Builders Group Worries Higher Sacramento Affordable Housing Fee Could Stop Development

SACRAMENTO (CBS 13) -- The North State Building Industry Association is warning the Sacramento City Council if subsidy housing fees go up, their building could possibly stop.

"Every dime counts, every nickle counts. These projects are extremely expensive to put together," said spokesman Michael Stretch.

Tuesday night the city council will consider a $2.58 fee per square foot on new construction for developers, to help subsidize low-income housing projects in Sacramento. Developers consider the fee fair but nothing higher than that.

According to low-income housing advocates the subsidy number is not even close to meeting the needs of families looking for affordable housing.

Darryl Ruthford, Executive Director of the Sacramento Housing Alliance said, the city needs to build more than 84,000 affordable homes between now and 2021. To meet that goal Ruthford asks the city to triple the subsidy number.

"What you need is between $9 to $13 per square foot in order to fill that gap while developers try to build these affordable homes," said Stretch.

Developers say that number could potentially put some Sacramento construction crews out of work.

"By simply moving that number up what ultimately will end up happening is if that projects simply won't paper. If they don't paper they won't be built," Stretch said.

The Sacramento City Council is expected to discuss both subsidy proposals Tuesday.

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