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New housing under construction in Santa Rosa
New housing under construction in Santa Rosa

Sonoma County Housing
Who Gets What, When and How?

Jun 30, 2018
by Vesta Copestakes

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By Vesta Copestakes

The devastation of our October Fires is having an impact on decades of land-use and transportation planning. 5,000 plus homes got destroyed in the fire and now the county wants to build more than 30,000 new homes to replace what was lost, and ease the high price of housing by changing the supply vs. demand ratio.

The word RENTAL is associated with AFFORDABLE HOUSING. This is where I feel it’s time to speak up and encourage people to be less reactionary to today’s housing CRISIS (another over-used word) and consider the FUTURE while trying to solve problems in the present.

There’s a push to open protected lands and community separators to development. This goes against what our county has worked so long to achieve. The urgency people feel now could be more DE-structive than CON-structive in the long run. Evaluating the potential consequences of decisions made today is essential if we are meet the present - and the future - with solutions that don’t turn around and bite us in the long run.

Within the last 20 years, housing prices have risen and plummeted.

When prices were high people were concerned that their children could not afford to stay here when it was time to purchase their own home. That changed when prices fell drastically. Low prices opened the doors for people with good credit and money in savings accounts. First-time buyers saw opportunities. So did investors with cash who bought foreclosed homes. It wasn’t that long ago yet people seem to have forgotten that the housing market rises and falls over time. This CRISIS is one that repeats itself over and over.

Renters will always be at the mercy of landlords. Home-ownership has the potential to freeze the cost of a mortgage (rent) with a fixed rate loan. The roof over our heads becomes an investment as well as shelter. This takes a fair amount of stability, foresight, concern for the future, and planning.

The words I hear over and over are that housing is too expensive to get into. BUT, there are ways around that with compromises to be made in order to accomplish home ownership on a tight budget.

Is there a different way? Personally, I think there is.

Right now our cities and county are considering building low-income housing. That is a major investment in real estate. Where I come from these were called The Projects, and it didn’t work out well over time. These developments are filled with low-income families who have none of the comforts and security of HOME. Buildings become old and fall into disrepair.

Our aging neighborhoods also have homes that have fallen into disrepair, the owners have died, neighborhoods have declined, etc. but everything that is needed for housing is already there. Electricity, water, sewer, communications, etc. Infrastructure exists and functions so none of the expense of building infrastructure is necessary. Repair permits are many times less costly than new construction so even the permit process is a money-saving benefit.

When old homes in aging neighborhoods are repaired, the whole neighborhood rises with the “new” home instead of declining with the “old” home.

I recently spoke with a woman who makes a living finding the worst home in a neighborhood, rejuvenating it, then selling it to a new owner. She said neighbors thank her every time the home is finished. She does two to three of these a year, each one is a success story for the new homeowners as well as the neighborhood, and of course, the woman doing the restoration. She makes money and she feels the benefits of restoring a home to its former glory.

This is where county funding comes in.

Burbank Housing and Habitat for Humanity both work on building affordable housing for low-income people who qualify for a home loan but do not have the down payment. Burbank uses “sweat equity” as the down payment. People work together in a community to build their own homes. They learn a lot, they bond with each other, and they end up with a home they can afford. What makes this work is that the homeowners qualify for a mortgage loan. If a person can pay rent, chances are they can pay a mortgage.

What role does the county play?

Our government becomes what is known as an Equity Share Partner. They OWN 50% of the home in exchange for the down payment, which would have to be a minimum of 20 - 25%. The homeowner makes all mortgage payments, pays all taxes and maintenance, and when the homeowner can afford it, s/he refinances the house and buys out the county partner at fair market value so the county makes money on their investment. That income could be turned around to invest in more housing to help more people over time.

The BIG BENEFIT is that these homes are OWNED, not rented, and the home OWNERS take pride in their homes so the entire neighborhood benefits. 

It’s not like offering living space to someone for free or subsidized housing where the person living there has no personal investment in the property. People who qualify for, and are responsible for loans, have the risk of losing it all in a foreclosure, which is why the down payment has to be a high percentage. If they fail, the county (co-owner) can take over the payments so it can resell without losing money. If the county holds the mortgage instead of a finance company, the county gets the house to resell.

