Housing: 2021 and beyond

BROAD ACRES is widely considered a Tracy housing success story. Two of the four lots have been sold, and there will be a pair of open house events there this weekend. Photo / Per Peterson

When it comes to housing in Tracy, there have been success stories and stories some would just as soon move on from. But right now, all eyes are turned to the future of housing in the city, not the past.

Tracy City Administrator Erik Hansen and EDA Director Jeff Carpenter addressed the Tracy City Council at a recent work study session about the current state of housing in town and what the City needs to do to improve it. One of the takeaways from the meeting was a firm goal of what needs to be accomplished in the city to address the housing issue in the next decade and beyond.

“What we’re proposing is that if we can build an average of about one (new) home to three a year and build 30 homes over the next 10 years, that would add about 100 people to the city,” Hansen said. “I know that seems modest, but when you’re going from zero to one, a three-fold increase over that is a pretty good number. Thirty new homes over the next 10 years is probably more homes than we’ve built over the last 20 to 30 years.”

This plan, Hansen said, would help with the marketing of the city, as it would create an image of Tracy as an affordable place to own a home with a high quality of life and would create a supply of options for people who are thinking about moving

to Tracy — two issues, he said, that need to be addressed.

And, Carpenter added, “We don’t want to lose any houses in town that people are living in now.”


According to Hansen and Carpenter, three twin homes and one single-family home have been permitted in the last five years. There are currently 29 active listings in Tracy, with an average list price of $96,700, at $55 per square foot, and there is an average of 103 days on the market.

One reason new homes are hard to come by, Hansen said is construction costs, which have increased over the years. An average new home construction is anywhere, he said, from $80-$120 per square foot, or about $175,000 for the same size home. Citing data from Zillow, only two homes in Tracy have sold for more than $175,000 in recent years.

“We’re not fully permitting any new structures in the city,” Hansen said. “That’s something we want to change. Our current housing stock is old; if you’re not building new units, that’s what you’re gonna get.”

Other factors that weigh into why new homes aren’t being built in town are a low median household income in Tracy ($45,000), and Tracy’s decline in population — from a Census of 3,400 in 1940 to about 2,100 today. Hansen said population loss like that in Tracy and in surrounding rural areas has reduced the demand for housing.

To combat these issues, Tracy has done a number of things in terms of housing, with varying degrees of success.

Hansen and Carpenter said Orchard Lane has cost the City at least $600,000 over the last 10 years and continues to cost the City some $40,000 per year.  Hansen said the City has floated about $1.2 million in debt for Orchard Lane, and “10 years later we’ve only paid off $200,000 in principle of that debt,” he said. “It’s a very long-term loan. We’re still bleeding $30-$40,000 a year on that project that is being subsidized by the taxpayers.”

On the flip side, Broad Acres development has proven to be a boon for the City, with a break-even potential and future tax revenue.

“We’ve got two more lots out there yet that we haven’t sold — at $25K apiece,” Hansen said. “If those lots sell, we’re gonna come in around break-even. That’s a good project.”

Things Tracy has in its favor when it comes to new housing potential, Hansen said, include the fact that a rural city like Tracy provides more affordability for young families compared to metro areas; a rise in tele-networking (Tracy has strong broadband capabilities), which allows people to work at home more and more; Tracy’s full-service community backbone, with strong schools, good amenities and safe streets; and the City’s commitment in its infrastructure.

“When you invest in your community, that’s gonna make a difference in how people view your community and what it looks like,” Hansen said.


When it comes to paying for more housing in town, Hansen and Carpenter acknowledged that money plays a huge factor. Looking ahead to 2021, they listed a number of opportunities Tracy has to solidify its financial standing enough to afford major housing progress. Those include the sale of O’Brien Court (it is currently pending); considering developing a residential Tax Increment Financing District; selling the two remaining Broad Acres lots; further stabilizing Tracy’s current housing infrastructure through the promotion of the new Small Cities Grant; and pursuing additional grants (such as a federal EDA grant which is currently being worked on) to open up possibilities for a housing complex on Front St. The EDA grant would be put, in part, toward flood mitigation on city-owned property in the Front St. area.

“We need to set the pace for the next 10 years,” Carpenter said. “We need to build on what we’ve done; we have to sell the city, we have to sell what we have to offer, and tapping into financial resources is important.”

Carpenter said selling O’Brien Court would “open up the EDA and the City of Tracy for a lot of the things we want to do over the next five, six, seven years. The sale of O’Brien Court would kind of be icing the cake — not that we can’t do what we’re talking about without that, but it really would help us push forward.”


Paying people to live in Tracy?

While it might sound a bit out of left field, Hansen said other cities have done it, and it’s one way of “setting the pace” the two talked about last week.

“It might sound bizarre, but it’s part of our 10-year plan,” he said. “There are a number of communities around the country that are literally paying people to move there — some bigger, some smaller.”

Hansen added that any such proposal in Tracy would include caveats, such as potential homeowners would have to do things like purchase property, or start a business to prove they would stay in town.

“We can be creative,” Carpenter said. “Obviously, it’s got to be budgeted … but that’s one way to move housing forward.”

Another way to “set the pace” for housing would be to increase the supply of new housing in town by developing relationships with other companies, such as Summit Development, the group pursuing the purchase of O’Brien Court. Other ways of supporting new housing are working with local builders and marketing available infill lots; using free land as incentive for a developer/builder; and exploring purchasing property for future housing and investing in engineering to get land ready for construction.

Still, Carpenter said, “we have to go out and find these people” to build here. “We want to use our local builders if at all possible. If the local contractor is not interested, that’s when we’ve got to reach out.”

Hansen summed up the presentation by telling the council how vital it is to identify growth areas and engage the community in some kind of growth strategy for new housing in town moving forward.


Two open house events will take place this month at Broad Acres — from 2-7 p.m. on Friday, Aug. 14, and from 9 a.m.-2 p.m. on Saturday, Aug. 15.