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About this blog: I am a native of Alameda County, grew up in Pleasanton and currently live in the house I grew up in that is more than 100 years old. I spent 39 years in the daily newspaper business and wrote a column for more than 25 years in add...  (More)

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How much housing subsidies cost other renters

Uploaded: Jun 3, 2021
Pleasanton attorney Peter MacDonald knows his way around planning and land-use issues.
He’s been in private practice for 33 years here after serving as city attorney for six years while the city processed Hacienda Business Park and three other business/retail parks (Bernal Corporate Plaza, Signature Center and the Pleasanton Square (Home Depot) with the surrounding commercial buildings and retail outlets). Incidentally, the city averaged about 1,000 units of new housing each year during that time.
He’s railed at inclusionary zoning and its impact on housing costs to say nothing about limiting supply. MacDonald addressed these issues in a strongly worded letter to the City Council dated May 17. He pointed out that it would take one billion dollars in subsidy to meet the goals in the city’s new Regional Housing Needs Allocation of 5,965 units.
He wrote, “Under the California RHNA system, the California housing market now operates with Soviet efficiency; big on goals and objectives, overrun with bureaucratic processes, bristling with sanctions, and disastrous performance in producing real housing affordability. With housing supply caught in a pincer between local exclusionary zoning and the insurmountable millstone of inclusionary zoning costs, California housing supply has slowed to a crawl despite double digit housing price increases year after year.”
MacDonald pointed out that the average one-bedroom apartment rents for $960 nationally. The average in Pleasanton is nearly 3 times that much at $2,535. That number has not dipped much even with the addition of about 1,000 new apartments in the last couple of years. You see lots of for rent signs around town because there’s competition and availability.
He provided the council with a detailed chart showing how much rent subsidy was required for each category of housing (very low-income, low-income, moderate, above moderate). He calculated the annual subsidy required of more than $51 million. To cover the subsidy, market rate renters pay more than $13 additional for every dollar of subsidy.
MacDonald suggested a solution in an earlier letter to Gov. Gavin Newsom. He recommended using the size of the unit instead of the rent as the basis. That introduces the concept of building in affordability in design by constructing smaller units. Given the size of homes built before McMansions came into style, we are living in much larger spaces than most of our parents did.
The state needs to drastically reform the California Environmental Quality Act that has become a tool for unions and greens to obstruct or slow housing development. For politically influential people—think the owners of the Golden State Warriors and the Los Angeles Rams, the Legislature passed bills that limited the challenges and the time available to challenge. Extending that across the board and reforming other burdensome aspects would be a welcome next step.

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Posted by Lahommed, a resident of Dublin,
on Jun 3, 2021 at 12:44 pm

Lahommed is a registered user.

Nobody in the 70s 80s and 90s had their eye on the ball.....too much money to be made. Now the valley is experiencing growing pains such as housing, water, transportation, crime. We as a whole did not address the issues that haunt us today back then. Nothing today that is haunting us is new. So now we have representation today that must address that which was not before. If the valley is to thrive in the future it must be led by the reps of today....ball is in your court Livermore, dublin and what you gonna do?

Posted by, a resident of another community,
on Jun 4, 2021 at 9:46 am is a registered user.

Market rates are NOT the byproduct of subsidy amounts. Subsidy calculations are based on the average market-rate rental cost. It is my understanding that the Public Housing Operating Fund provides the subsidy 1*(, 2021) funds for public housing; Further, it is my understanding that HUD (Federal Government Funds) also supplement (in full) the Housing Choice Voucher (previously known as section 8)
2*(, 2021).

Hence, can you detail how you came up with the calculation that market renters pay an additional $13 dollars per dollar of subsidy? While, HUD does only offer a limited number of vouchers, HUD currently and historically, is quite generous with offering funds to developers and communities who seek to establish below market and low-income housing developments in communities; In my observation, it is usually the communities that push back on the development of such structures; In my observation, there are too many fallacies associated with the idea of what below markets and low-income units "do" to communities. Thus, as mentioned, can you detail where you obtained said calculations in the $13 dollar burden you describe? I will humbly stand corrected if I am wrong as this is merely what my understanding, and observation reveal. I provide links to my references below if you wish to re-interpret what I have read to gain this understanding. I am grateful that we (as a community) open this conversation.

1*- (2021). Public housing programs. Retrieved from Web Link

2*- Hud.Gov. (2021). Housing choice vouchers fact sheet. Retrieved from Web Link

Posted by Jan Batcheller, a resident of Downtown,
on Jun 6, 2021 at 8:09 pm

Jan Batcheller is a registered user.

Peter MacDonald is thoroughly knowledgeable on this matter.
Affordability by design and significant reduction of government fees are necessary to begin solving this massive problem. It requires the genuine desire and will of elected officials to tackle this problem.

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