With no other options seemingly before them, Clovis City councilmembers approved a plan to add more affordable housing, one that builders say will have the opposite effect and reduce housing in the city.

After a 2019 lawsuit, the city agreed at their Monday meeting to implement the Mixed-Income Zoning Ordinance, requiring that new home builders take measures to increase affordable housing.

The lawsuit came after the city failed to meet its state housing requirements.

That means for builders either building homes priced for low-income families, buying rental homes and converting them, rehabbing distressed units, or the likely scenario, paying an additional fee to build.

Attorney Patience Milrod, who helped in the lawsuit against the city, told GV Wire in a statement that the plan will bring more diverse housing options to the city.

“Clovis City Council is to be congratulated on accelerating the city’s forward movement into a stronger housing market that serves all its residents,” Milrod said.

Clovis resident and former Building Industry Association president Mike Prandini, however, said at the meeting that the plan puts the burden of building affordable housing on the shoulders of homebuyers who would likely pay those additional fees. Prandini threw out a $3,500 figure added to the cost of a home.

“It’s not that homeowner’s responsibility to solve the low-income housing problem,” Prandini said.

(Disclosure: Darius Assemi, publisher of GV Wire, is the president and CEO of Granville Homes, which builds in Clovis.)

1,800-Square-Foot Clovis Home Could Cost $5,000 More

The plan applies to any builder constructing at least 11 homes. After that 10th home, the plan triggers, requiring any one of five options with the remedies scaling with the number of homes built.

While developers can build a house priced for a buyer earning 80% of the area median income, Claudia Cazares, affordable housing programs manager for Clovis, said it wasn’t likely a developer would build a $600,000 home and sell it for $200,000.

More likely, builders will opt to buy or rehab units or pay a $2.80 per square foot fee that goes into Clovis’ affordable housing trust, she said. Over the next year, the city will also consider an administrative fee to go on top of that fee if the city can’t fund the staff time needed to implement the program, said Chad McCollum, economic development director with the city.

Money from the housing trust will go to affordable housing projects, such as a new senior living facility at 135 Osmun Dr. the city has paid for as part of the settlement agreement.

For an 1,800-square-foot home, that’s an additional $5,040, according to city analysis.

Developer Brandon DeYoung, executive vice president of DeYoung Homes, said some homebuilders may look elsewhere.

“Not only would it add cost to the home, but it might discourage buyers from buying more land and building more homes in the city,” DeYoung said.

Property Value Appreciation Does Not Get Transferred: Assemi

Building affordable homes has its own complications. With the 80% area median income cap, that means building a home to sell for $310,000 for a couple earning $60,100, with a 5% down payment, according to previous GV Wire research.

Developers can build slightly smaller homes to accommodate the price drop, but they shouldn’t be very apparent, Cazares said. The city may be able to bridge the gap with down payment assistance programs, she added.

“We don’t want the subdivision to look odd and somebody to call out that one low-income unit as the poorer family that lives in the neighborhood,” Cazares said.

The homes also must remain affordable for 45 years, meaning the price is capped when they are sold.

Assemi said while the program makes housing available to lower-income families, they do not benefit from the wealth generated by homeownership.

“The challenge with this program is that it does not allow property value appreciation to get transferred over to the owner of the home,” Assemi said.

Self-Perpetuating Cycle?

The question of the program’s lifespan arose among councilmembers. Mayor Vong Mouanoutoua said since the lawsuit was against a specific housing plan supposed to cover a set time period, MIZO should expire in 2031 when the city has to come up with a new report and plan for the state.

City attorney Scott Cross did not have an immediate answer for him, but Councilmember Lynne Ashbeck said in a “worst-case scenario” the housing cost increases due to MIZO could result in the city failing a future housing plan with the state.

“How will we be judged then?” Ashbeck said. “That unknown to me is scary because this is not going to do what they hope it does.”