Arcata has fallen short of building enough housing for higher-income residents, according to the state's Regional Housing Needs Allocation, which sets housing production targets for cities every eight years.
David Loya, the city's community development director, said Arcata has generally met its housing goals but has consistently lagged in the above-moderate income category.
While the city has made significant progress meeting state housing targets for lower-income residents, officials say the shortage of market-rate housing has become an economic development challenge. They say the lack of homes makes it harder to recruit and retain physicians, university faculty and other professionals, even as Arcata works to encourage new development.
According to Arcata's annual element progress report covering 2019 through 2027, the city has met its housing allocation for almost all levels, except for one low-income unit and 116 above-moderate income units
Loya said several factors make higher-income housing difficult to build.
"Housing in general in California is just really hard to make pencil," he said.
He said grants have helped finance affordable housing developments, but similar funding is not available for market-rate projects.
"There are no grants programs for above moderate-income housing," Loya said. "It's just left to the market."
Limited land is another challenge. Arcata is bordered by forests, pastureland and Humboldt Bay.
"You would think, 'Well, you can just annex and start building new housing tracts out there if you wanted to,'" he said. "We certainly could, but that kind of runs against the grain of our environmental values."
Construction costs also remain a significant obstacle, even for housing that would sell at a higher price point.
"The cost of materials, the cost of labor, the cost of land doesn't jibe with the income rates of the folks that live in our area, so it's just a really hard sector to build for," he said.
Loya said state building codes also add to development costs.
"[A] perfect example of that is all new housing now needs to have solar panels installed at the initial build," he said. "Which is a great idea for energy resiliency, but it does make the cost of the housing more expensive."
Much of the city's single-family housing has been converted into rental housing for students attending Cal Poly Humboldt, Loya said, going back to the 1980s and 1990s.
"We're trying to reverse basically decades and decades of policy that led to the challenge that we're experiencing now," he said.
The shortage of higher-income housing affects more than homebuyers, Loya said. Employers struggle to recruit professionals, including physicians and university faculty.
"Obtaining any kind of medical services is really a challenge. In part, that challenge is exacerbated because we can't attract and retain physicians," he said. "Not having higher-income housing is a detriment to our residents because of those follow-on impacts."
Loya said the city has tried to give developers more flexibility to incentivize building.
"We've tried to eliminate requirements that could be costly to developers," he said. "We've eliminated any kind of parking requirements in the city of Arcata."
Now, Loya said, the city will work to market itself to developers.
"The onus is on us to find ways to produce that kind of housing and to make more options available," he said.
