Placer County recently relaunched its Workforce Housing Preservation Program to assist teachers, service workers and other members of the local workforce to purchase homes and stay rooted in the North Lake Tahoe community.
The county program provides workers up to $150,000 towards the purchase of a home, which would then be deed restricted for 55 years to ensure that only qualified local workers can reside in it.
Kudos to Placer County for its bold and innovative approach in addressing one of the most critical issues facing California – affordable housing for local workforces.
According to the California Budget & Police Center, “The lack of affordable housing increases economic insecurity among California families and also creates challenges for California employers striving to retain and recruit workers. Housing affordability is a problem throughout the state when housing costs are compared to incomes, and the Californians who are most affected by the housing affordability crisis are renters and households with the lowest incomes.”
It is a problem that I have witnessed first-hand. My company, LRE & Companies, often works within smaller municipalities as a real estate investor and developer. We identify a need within a community and manage the development process with input from local governments, businesses and citizens. One of our most recent projects was “University Square,” a 10-acre mixed-use development project in the Placer County city of Rocklin.
We like to think that our projects can benefit and be enjoyed by people from different socioeconomic backgrounds, but that is not always the case. Judging from what I have seen from our worksites, many of the workers who help construct our projects often do not own houses in the community, or they might be commuting long distances from other counties.
They are often priced out of the community that they are helping to build. Another issue is attracting a workforce once the projects are complete. Ideally, these jobs would go to local residents—but if the workers cannot afford to live there, this isn’t always possible. Meaning more commuters, which also impacts our environment.
The California Department of Housing and Community Development lists the following reasons for the state’s housing crisis: not enough housing being built; increased inequality and lack of opportunities; too much of people’s incomes going toward rent; fewer people being homeowners; disproportionate number of Californians experiencing homelessness; many people facing multiple barriers – beyond just coast – in trying to find an affordable place to live. The Placer County program tackles the issue head on. The county gives eligible homebuyers up to 16% of a home’s purchase price, or up to $150,000, that can be applied toward a down payment or home improvement. The deed restriction of 55 years auto-renews each time the house is sold, and homes can only be sold to qualified local workers. The goal is to create a secondary market of local worker housing.
The program does not have income caps for applicants and can reduce mortgage payments for North Lake Tahoe employees by hundreds of dollars per month, according to the county. Perhaps the most important aspect of the program is that the funds disbursed by the county to homebuyers do not have to be paid back.
Placer County is not providing charity. It is investing in its communities, preserving the middle class and making sure its resident families will grow, thrive and contribute to the growth of their county.
We need more of these types of programs up and down the state. All of California must prioritize affordable workforce housing.
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Akki Patel is founder and CEO of LRE & Companies. LRE is comprised of number affiliated entities that has been operating for 21 years in Northern California. The holdings of LRE & Cos are comprised of hotels, franchise restaurants, franchisor for national brand and commercial real estate portfolio.