For local employers and would-be employees, one of the largest barriers to attracting and retaining employees is workforce housing.
In September the Chamber – in partnership with the Economic Vitality Corporation, the Home Builders Association of the Central Coast and the California Association of Realtors – hosted a second housing summit that brought employers, developers, planners and lenders to the table to discuss the challenges that hinder and opportunities to help increase a diverse housing stock.
As part of the Chamber’s continued efforts to bring together multifaceted points of view to discuss issues effecting San Luis Obispo, we recently asked four community members to share their views on challenges, misconceptions and possible solutions to San Luis Obispo’s limited housing options.
With nearly 800 employees Sierra Vista Regional Medical Center is one of the larger employers in the county. Chief Executive Officer, Joe DeSchryver, knows firsthand how difficult it is to attract and retain employees due to the local housing situation.
As a principal planner for Oasis Associates, a landscape architecture and planning firm that she started more than 30 years ago, Carol Florence has been deeply involved with the regulatory process and development projects throughout the Central Coast.
Michael Codron, director of community development, City of San Luis Obispo, is overseeing all of the proposed housing developments that are coming online both in the downtown and throughout the community.
For more than 25 years Kevin Hauber, a senior loan officer at The Mortgage House, has been working in residential lending, including spearheading financing options that encourage building energy conservation.
Below are their answers.
From your industry perspective, what needs to change to generate more housing options?
Joe DeSchryver – Affordable housing is the single most frequent factor cited by employees who voluntarily resign or simply don’t consider relocating to work at Sierra Vista Regional Medical Center. Of our nearly 800 employees, the vast majority are considered head of household jobs. Coupled with the highly specialized skills and advanced education we often require, our wage index, I suspect, is higher than most businesses in San Luis Obispo County. Yet, we continue to be challenged recruiting and retaining talented employees particularly for highly skilled positions due to lack of housing options.
Focusing on a different definition of what “affordable housing” in San Luis Obispo County should look like; supporting Cal Poly in moving more students onto campus so what today is student housing becomes what it is intended to be, “workforce housing.” Builders should also be encouraged and incentivized to pursue projects with density in areas that are appropriate for infill.
Carol Florence – Some things are a “given” – property is expensive, government fees are expensive, and the other factor is the market place, which more times than not, can’t be easily reconciled, as someone who invests cannot obtain the profit to make the investment work (e.g., the rents that one can charge based upon the market rate don’t pay for the original investment). Ergo, the barriers to development entry are high and wide, therefore, only the “strong’ will survive. We all believe in our community, but there are very few that will actually invest in it, an unfortunate reality.
Michael Codron – I think it has to start with a cultural shift regarding the acceptability and desirability of very dense housing types. If driven by community and consumer preferences, we would have the opportunity to create local regulations that would support a market for more housing options. There are a wide range of dense housing types suitable for individuals and families, but today the preference that drives the market is still for large lot, single-family detached homes. With support for more density, we could create more housing that is also more affordable, and if located appropriately could be served by efficient and cost effective municipal services. This is no small task, and city planners across the County are engaged in efforts to educate the public and present a vision for a more sustainable future.
Kevin Hauber – We need to shift the emphasis and incentive for builders to build modest sized, efficient housing that meets the needs of the San Luis Obispo workforce. Current programs offer modest opportunities for low income buyers, and most housing gets built for higher income households. Very little occurs in the middle where the need is greatest. I have dozens of clients who would own a home and work in SLO if there was adequate access to inventory. I can make financing available for these folks. They just need homes.
What is the biggest misconception about local housing needs?
J.D. – There are really no misconceptions. Most business owners know there is a need for affordable housing to support economic development. Most agree that we need additional workforce housing. However—the housing being built is not necessarily affordable for the workforce. With the median household income being around $60,000, a family cannot afford any of the new housing being built, much of which starts in the mid-$500,000 range. What we need is a realistic definition of “workforce” housing and build to that scale.
C.F. – I don’t know about “misconception”, but we have attempted to balance work/housing, but not so successfully. We, at least in SLO city, consider ourselves “urban”, and I suppose, rightly so, but SLO is the major employment hub, so people live inexpensively elsewhere (that may be a relative term!) and commute. Realistically, we are still rural, without the benefits of a truly “urban” environment, transit, pedestrian oriented development, etc., but that doesn’t mean that we shouldn’t strive to be a better regional community. Oh, to the question, the misconception is that we can actually achieve any meaningful level of affordable housing.
M.C. – I don’t think that any of us are fully aware of how people’s needs and preferences may change in the near future. Factors such as the global economy, demographics (e.g. an aging population where young couples wait longer to have fewer children), climate change, generational differences, increasing variety in household types, and transportation changes will all impact local housing needs. The homes we are building today may not be best suited to the population and environment of tomorrow, and I believe we will need to be highly adaptable when faced with the realities of the future.
K.H. – Where do you start with this? One big misconception is that Cal Poly will ever take care of all student housing needs. The spillover into the community is tremendous and will continue to be as more students are admitted and enrollment grows. The City needs to target the areas nearest Cal Poly for higher density student housing to minimize the impact on the City overall. This will change existing neighborhoods. That is inevitable and necessary.
The other misconception I see often is that people move here and then want to slam the door shut behind them. We need a vibrant community that provides housing for the people who work and serve here. There is a serious shortage of workforce housing and it seems many folks don’t realize that or don’t care.
What is one thing that you believe could produce more housing?
J.D. – We all know the cost of entry in the city of San Luis Obispo is high. We have high permitting costs, infrastructure and development costs. I believe the City has heard this from developers and builders for a long time and are attempting to address the issue as best they are able. In some manner, we need to make it economically feasible for developers to create more housing options at affordable price points without compromising our community identity.
C.F. – There are many factors that contribute to producing more housing. The political will, the cost of land, the cost of doing business (e.g., City fees, the cost of construction, banking fees). I don’t really believe in “subsidized” housing, as I find that to be the last resort to home ownership. I’d prefer to help people get into the market (e.g., first time home buyer’s loans). From a planning/bureaucratic perspective, greater density with more amenities, government incentives (e.g., lower permit fees for increased density projects) – although our City has never been one to provide this for either business or housing.
M.C. – In the City of San Luis Obispo, a regional approach to funding new infrastructure would facilitate the production of more housing in the Margarita Area and in our other residential expansion areas. The City has over 3,000 units in total that are currently under construction or are actively moving through the entitlement process. It will take 15-20 years to construct all of this housing – or much longer if important infrastructure projects, such as the Prado Road Interchange, Prado Road connection to Broad Street, Tank Farm Road widening, and Buckley Road extension to South Higuera Street are delayed because of cost. These are infrastructure projects that have regional benefits – and require regional cooperation and participation – because they will enable more housing close to job centers, reducing vehicle miles traveled and the potential for even more congestion on Highway 101 and Highway 227.
K.H. – Employers, developers and the City need to partner to come up with solutions to the housing shortage. There are good signs of this starting to happen, but a great deal more is needed.