Driving development

On a recent afternoon at Meriam Park, bulldozers turned the earth as about a dozen workers labored over the foundations of what soon will become Bungalow Commons, a neighborhood of just over 40 single-family homes. Nearby completed apartments offered them shade. Just up the street, people stopped by Daycamp Coffee for a pick-me-up, and a woman rushed into Da Capo Style House.

As developer Dan Gonzales led the CN&R on a brief tour of the burgeoning community in east Chico, he expressed anticipation for what’s to come. Its first residents move into apartments next month, which also will mark the opening of a neighborhood restaurant.

“It’s really exciting it’s starting to take [shape],” he said. But it hasn’t come without challenges. Construction costs have been higher than he’d hoped—local laborers are in high demand, split between rebuilding the Ridge and working on typical housing projects.

“The supply of available subcontractors is a challenge,” Gonzales continued. “Everybody’s busy, and most companies have experienced some loss of employees.”

Those are just a few of the obstacles Gonzales has faced while attempting to provide much-needed housing amid the statewide shortage—a project that has taken on more urgency since the Camp Fire destroyed 14,000 dwellings overnight.

The further contraction in the housing supply is part of the reason the city of Chico is diving into the issue via an ad hoc Housing Committee, made up of Mayor Randall Stone and Councilmen Karl Ory and Scott Huber. The municipality started hosting meetings last month (the next is Sept. 24), inviting developers, nonprofits and others in the housing industry to talk about barriers and solutions.

During the second meeting in the series, on Tuesday (Sept. 10), Community Development Director of Planning and Housing Brendan Vieg set the stage by giving a rundown of projects in the works. The city isn’t just seeing activity in Meriam Park. In 2019, 198 single-family and 589 multifamily units already have been built and an additional 194 single-family and 547 multifamily units are under construction. This is a marked increase from last year, and the highest volume the city has seen since 2005, Vieg reported.

“You can see a response, how the market [has changed] due to our housing demand, in essence post-Camp Fire,” he said.

Following that, Gonzales provided an update on Meriam Park—located at Bruce Road and East 20th Street—during which he told attendees the city needed the kind of workforce housing he’s building before the fire and “now we need that even more.”

Gonzales told the CN&R his vision for Meriam Park hasn’t changed since the fire. The development still is being designed as a higher-density, walkable community with a variety of entry-level housing, for the workforce, as well as retirees looking to downsize.

However, the blaze certainly intensified the demand and labor shortage.

“I know we’re losing our workforce,” he said. “Any builder knows it … we’re all losing our people right now. If we don’t find a place for them to live, we’re really jeopardizing our future.”

Several developers encouraged the city to prioritize installing infrastructure, which would help get their projects off the ground faster.

But Tom DiGiovanni, a developer and the founder of New Urban Builders, said there’s “enough good urban fabric in this community” that developers can work on infill, and don’t necessarily have to rely on new infrastructure. They can build up instead of out to increase density and efficiency.

Development impact fees, which the city recently updated, also were briefly discussed. While the city established fees varying by the number of bedrooms, some attendees suggested a breakdown based on square footage, which could encourage the development of smaller units.

Inclusionary zoning, the most controversial topic of the meeting, which Ory referred to as the elephant in the room, came up toward the end of the two-hour meeting.

This isn’t the first time the city has considered adopting that type of policy. In fact, it’s included in the city’s housing element and general plan as a topic of consideration.

The city actually put out a bid for an inclusionary housing analysis in 2013, Vieg said, but it happened at a time when the City Council was in transition. Staff “pulled the plug” because it didn’t have time to work on a project that wouldn’t have succeeded, he said.

Most developers expressed hesitation or concerns or were outright against policies that would require them to offer a percentage of housing units at prices affordable to low-income households.

Kate Leyden, of the Chico Builders Association, argued that the solution to the affordable housing shortage is to increase the existing housing stock. She argued that mandating affordable units would force builders to pass on costs to other homeowners.

“That’s where it just doesn’t seem fair,” she said.

Stone replied that isn’t necessarily the case, because inclusionary zoning policies can include subsidies. Leydon said she’d need to have more specifics on where such a subsidy could come from. Vieg said the city could implement such things as flexible building standards and density bonuses, and Stone mentioned state funding.

Later, Stone told the CN&R that all income groups are having trouble finding housing, and many have had no choice but to leave the area. It’s the city’s responsibility to look out for all of its residents—not just the ones that can afford large single-family homes.

“I know inclusionary zoning is a viable tool. I want staff to research that and review its possible implementation for Chico given our economic constraints,” he said. “If we don’t get this housing thing right, we’re talking about economic devastation that’s remarkable.”