Who is the middle class?

This is the article I discussed at Monday’s study session on housing impact fees. As stated in the article, “middle class” has been defined as 67-200% of the area median income. The income range for “middle class” in Santa Rosa is $41,000 to $125,000 a year. Applying the “30% rule,” which is the threshold for being cost-burdened by housing, that comes out to a maximum of $1,000 to $3,100 per month for rent or a mortgage payment. There’s a fallacy making its rounds that ANY new housing is good housing, but that is not what the numbers are showing.

A housing impact fee is a fee calculated based on the burden on the housing market caused by each new development. For commercial developments, it includes the burden on our housing stock to house employees. For residential developments, it is based on the services needed by the people who will live in that house. Housing impact fees aren’t penalities on developers, its an acknowledgment that everything has a cost, and it is a decision to share part of that cost with the developers who will profit from their projects.

Sonoma is quickly losing its middle class, and we aren’t doing much to stop it. If my colleagues are interested in ensuring there are housing opportunities for the people who fall into this income bracket—a wide range of people who are essential to a vibrant and balanced city—then we have to make it a priority. The truth is, anything we build that exceeds the $1,000 to $3,100 a month range is only making our housing problem worse. Developers love to preach the gospel of the middle class, but rarely do they actually build something that is realistically available to this income level.

Step one is to implement reasonable housing impact fees.

Step two is to adjust these fees to incentivize the development of the type of housing that is actually needed.

Step three is to find additional sources of housing funds (like the proposed increase in our hotel tax) and develop a strategy of how to leverage it to make the biggest positive impact on retaining and restoring a balance of income levels in our city.

This strategy should have three parallel paths: income-restricted housing for those in the low and very low income ranges; market rate rental housing, which we are sorely lacking; and a pathway to home ownership for all of my fellow millennials and younger generations out there who currently feel like the only way they will own a patch of dirt of their own is to leave this city we all love so much.

Link to article: https://www.northbaybusinessjournal.com/home/8105630-181/middle-class-sonoma-solano-marin-napa-mendocino-lake

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