About 100 people attended the first night of Plan Santa Barbara’s public workshop targeting density and affordable housing. The city’s housing policy doesn’t encourage middle-income units by offering subsidies, and there is no financial incentive to build standard units.

“The key policies we’re looking at today focus on future growth and the resources that are available to us,” said John Ledbetter, the city’s principal planner.

Affordable housing and community character also were on the list.

Many of the changes being proposed are for more dense residential projects that would be built in a “transit rich, very walkable and very walkable” downtown area. “We’ve heard across the board that people want to see smaller, more affordable units, not pricey luxury condominiums,” he said.

Maintaining the character of the community while increasing density and building more units is the challenge the city has been grappling with. “Today’s challenge is how close are we to encouraging this balance? That’s what we’re asking you,” Ledbetter said.

Dena Belzer, who works as an economist for Berkeley-based Strategic Economics, walked the public through the analysis she’s been working on that assesses the financial feasibility of building units targeted toward middle-income “work force” households.

“These are the people who work in Santa Barbara and fuel your knowledge-based economy in many ways,” she said. “This is a very important part of your community.”

Since no subsidies exist for this group and developers want to make a profit, Belzer’s group looked at a number of factors, including the real estate market and construction costs, and interviewed architects, developed a series of building scenarios and worked with city staff to see which would be the best.

Belzer’s model assumed that the units would be for sale, because that is the strongest market right now, and that they would not be rentals.

“If you assume rental, they don’t pencil out at all. In other places, this would not be considered a low or moderate income,” she said, and those people are still are not making enough money. “No one’s building housing for them.”

They found a demand for large luxury units but also a demand for nonluxury one- and two-bedroom units. “They’re not super big and super fancy, but would be built at a market rate,” she said.

They also tackled parking issues. Land costs are the same whether two or 25 units are built, so making smaller units would help instigate financial viability.

Belzer broke down the exact cost of those units in their model. An average luxury unit would sell for $1.4 million, a standard unit for $800,000 to $900,000, the work force units for $400,000 to $500,000 and a moderate unit for $300,000.

To put that in perspective with yearly salaries, a luxury unit buyer would need to earn $300,000, a standard unit buyer would make $200,000, a work force buyer $120,000 and a moderate buyer $80,000.

She then showed several scenarios for how the number of units related to developer profitability. The scenario with the most developer profitability of 15 percent had 62 units per acre.

Belzer said the study showed that the city would have to increase the number of units quite a bit to make the projects feasible.

During the meeting’s public feedback period, one commenter called the proposed increases to density “totally out of the question” and said Santa Barbara’s small-town character would not allow it.

Belzer said examples of that type of density can be seen in Minneapolis, Denver and San Franciscio, and Garden Court and Casas Las Fuentes are local projects that are subsidized but also serve as examples.

Anne Patterson, who recently retired from her position at the Public Health Department, said she was concerned about the community’s lack of work force housing. “The majority of my staff that worked in Santa Barbara did not live here,” she said, with most of them commuting from Ventura and Santa Maria. “It’s really a problem for lots of professionals and service workers.”

Cathy McCammon expressed concern that a 950-square-feet unit would be too small for families with children.

“Maybe those households are not so great for families with children,” Belzer said, but added that only a third of U.S. households include children younger than 18.

Eric Lohela, a 28-year-old city employee, said even though he makes well above the median income, there’s no way he’ll ever buy a house in Santa Barbara. “All of my friends are leaving because they can’t afford to live here,” he said.

Lohela also said that 950 square feet was quite large. “It can work and it would work for me personally,” he said.

The event, in the Faulkner Gallery of the Santa Barbara Central Library, will continue its public workshop at 6 p.m. Thursday.

— Noozhawk staff writer Lara Cooper can be reached at lcooper@noozhawk.com.