As much as 25% of new housing in Ventura could be set aside for moderate-income families at prices kept far below market value, under a plan that is to be released by the City Council's affordable housing committee.
The three council members on the committee said they will recommend that the value of each low-cost home be tied to the Consumer Price Index for 15 years, so that a permanent stock of inexpensive housing remains available.
At today's values, families qualifying for the program would have household incomes no greater than about $38,500 and would be eligible for homes at prices in the $130,000 range. Those same homes might fetch as much as $200,000 on the open market.
However, by tying resale prices to inflation, the measure would keep those families from making anything but a modest profit. Since 1983, the state's Consumer Price Index has risen only 22.6%, whereas the cost of new homes in Ventura County has jumped by 67.6%.
The committee, which for eight months has been studying ways to curb the city's rocketing housing prices, will probably also recommend that applicants for the homes live in Ventura for at least one year, although council members concede they do not know what legal problems that might create.
"We're going to get very Draconian about this," said Councilman Don Villeneuve, adding that the committee will meet once more to polish its proposal. "Somewhere along the line we've got to interdict this constant cycle of inflation."
Called 'Pipe Dream'
Developers and some other councilmen, however, criticized the approach as a "pipe dream" that would only serve to deprive families of the escalating value of their homes.
"This is a really unfortunate trap," said Ron Polito, manager of Don L. Carlton Inc., a Ventura realtor and developer. "It's like a trick carrot. A buyer is just going to dig himself into a hole and never be able to grow."
Councilman John McWherter agreed, recalling that the city unsuccessfully imposed similar restrictions on a 105-unit development in East Ventura four years ago. The council was forced to rescind controls on the resale value of the homes when a throng of angry residents complained that they could not reap profits they thought they deserved.
"I wouldn't like to see us make the same mistake twice," McWherter said. "This just means there's going to be that many more people screaming. And you can't blame them. It's human nature."
The plan, which will be considered by the Planning Commission on June 28, was modeled after similar programs in 25 other California cities, where such controls have helped create a permanent stock of low-cost housing, said Dave Valeska, project manager for the city's community revitalization division.
Palo Alto Among First
In Palo Alto, for instance, which in the early 1970s became one of the first cities to undertake such measures, 10% of all new housing has been set aside for moderate-income families.
Today, about 140 units--restricted in their resale value by rises in inflation--sell for about one-third to one-half of current market prices there.
Similarly, in Santa Barbara, the city has been restricting the resale value of its affordable housing since 1983, resulting in about 400 units that sell for about half their market value.
"I think people just realize that if they wanted a non-controlled unit, they wouldn't be able to afford it," said Steven Faulstich, housing development supervisor for Santa Barbara. "They wouldn't be able to get the true market increases either way."
Although voluntary incentives to developers in Ventura have generated some low-cost housing, it is not uncommon for the units to be sold several years later at windfall profits, city officials said.
Members of the committee--who, besides Villeneuve, include council members John Sullard and Nan Drake--said preserving the units at below-market prices is their primary objective.
"We have to control it," Sullard said. "We don't want to become an ultra-rich community. We want to be a real community with a real cross section of people."
Under the new plan, any housing project with more than four units would be required to reserve one-fourth of those units for moderate-income families. In some cases, such as costly hillside projects, the developer could choose to pay the city $30,000 for each affordable home sold at full market value.
Based on Ventura growth regulations, that would probably generate 100 to 200 low-cost units a year, Valeska said.
To qualify for the units, a family could make no more than 10% above the county's median household income, which current estimates place just above $35,000 a year. Home prices for such a family would range from $105,000 to $130,000, Valeska said.
While existing low-cost projects mandate that the owner occupy the house for at least two years, the plan would require that the homes always be owner-occupied, he said.
Finally, the resale value of the homes would be restricted by 15-year deeds that would allow their prices to rise only as fast as inflation, although some upward adjustments would probably be allowed for major improvements on the units.
Resale procedures have not been fully worked out, but the city would probably buy the homes from families who wanted to leave and then offer the unit through a lottery or waiting list.