Personally, I think this is a win/win for the homeowners (they stop being renters), neighborhoods ( old homes get fixed up), and the county (they invest in real estate that has the greatest opportunity to benefit people, our community, and the health of housing in our communities).

An Equity Share Partnership is how I bought my house nearly 30 years ago. Over time I have watched others in my aging, low-income neighborhood fix the homes they live in and bring the neighborhood up with each house restored. Restoring aging neighborhoods can be a solution to both affordable homeownership as well as preserving Sonoma County open spaces into the future.   

Comments:

Jul 7, 2018
SUBMITTED VIA EMAIL: I am writing this email in Response to Vesta Copestakes July 2018 front-page article on: "Housing: Who gets what, When & How?" Unfortunately, I think Vesta may have infused her usual reasonable premise for presenting a viable solution for a complex issue with her own personal bias regarding what she termed, "The Projects," as a term for Low-Income-Housing, because as she wrote: "Where I come from these were called: The Projects, and it didn't work out very well over time." … Vesta further writes: "These developments are filled with low-income families who have none of the comforts and security of HOME. Buildings become old and fall into disrepair." This opinion coming on the heels of the county of Sonoma considering building low-income-housing or affordable housing. Buildings falling into disrepair can be maintained rather than having a scenario as painted by Vesta. There is no reason that maintenance isn't and can't be mandated as part of the units safety and esthetics by a proper board and agency. Her argument for having home ownership as designed by Burbank Housing and Habitat for Humanity via "sweat equity' in exchange for not having a down payment as an example of a way around the housing dilemma with a compromise being made by those on a tight budget. Which from my viewpoint has many flaws. While sounding all well and good on paper, and, yes, some individuals and families do qualify for the mortgage and subsequent homeownership, while most who are currently experiencing lack of housing or marginal housing, will not be able to do so. Vesta states further: "If a person can rent, chances are they can pay a mortgage." This line of reasoning doesn't take into account or the equation that not only is there a housing CRISIS in Sonoma County as elsewhere, there are significant numbers of people currently patch-working- housing and/or without housing who are jobless, under-employed, aging and aged, while many are homeless. These people do not have "Sweat Equity" as an option except in rare instances. Most likely displaced persons have not kept up their credit and have zero savings; if they have managed to maintain a bank account at all. I respectfully disagree with her opinion and what appears to be a bias toward rentals and low-income housing or affordable housing for those who are in need of this social program reality. "The Projects" may have been a disparaging term in her former community but for many, In the past and currently, this has been a life-saver and people have been grateful to have a place to call: HOME. We can always change the paradigm to meet the needs of the times and find language that has more positive connotations, however, realistically, we cannot change the circumstances or outcome of people's life situation which brings them into a culture and cycle of poverty - one often created by our capitalistic policies favoring the well-off over the poor. I admire Vesta having found a personal solution in her own life for having participated in a Equity Share Partnership, however, I feel this is a limited solution, and what is needed is genuine economic support toward building and making affordable housing available to the many citizens in our county in need and across the country. Poverty has long been stigmatized and this includes people who are low income or living on fixed incomes who must rent, who do not wish or need to purchase a house in order to have a place to call HOME, I feel poverty, on-the-edge, and aging people need to be viewed in the light of benevolent regard by others and policymakers and our city planners and the government. WE THE PEOPLE - Respectfully, Roberta Llewellyn
- Vesta Copestakes
Jul 10, 2018
VIA EMAIL: Vesta referenced Equity Share Partnerships in her most recent Gazette op-ed, The core idea is that a public agency becomes a co-investor with a citizen to overcome the high cost of entry for homeownership. Here is an excellent article on the subject: Shared Equity Models Offer Sustainable Homeownership - https://www.huduser.gov/portal/periodicals/em/fall12/highlight3.html and recent examples: Shared Equity Programs Gain Popularity for Municipalities, Private Investors - https://downpaymentresource.com/shared-equity-program-models-gain-popularity-municipalities-private-investors/ It seems that there are existing mechanisms and resources that could make a significant increase in access to workforce mortgages by the community becoming the developer including: - Private housing real estate investment groups creating an equity share partnerships - Land Trust arrangements - Habitat remodels - Lowered permitting costs and fees - Local banks with increased flexibility, i.e. land plus construction loans Jay Beckwith, Healdsburg
- Vesta Copestakes

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