Someone making $19.25 an hour along with $450 a month in expenses such as auto payment and credit card bills would have a rough time renting an apartment in Manteca let alone buying a home.
Such a person would be able to afford a $900 a month housing payment that covers principal, interest, taxes, mortgage insurance plus hazard insurance. At a rate of 4.2 percent that translates into a loan of $125,762.
You can’t even buy a tear down in Manteca for that amount of money.
But what if the city approached affordable housing from an entirely different angle? All it would take is working with developers, converting some city-owned land along the future extension of Milo Candini Drive into residential, and tapping perhaps $3 million of the remaining redevelopment agency funds that the city can legally do given affordable housing was one of the uses of the money that the city listed that bond proceeds would be spent on.
The model to use is the IKEA small house plan with two bedrooms, a bathroom/laundry, kitchen/dining, and living/media areas all in 621 square feet. The IKEA floorplan shows you — thanks to showrooms with furnished floorplans — just how effective and functional a smaller home can be.
The city could allow one 621 square-foot- home on a 1,500-square-foot lot with an attached carport.
The neighborhood streets would be narrow two lane affairs with periodic off street parking stalls similar to a mobile home park except they could be city controlled streets.
Assuming city fees, infrastructure and land comes come to $65,000 that would leave $60,000 to build the actual home.  A search of the Internet shows modular home builders and/or traditional mobile home builders can build and sell a 789-square-foot home for under $30,000. It is more than plausible a smaller version built-in place with a foundation can be built for $60,000 or less.
The city would not own, build, or sell such homes. Instead they would enlist private builders. The $3 million would be used to build the infrastructure and serve as the construction loans for 20 homes at a time. When the homes are sold and mortgages secured, the city would be paid for the land it committed and the infrastructure. The process would then be repeated.
There are of course manufactured home options that would work financially but they wouldn’t create the tradional feel of homes. A neighborhood of small homes built as permanent housing with small yards would fit seamless into the Manteca community.
A successful city-private sector project employing new standards— narrower streets, smaller lots, and smaller homes — would clear the way for other efforts that could be 100 percent private.
The idea of a neighborhood of smaller homes may make some people cringe. However, it is extremely clear that single family homes in Manteca for less than $250,000 will go the way of the dodo bird. As for building affordable apartments, they are dicey for the private sector due to upfront costs, the length of time it takes to go from conception to completion, and the great reluctance of lenders to finance their construction.
There is a danger, of course, that small neighborhood homes could rapidly appreciate faster than other housing types in Manteca’s perennially tight housing market.
That wouldn’t necessarily be a bad thing as is would demonstrate to construction lenders and private sector builders alike there is money to be made in smaller homes. And while it could raise initial asking prices for new “small home” construction it would at the same time provide a less expensive housing option that ultimately means more people could afford housing.
That is the goal — affordable housing for more people that is not only durable but also strengthens the housing stock and mix of the community.
This may not be the answer. It goes without saying, though, that what the City of Manteca and other valley cities have been doing for the past 30 plus years to encourage affordable housing has been an exercise in futility. Cities can’t legally reduce various building and growth fees nor should they. Subsidizing housing has limited impact plus requires shifting limited government resources from other needs.
If the little home strategy takes hold, the city could take it a step further and use it as a template to jump start legally allowed “granny flats” on existing lots with traditional single family homes that have gotten hardly any takers since city rules were changed to accommodate them almost 20 years ago.
The city could tap into the $3 million to allow construction loans to homeowners with adequately sized lots. Since the homeowners already own the land and the infrastructure needs consist of connecting to existing power, water, and sewer lines it would bring down the development costs.
The homeowner then would be able to rent the smaller home at $1,200 based on the current market versus the $1,000 mortgage that the buyer of such a home would have. Assuming the overall loan would require a payment of at least $50 less a month while covering construction costs, growth fees, and connection fees the homeowner would have at least a positive $250 a month cash flow.
Thinking out of the box when it comes to affordable housing is a must since not much else is working.