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Teachers, baristas, state workers: Sacramento’s push to build middle-income housing

Leslie Lucas was paying nearly $1,300 a month for a small studio apartment in midtown Sacramento. The unit “wasn’t in the best condition,” she said, but other studios in the area were far more expensive.

Then someone broke into her apartment. She was ready to move.

But like thousands of other young professionals in the region, Lucas, 24, earned too much to qualify for affordable housing and not enough to comfortably pay the rent in a traditional market rate apartment complex. She eventually landed at the Kind, a new development in West Sacramento where studios run for about $1,300 a month in a modern new building.

“When I found it, the first thought I had was, is this too good to be true?” Lucas said. “It’s very hard to find affordable housing.”

Lucas is part of what’s often referred to as the “missing middle.” Those are people earning between $60,000 and $80,000 — state workers, teachers, entry level public safety officers. An analysis by the Sacramento Area Council of Governments released in 2020 determined that nearly 27,000 units of housing should be built in the Sacramento region to accommodate moderate-income earners, including more than 8,500 in the city of Sacramento alone.

While Sacramento has made significant progress in recent years in supporting the construction of housing affordable to low-income earners, it hasn’t been until recently that public agencies and developers have placed their attention on middle-income housing. Much of that focus has been on the region’s urban core, where planners and developers are trying to build housing near where people work and play.

“It’s really important to bring all price points and housing options to our community, and particularly downtown to support our workforce that’s in our city’s core,” said Danielle Foster, the executive director of the Capitol Area Development Authority. “These are price points that can be overlooked.”

CADA has launched a new program in which it provides a small loan to a development company pitching an income-restricted project. If a nonprofit organization, such as one that provides services to residents, is brought on board, the developer does not need to pay property taxes on units affordable to tenants earning 80% of the median income, or roughly $60,000 for an individual.

The Kind Downtown, developed by Urban Elements, was constructed under the new model. Most of the 72 units in the building at Eighth and S streets in downtown Sacramento are available to middle- and low-income earners. CADA provided a $100,000 loan to the developers, who partnered with the nonprofit housing organization Pacific Housing, Foster said.

Julie Young, president of Urban Elements, said it’s vital that Sacramento provide more housing options for middle-income earners — and that people in that income range realize there is a growing market of housing options priced between subsidized affordable housing and expensive market rate housing.

“To be able to have housing, to be able to put food on the table, take care of your family, pay off student loans, those are realistic objectives,” Young said. “Housing is such a huge component of our personal security. When you sit there and basically make it such a struggle for people to have their basic needs met, you start to create unhealthy competition for resources.”

CADA and other developers want to expand their program.

Developer John Vignocchi and Urban Capital are working on three projects in the central city with roughly 200 combined units that will be available to residents making between 80% and 120% of the area median income. Foster said she expects loans to be made available to other projects in the urban core.

“There’s an appetite to do this more because we can produce a lot of units quickly,” Foster said. “We can do more with less funding per unit.”

There is growing acknowledgment that middle-income earners are in need of more housing options, but that their struggle to find affordable housing is not enough of a focus in local and statewide housing policies.

A study released in early February by the California Community Builders found that 60% of middle-income earners in the state are people of color. It also found that most housing assistance is provided to those who are considered “low income,” meaning they earn less than 80% of their region’s area median income.

“Low-income Californians are in desperate trouble in our housing market and absolutely need more support than they now get,” California Community Builders CEO Adam Briones said in the report’s release. “But moderate- and middle-income Californians struggle, too, and get less attention and help.

“Together, low- and middle-income Californians represent over 30 million people — more than the population of all but three states. Instead of seeing housing policy as a zero-sum game that pits these groups against each other, we need a unified coalition to make housing — and the benefits of homeownership — available and affordable to all.”

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