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Petaluma business owners plea for more housing

Two Petaluma proprietors have formed a coalition and distributed a petition in a rallying cry to urge local elected officials to address a lack of affordable housing in the city, a trend they say is crunching small business and inflicting hardship on employees.

Husband-wife duo Angelo Sacerdote and Lina Hoshino, who founded the Petaluma Pie Company, have led the charge in creating the nascent Small Businesses for Affordable Housing in Petaluma group. At their downtown business, the Petaluma residents have seen their 13 employees priced out of the city or struggling to make ends meet in their current homes, which they say has an impact on their ability to do business, maintain affordable prices and retain a quality workforce.

“When you’re a small business, you kind of want everyone to be able to work nearby and when they move farther away, they’re at the whim of a car breaking down or their bus running on a holiday schedule, all those kinds of little things that you might not think about,” he said. “It’s a huge extra burden for them and increases your stress level and that’s why we’re advocating to find a solution.”

The couple isn’t alone in their plight: after knocking on the doors of other local businesses last month, they collected 100 signatures from owners and employees echoing their concerns. The group sent the petition to state and county officials and addressed the city council at its Feb. 4 goal setting meeting, imploring the panel to help identify and implement a solution as the housing crisis sweeps across Sonoma County and the greater Bay Area.

Among those impacted is Stephanie Reagan, who’s working three jobs to make ends meet while struggling to split the rent for her Petaluma home with her boyfriend. The 32-year-old works 12 hours most days, a schedule that cuts into her quality of life, but one she said she needs to maintain to stay living in her hometown near her jobs, family and friends.

“It’s pretty sad because it’s not all the local hometown people that have grown up here, it’s all people coming in from other cities renting these homes at top dollar that we can’t afford,” she said, adding that the pair doesn’t qualify for the city’s affordable housing complexes and it’s been “impossible” to find housing in their price range.

Though Sacerdote said he doesn’t think that the lack of affordable housing will signal the demise of the city’s small business community, he’s fearful of the long term impacts of the tight market on employees and business owners who may also be priced out.

The vacancy rate in Petaluma’s major apartment complexes hovered just below 2.5 percent as of October 2016, according to a biannual city survey. The average market rate rent for a one-bedroom apartment was $1,893 a month, spiking up to $2,675 for a three-bedroom home, according to the survey. Sacerdote said some of his employees make just enough money to boost them over the line of eligibility for affordable housing, leaving them with few options. For those who do qualify, wait lists often range from 12 months to two years, Housing Coordinator Sue Castellucci said.

Onita Pellegrini, executive director of the city’s chamber of commerce, said her organization has long advocated for the creation of workforce housing to cater to employees of businesses of all sizes. She said the lack of local housing poses a “quality of life” issue.

“We’ve got to sit down and look at it and not throw anything out until we decide it won’t work. Let everyone come to the table and talk about it,” she said.

Councilman Mike Healy said the council has identified affordable housing solutions as a priority for the upcoming year, with plans to explore options including increasing fees paid by builders of large residential developments as an alternative to including on-site affordable housing.

Those fees, along with fees from developers of large commercial projects, are funneled into the city’s coffers for affordable housing programs and to support various organizations in the city.

In past years, funds were used to help create more than 1,700 affordable housing units, according to data from the city. After the dissolution of its redevelopment agency in 2012, a major source of funding, the balance has slumped.

The affordable housing fund balance stands at about $3.6 million, though $1.7 million is being held aside pending a decision on if the state will take it as part of the dissolution process, Castellucci said. The city has in the past paid an average of $4 million to help build each brick and mortar affordable housing development, a contribution that would deplete the current funding, Castellucci said.

About $5.2 million in fees are projected to be funneled into the fund from major development projects in the pipeline for the next three to five years, according to Senior Planner Scott Duiven. A fee increase could boost that number, though it would not result in a significant enough windfall to create a sustainable solution, Mayor David Glass said.

Nearly 70 affordable units are also planned as part of approved or pending projects in the city, Deputy Planning Manager Kevin Colin said. As another measure to make a dent in the issue, Healy said the city can examine the definition and threshold for “affordable” housing requirements for those units to potentially make them more accessible to slightly higher earners.

“I think this is going to be an ongoing challenge and certainly the city council wants to chip away at it where we can,” he said. “It’s a very daunting challenge.”

Glass said the city will need to look to the state for sustainable sources of funding and condemned a recent move that cut funding earmarked for moderate and low cost housing from the governor’s preliminary budget.

“The solution has got to come out of the state,” he said.

He said rent control, another idea floated by the affordable housing advocacy group, would be costly to implement and likely result in freezing rents at inflated prices that still remain out of reach for workers.

“I don’t want to be overly pessimistic,” he said. “All these small things, yes we can do them, but they won’t really address the issue. The issues need to be addressed on a huge magnitude and not on the periphery.”