Many cities in California are punching well above their weight to solve the housing affordability crisis. Ukiah (pop. 16,607) recently became one of the first rural cities to receive the state’s “prohousing” designation earlier this month. It is a remarkable accomplishment for a community that was once perceived as resistant to development.
As recently as the early 2000s, developers complained about the “arduous” process of getting projects approved by the residents. According to Craig Schlatter, the City’s community development director, even if that sentiment was not true, it was damaging. It sent a chilling message to developers: Your project is not welcome here.
“We quickly realized that we needed to provide more proactive customer service to the developer community, and have the developers look at the City of Ukiah as more of a partner to develop housing, than a regulator,” Schlatter said.
Under the leadership of the City Council, Schlatter and his team created Ukiah’s first housing strategy, division, and trust fund in 2017. The City also proactively reached out to developers, with a focus on developers that could build affordable housing and missing middle housing — clustered, multifamily homes like duplexes and bungalow courts.
The results speak for themselves. Ukiah has already completed approximately 70-80% of its housing element programs. In the last housing cycle, it produced triple the number of required units, and its housing trust fund was recognized as a Best Practice Community by the California Department of Housing and Community Development in 2018.
An expected boon in a challenging environment
It has become a cliché but increasing housing affordability requires nothing short of bold action, especially in rural communities. Unlike urban cities — or even popular rural tourist destinations — many rural cities simply do not have enough developers to create a thriving housing market. Rural communities also have small labor pools to draw from and less access to supplies, both of which drive up costs.
Like many cities in California, Ukiah is also built out in terms of existing restrictions and densities. There are no easy swaths of land to build large subdivisions on. There are only hard choices and land that is usually vacant for good reason.
However, working in rural communities can provide an unexpected, albeit unreliable, advantage. “One of the benefits of developing in a rural county is the intimacy of the process,” said Chris Dart, president of The Danco Communities. “We know the folks and we are not just a number.”
Danco, which is active in California, Oregon, and Arizona, is building its second affordable housing project in Ukiah. Expected to open in May, the 71-unit multifamily project will serve residents making 30-60% of the area’s median income. It will include several community amenities, such as a garden and basketball court, and four suites for future commercial uses.
City officials cannot change macroeconomic conditions. However, they can create certainty, which ultimately keeps costs low and gets projects completed. Working in an environment where everyone knows your name can make that easier.
“The City fundamentally understands the challenges developers can have trying to get housing done,” Dart said. “There are a lot of times [when] developers won’t invest in a project because they’re not sure if a community is going to accept it.”
What does reducing uncertainty look like?
Reducing uncertainty is not as simple as hanging an open sign on City Hall. It means taking specific policy actions and then broadcasting them to developers. These can vary from city to city, but the ones in Ukiah follow an increasingly familiar playbook.
For example, there was no way Ukiah could fund the number of units needed to make a dent in its housing crisis. Even the state’s new home loan program was “sucked dry” in just 11 days. So, the City took a hard look at its zoning policies.
“Zoning has been used as an exclusionary tactic at times,” Schlatter said. “The origin of zoning did not come from really positive beginnings, and I think that it’s maybe less about the preferences of community residents themselves and more about what has manifested [as] being overly restrictive.”
Working closely with residents and the state, the City made several changes. The City reduced parking minimums and developers can now choose between building more parking or more housing. Housing developers can build by right if projects meet objective standards and residential housing can be built in any commercial zone. The City also developed pre-approved accessory dwelling unit plans.
To further reduce uncertainty, the City has a checklist to help guide new developers through the City’s processes and proactively meets with developers throughout the process. The City also cross-trains staff so they can respond quickly to inquiries and personally invites developers like Danco to the community.
“We want to work in cities and communities that want housing, that value a developer’s contributions to their community,” Dart said. “We’re actively working to provide housing in other communities and that is one of our number one criteria: Are we being invited in here or are you going to be resistant?”
Like many cities, Ukiah also puts its money where its mouth is. Even though the City cannot fully fund every affordable housing project, a small amount of funding sends a strong signal to developers: This City is open for business.
To do this, the City created a housing division that aggressively seeks out traditional and non-traditional funding sources for a range of related affordable housing programs, including rehabilitation and first-time home buyer activities. Staff also work with developers and nonprofits to secure larger grants.
In the case of the Danco project, the City bought the land for the project and then sold it back to the developer, which will pay off the residual loan over the next 55 years. This allowed Danco to compete for low-income housing credits. City staff also played a key role in expediting the necessary permits and applications.
“You have to have the intentionality,” Schlatter said. “Everyone talks about the need for housing all over the state of California, but if you actually want to do something about it, you have to be very intentional about doing something about it. And that generally requires a little bit more work. But you have to signal to the developer you are open for businesses.”
A challenging, but hopeful future
For developers like Dart, the City’s “prohousing” designation is another signal in a long line of positive signals that Ukiah is not the Ukiah of two decades ago.
“The City of Ukiah has been very proactive around housing,” Dart said. “Consistently, they have been advocates of not just housing, but also affordable housing. This designation [is well-deserved] because they back it up. They’ve had a lot of housing projects done; high-quality projects [are] done … We would definitely work in the City of Ukiah again.”
To be sure, the City has a lot of work left to do. There is still a “tremendous demand” for housing and prices for houses and rental units continue to escalate. With the coming recession, it will likely get worse for many Californians before it gets better.
One issue Ukiah cannot solve by itself: A lopsided system of grants that stymies housing production. “Housing is such a regional issue with how the tax structure works,” Schlatter said. “We’ve gotten into this climate where cities can be competing with each other for sales taxes dollars and cities and counties competing [with each other].”
Still, Schlatter is excited about the future. It is not just that the staff and City are aligned and that years-old plans are bearing fruit. Nor is it that residents are becoming more comfortable with greater density. Rather, it is that cities throughout the county are working together on a regional housing strategy — another possible way of solving the housing affordability crisis.
“It would be focused on a collaborative approach to addressing housing in Mendocino County, not what the state dictates, although that will be part of the equation,” Schlatter said. “It’ll be more of a shared set of values and different rallying points where we can all get behind and take leadership as a county on how we would like to address this regional issue.”
Ukiah is one of nine new cities to receive the state’s “prohousing” designation. Other recently announced cities include Emeryville, Fresno, Needles, Rancho Cordova, Redwood City, Riverside, Salinas and Stockton.
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