Affordable housing in Sacramento’s urban core

Jeff vonKaenel

Do we need to build more affordable housing in the central city? SN&R co-editor Nick Miller thinks so. He wrote a solid, well-reasoned Editor’s Note on August 14, pointing out that it currently costs $1,100 for a one-bedroom apartment with laundry facilities on the grid.

He asked, “Is that affordable? … How many baristas, single moms, painters, deejays, bartenders, hairstylists, servers, designers, underemployed dads, writers, retail workers, recovering addicts or bicycle technicians bring in that kind of money?”

Because he hopes that we will increase the population of our downtown by 10,000 over the next decade, Nick argues that we need to create more affordable downtown housing. This made sense to me.

But now I am not so sure, after receiving a call from my friend Sotiris Kolokotronis.

A developer of both affordable and what he calls “executive housing,” such as The Fremont Building and L Street Lofts, Sotiris wanted to get together to discuss downtown housing. I always enjoy talking with Sotiris, so I agreed. Here’s his perspective.

In the downtown area—the area between the freeways and the rivers—he says the housing stock is roughly 90 percent rentals and 10 percent owner-occupied. This is in sharp contrast to the rest of the region, which is roughly 67 percent owner-occupied and 33 percent rentals. According to Sotiris, downtown already has more than its share of affordable housing. He thinks we need more “executive housing” in the downtown core.

Such an increase in owner-occupied units and rentals with more amenities would bring wealthier people downtown. And it would create a more balanced, diverse neighborhood, with the well-off and those living paycheck to paycheck right next door to each other. We don’t want all of the big spenders in Granite Bay. We need their wallets downtown.

Sotiris says the big problem we face is the cost of building housing downtown. Downtown housing, by definition, needs to be higher density. We cannot build a suburban housing tract in Midtown. Instead, we need to go up, building multistory dwellings. According to Sotiris, multistory buildings with structural or underground parking cost twice as much to build as a two-story apartment with surface parking. This means that the rent or lease payments would also need to be roughly twice as much.

Subsidized housing downtown, where the rent is twice as much, could cost the taxpayers four times as much money. That means that only one-quarter as many people could be subsidized. So, if we’re going to build low-income, subsidized housing, does it make sense to build it downtown?

If we only have so many dollars to subsidize low-income housing, shouldn’t we spend that money where we get the most bang for our buck?

That is why Sotiris believes subsidized housing should be somewhere other than the downtown high-density core. I would rather have 4,000 people have affordable housing in the neighborhoods around downtown than subsidize only 1,000 people downtown.

What do you think?

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About the Author

Jeff vonKaenel
Jeff vonKaenel is the president, CEO and majority owner of the News & Review newspapers in Sacramento, Chico and Reno.