Just how serious is Manteca about creating affordable housing?

In two words: Not very.

Yes, they talk a good game. Yes, they have lofty goals printed on city documents that are worth no more than the paper they are printed on.

That said the mayor and the council get brownie points for caring.

And if they do manage to get somewhat more affordable at-market homes built as part of new subdivisions by implementing requirements many other cities have already made years ago, it still will have done little to make even a dent in the problem.

It’s because whether you are building a new home or apartment units you can’t avoid the two biggest costs outside the actual construction of the dwelling — the land and growth impact fees.

The ironic thing is that Mayor Ben Cantu has the answer. He’s designed a successful garage conversion in Tracy.

There were 1,267 garage conversions in California in 2017. That number jumped to 14,702 in 2019 thanks to mandated rule changes implemented by the state. In 2020, additional rule changes reduced the cost even further. Cities can no longer collect fees on accessory dwelling units or garage conversions under 750 square feet. They also can no longer require the replacing of parking space lost when garages are converted.

Instead of just mimicking the state by putting rules in place for garage conversions as auxiliary dwelling units, Manteca needs to step up its game.

To do so they need to not just devise and implement a pilot program but they need to actively recruit homeowners to make it work.

Here’s one way that can work:

*First restrict pilot program conversion garages to under 500 square feet. Two-car garages are typically 24 by 24 feet today but back in the late 1950s, 1960s, 1970s and early 1980s there were many built that were 20 by 20 feet. Why 500 square feet is important is state law does not allow schools to collect growth fees at that threshold or below. A 24 by 24 conversion in Manteca would have a $8,640 bill to settle with Manteca Unified as opposed to zilch for a 20 by 20 conversion.

*By not being allowed to collect growth impact fees that shaves easily another $15,000 plus off the cost.

*The City needs to allow sewer and water for the conversion to use the existing connection. That wipes out $8,100 in connection fees but still leaves $5,400 to pay for increased capacity demand.

This should allow you to easily do what work is needed for a top notch conversion to come in at $80,000 or less.

To address two problems with one stone, look for homeowners that have more than 60 percent equity in their home or own it outright who may be facing fixed income issues age. The reason for this is simple. It will assure they can continue to afford to live in their home with additional income a rental will allow.

The city should set aside $100,000 — or $10,000 per pilot conversion — to cover a 10 percent down payment and city permit fees on an $80,000 project.

This would be a forgivable loan if for 10 years either dwelling — the garage conversion or the original house — is rented for 70 percent or less of the median rent of studio apartment units constructed since 1980 in the city. That now includes units at Westwood Village on Center Street and more than 40 studio units being built currently as part of the Valencia Place complex east of Bass Pro Shops.

This allows the owner two options. They could continue living in the original house portion or move into the smaller conversion and then rent the house for more money than they could get for the conversion.

In the case of studios, the Westwood units are renting now for $1,125 a month. The 75 percent cap would put it at $845. If the house the conversion is part of is 1,400 square feet it currently could rent for at least $1,800 a month. The 75 percent cap translates into $1,350 a month.

The $72,000 loan to the homeowner is based on a 4 percent fixed rate over 30 years. That allows a margin of error for fluctuating loan rates given that is over a third higher than today’s rates. When you toss in mortgage insurance, homeowners insurance, and property taxes the overall ongoing cost comes to $479 a month at 4 percent.

Renting it for $845 allows the owner to pocket $376 a month. If they opt to rent out their house instead and downsize and live in the conversion that is a positive cash flow of $871 a month.

Those are two solid options for someone struggling — or who eventually could be due to retirement financial issues — to stay in their home. That way, two households secure housing from one new dwelling unit.

The program could have an out to allow the homeowner out of the 10 year forgiveness loan early. If it happens before 5 years they could be required to pay back the loan and permit fees with interests. After five years, it could be prorated with reductions of 20 percent annually starting with the sixth year.

Without having to worry about the impact fees and with a project cap of $80,000 the city could likely require that the exterior design blend in seamlessly with the house as well as landscaping touches be done to make the conversion for all practical purposes unnoticeable.

As Cantu can vouch for, interiors of garage conversion designs today are impressive and striking. You can get a great room — living area, dining area, and kitchen — in less than 500 square feet along with a small bedroom and bathroom.

Someone working full-time for $15 an hour at $845 a month would be paying a third of their income in rent.

Given many garage conversions often are rented to young couples — those that are most likely to be working $15 an hour jobs given minimum wage in California will reach that threshold on Jan 1, 2023 — the $845 rent becomes even more affordable.

There is no way that any new apartment or house will carry a $845 rental payment such a garage conversion would or even $1,350 a month as an owner moving into the conversion and renting the original house.

That makes more housing that is truly affordable to people working here and not commuting to higher paying job markets.

The city could sustain the program going forward given most two car garages of less than 500 square feet are in areas that qualify for federal Community Development Block Grant funds.

And if the garage conversion is attractive for people owning somewhat newer homes with larger garages, the new state law that went into effect this year still bars growth impact fees from being collected.

The city could still offer a forgivable loan for the 10 percent down payment on a project as well as city planning fees. The fact school fees would have to be paid kicks up the cost to the homeowner but the caps on renting could still apply as the larger space can accommodate two bedrooms, living area and a bathroom especially when you hit 600 square feet or more.

Aggressively promoting and partnering in garage conversion is the most cost effective approach Manteca can take while helping two households at a time secure more affordable housing.

Take the land, growth impact fees, connection fees, and subdivision improvements — streets, parks, etc. out of the equation — and housing affordability improves enough to make a more noticeable difference.

It is time for Manteca to not only get serious about affordable housing but actually do something that is innovative and helps those struggling to with typical wages in Manteca and those struggling to retain a lifestyle. In other words help those who are young and housing poor but with the ability to increase their incomes and those who are older and housing rich but are facing financial crunches.

Of course, we could just study the problem to death, do what other cities are doing with extremely limited success, or serenade the public with empty platitudes.

This column is the opinion of editor, Dennis Wyatt, and does not necessarily represent the opinions of The Bulletin or 209 Multimedia. He can be reached at dwyatt@mantecabulletin.com