Private housing trust proposal gets support from Placer Board of Supervisors
Published on November 7, 2019
A proposed framework for a new private housing trust in Placer County received unanimous support Tuesday from the Placer County Board of Supervisors, moving forward a critical initiative to increase the supply of local affordable housing.
Led by the North State Building Industry Association, forming the independent, nonprofit trust is intended to encourage contributions from private, public and nonprofit partners to help accelerate housing construction.
Placer County already manages a public housing trust, supported by developer fees that are used to help fund a variety of affordable housing projects and existing housing programs. The private trust, however, would offer more flexibility to accept and incentivize private donations and to leverage funds for grants, providing more opportunities for the private sector to contribute housing solutions.
Any county funds that are deposited in the private trust would be subject to a funds management agreement that would ensure they are earmarked for affordable housing in the unincorporated area of Placer County.
Placer will also lead the effort to establish a new housing advisory group that would advise the Board of Supervisors on the use of its trust contributions and other housing issues.
While the private trust is an important step forward in addressing the lack of affordable housing in Placer County, it’s just one of a series of housing measures Placer continues to implement. Its housing work plan outlines dozens of initiatives recently completed or already underway to reduce regulatory barriers to housing construction, incentivize affordable housing development and secure more federal and state support for housing challenges.
“We need to raise significant funds to get housing done in this county and it has to be a public-private partnership,” said District 5 Supervisor Cindy Gustafson. “I think this is a great step forward. It’s not the solution to all of our issues in housing, but it’s certainly an important avenue.”
Affordable housing projects typically cost more to build than developers can recoup with the restricted rents they can charge, with responsibility for closing the cost gap often falling to local governments — on average about $100,000 per unit, according to a recent Placer-commissioned study by BAE Urban Economics.
In August, the board directed staff to work with stakeholders to consider creation of a new private housing trust to close an expected funding gap to build 2,640 new affordable homes over the next 20 years.
Though in recent years Placer has successfully partnered with the building industry to bring forward affordable and workforce housing projects, the number of affordable units being built continues to lag behind demand.
More than 79% of extremely low income households are paying over half of their income on housing costs compared to just 5% of moderate income households, according to a recent report on Placer County by the California Housing Partnership. The federal definition of housing affordability is spending no more than 30% of gross income for total housing costs.
North State BIA representative Jeff Short said in a presentation to the board they have reserved the name “Housing Trust Placer” with the Secretary of State and will complete formation of it by the end of the year. County staff will return to the board with a proposal for the housing advisory group and a funds management agreement with the trust for their consideration early next year.
“The North State Building Industry Association and our local builders are very excited about the creation of a housing trust in Placer County,” Short said. “Housing trusts have helped build thousands of affordable units throughout the state and we look forward to collaborating with many Placer community partners on this innovative approach locally.”