homeowners can make residences available upon set terms that do not include monetary consideration (Similar to concepts now set for discussion by Vice-Mayor McQuaid).

Long-Term Actions

1. Create ballot initiate to establish public funding for subsidizing new residential construction with mandatory percentage of collected rent contribution back to public fund after 1 year of at least 75% occupancy.
2. Implement changes at local legislature level as recommended by mid-term planning for reduction in legal barriers to addition of residential housing.

Ultimately, what the Council and the community as a whole must understand is that there a tremendous number of alternative solutions to the affordable housing needs in our city.

The unique beauty of Albany is that given the relative size of the city, the housing make-up, and the nature of the stakeholders involved, we are largely capable of achieving progressive and proactive solutions that might ultimately prove elusive to larger cities.

The enactment of rent control or any ordinance that goes part and parcel with it, ultimately does a disservice to all us. Rent control benefits a select few, while harming a great many. Albany does not need this. What we do need is serious people, ready to have a serious conversation.

The members of APRA are ready, and we hope you will join us.