New Homes Coming To Newark, Developers Paying Millions In Fees Instead Of Building Affordable Units
NEWARK (KPIX 5) -- Empty lots will soon turn into Newark's first new housing in years. But most people will be priced out, and city leaders may prefer it that way.
Ground has been broken on land near Cedar Boulevard and Timber Street. More than 160 homes and townhomes will go on the site, and people are expected to move in sometime next year. Prices are expected to range from $550,000 to $750,000.
Karina Gonzales, her son, and husband live in a two bedroom one bath apartment they share with another family of four in Newark. That means one bathroom for seven people.
"Just living like that is not good. It stresses people," Gonzales said.
She dreams of her own home. "It doesn't have to be really big. Two rooms could be fine," Gonzales said.
Soon, she will have more options, but it may only be window shopping. For the first time in a decade, developers are eying Newark as a sound investment. The city is planning for a thousand new homes and a 25 percent population spike over the next five years.
"It injects energy into the housing market. It attracts attention to your area," said Newark Assistant City Manager Terrence Grindall.
But none of the homes planned are considered affordable. That's because all but two of the 15 developers have opted out of building affordable housing, and will instead pay a fee with the blessing and even encouragement of city hall. The city could end up with $10 million, which it prefers.
"We are aiming to through the collection of these fees and subsiding future development provide more housing for working people," Grindall said.
The city said it can better leverage those fees to get state and federal money for larger projects, instead of a handful of less expensive homes scattered across the city.
When aside how much affordable housing has been created, Grindall said, "Well, no one has actually paid the fee yet. They've only agreed to pay the fee. They pay it when the houses are completed."
Just recently the City Council changed that. Going forward, the fees will have to be paid up front. But exactly what is considered affordable? It's absurdly high. A low to moderate income family of four would be expected to spend between $2,000 and $2,800 a month. That's unimaginable to Karina who says affordable is something like $850 a month.
It may be years before affordable housing using those fees will be built.