Council should pass fee on new housingAs Google brings more and more jobs to Mountain View, it is no surprise that rents for office and residential space are going up.
And for those who will be lucky enough to land one of the well-paid jobs at Google, a rent increase is not the end of the world. But anyone hoping to rent a home in Mountain View can expect it will cost more this year than last year, although developers are rushing to meet the need. And the City Council has been very open to approving many more housing complexes, and will soon have the opportunity to add another 1,250 units that are in the pipeline now.
A similar phenomenon is taking place in the commercial rental market, with the vacancies at near record lows downtown, prompting developers to put many more projects on the drawing board.
Meanwhile, in attempting to ride herd on this mini-boom, the City Council is searching for a way to sponsor more affordable housing projects so that workers who have not been lucky enough to land big jobs at Google or other tech companies can find a place to live. A major source of cash for the city's below-market-rate (BMR) housing fund was a 10 percent fee on rental housing development, but it was recently eliminated by a Los Angeles court case.
Then last week an effort by Mayor Mike Kasperzak, supported by council members Laura Macias and Ronit Bryant, to pass a new, 3 percent in lieu BMR fee on such development, ran into a roadblock in the person of council member Margaret Abe-Koga. (Jac Siegel was also opposed.) The councilwoman said she is hesitant to bring back a rental housing fee due to a concern that it is more jobs, not housing developers, that is putting increased pressure on the rental market. In addition, she said the city could generate $9 million from a housing impact fee assessed on commercial developments, such as office projects.
The underlying message from Abe-Koga seemed to be, "Why add a fee to rental housing projects when the city receives millions of dollars from construction of new commercial buildings?"
This certainly is a challenging question, but we urge Abe-Koga to rethink her position. Here's why:
• Until last year, the city charged residential developers a 10 percent in-lieu for BMR units. Three percent would be a bargain in the eyes of most developers.
• The $9 million the city expects to collect from office development projects is appropriate, but that doesn't mean residential developers should get a free ride. In our view, a fee on one type of development should not preclude a fee on the other.
• A survey of neighboring cities, as shown in the city staff report, clearly shows that a 3 percent fee would be significantly less than what most others charge.
Mountain View has a history of approving more multi-family housing projects than any of its neighbors. In a rising market flush with the promise of more good jobs coming, the city must recover a reasonable fee from these projects. We doubt that rents in any project are set by the amount of BMR fees assessed by the city. In Mountain View, as elsewhere, rents are set by market forces.
Two more votes are needed to pass the BMR in-lieu fee for new rental housing. It would be shameful if two more votes could not be found to pass the modest, 3 percent assessment, which will bring $12 million to the city's BMR housing fund.