California’s affordable housing crisis has taken hold in Tracy, and on Tuesday the Tracy City Council spent two hours before its regular meeting talking about what city government can do to bridge the gap between housing costs and the wages that local workers bring home.
David Early of PlaceWorks Inc., a planning consultant out of Berkeley, told the council that cities have tools that they can write into their planning policies and municipal codes, but developers rarely use those strategies, instead building houses that are priced too high for most people who work in Tracy.
Early’s numbers illustrated his point: The median income for a family of four in Tracy is $90,823 in 2019. Low income is considered $72,658, and very local income is $45,412.
Based on those criteria, salaries for jobs in the public sector fall between low and very low income. A first-year teacher with Tracy Unified School District can expect to earn $52,942. A public safety dispatcher’s entry level salary is $64,581.
He listed some private-sector “head of household” jobs, based on information from recruiting websites, showing jobs at local companies that pay somewhere between $51,000 to $87,000, some lower, some higher.
Meanwhile, based on 30% of a family’s income going toward housing, it takes a salary of about $108,000 to afford the median rent in Tracy — $2,350 a month. Someone who wants to buy a median-priced house in Tracy, at about $485,000, would need to bring home more than $130,000 a year.
The result, Early said, is that 84 percent of Tracy’s workers commute to the west for higher-paying jobs, many of them going to Livermore, Pleasanton, San Jose or Oakland, while many others go to Stockton, Modesto and Sacramento.
Most of the people who have jobs in Tracy, about 78%, are also commuters. They come from less expensive communities to the east, including Stockton, Manteca and Modesto, to work in Tracy.
Potential solutions include allowing extra building permits for low-income housing under the city’s growth management ordinance or “density bonuses” that allow developers to build more units on their land as long as low-income renters and buyers can afford them.
These incentives have failed to convince developers to build the “missing middle” between single-family homes and large apartment buildings — such as duplexes, townhouses, bungalow courts, live-work units and courtyard apartments.
Tracy resident Lisa Roth said the city could find examples both in town and in high-end communities in the Bay Area.
“This missing middle is actually something that isn’t being done new in Tracy, and it’s just getting a resurgence because people are saying, this worked back in the day,” she told the council. “If we look at some of our older neighborhoods in Tracy, we do have some of these courtyard apartments and we do have the potential to bring these types of mixed-use developments back into our planning and community.”
Early said that cost subsidies are effective incentives for builders. He mentioned existing state programs and pending state legislation that could provide cities with more money to support development of low-cost homes.
“It might even be possible to put a local bond measure on the ballot,” he told the council. “Los Angeles County just successfully passed a bond measure. San Francisco, Berkeley have all passed bond measures to support creation of affordable housing. People pay on their property tax bill towards that bond and local government uses that to create additional affordable housing opportunities.”
Councilwoman Veronica Vargas said much of the cost to build any type of house comes from the government.
“The fee structure is key. I know now that before you put a stick in the ground, our permits are about $60,000 to $70,000 per house. So when you have unit density, maybe you can lower those fees to incentivize the unit count,” she said. “Of course, that hopefully means they can reduce the price of that unit when the fees are lower.”
Before builders get that far, they also have costs associated with state land use and environmental regulations.
“It’s about a million dollars that a developer needs to pay before a project can get approved,” Vargas said. “So if we’re really serious about that, then maybe we should do that homework ahead of time in order to be ready for the housing that we so desire.”
The council didn’t take any action, but the discussion will lead to an eventual rewrite of the city’s housing element, which is a component of the general plan. Early said he planned to meet with people in the community and developers to find out what is needed and what will work.
“We plan to come back in several months with actual recommendations and present that to you as a city council and ask for your guidance at that time,” he said.