Will developers build affordable housing if Anaheim doesn’t require it?

City Councilman Jose Moreno says they haven’t, and won’t.

“When we ask, ‘how much of it is affordable?’ and they say ‘none,’” Moreno said of developers for new housing projects. “When we ask ‘why not?’ they say, ‘because we don’t have to.’”

A state study shows Anaheim needs 1,256 units of very low-income housing by 2021 and 907 units of low income units. The study assessed city needs for the eight-year period between 2014 and 2021. Of the total needed, the city so far has issued permits for 119 of the 1,256 very low-income units and 249 of the 907 low income units.

Meanwhile, the city exceeded its need for above moderate income units. The need between 2014 and 2021 is defined as 2,501 units, but the city issued permits for 4,714 units in half that time, according to the staff presentation.

Moreno has lobbied his colleagues to consider mandatory policies that would require developers to either include affordable housing in their projects or pay new fees.

Such policies, known as inclusionary housing ordinances, typically require developers to set aside a certain percentage of units in a project for affordable housing. Some ordinances give developers the option of instead paying a fee that goes toward construction of new affordable housing units.

Another policy, known as a linkage fee, would charge commercial developments a per-square-foot fee based on whether the types of jobs the development creates would generate a demand for affordable housing.

At least six Orange County cities – Brea, Huntington Beach, Irvine, Santa Ana, San Clemente and San Juan Capistrano– have an inclusionary ordinance on the books, according to a city staff report. 

Moreno argued during an Oct. 24 city council meeting that letting the market lead the housing market hasn’t been effective for motivating developers to build affordable housing to accommodate the city’s existing workforce. Instead, the city has largely been building new housing for moderate and higher income families, he said.

City staff say since Gov. Jerry Brown eliminated redevelopment agencies statewide in 2011 – a tool which generated $14 million annually in funding for affordable housing— they have fallen short of meeting goals for building new affordable housing.

Other federal entitlement funds for housing also have decreased over the past decade, according to city staff.

Almost all the new affordable units in Anaheim are generated by standalone projects dedicated to affordable housing, staff said.

Moreno’s argument didn’t sway at least three of his six colleagues, who said they would not support any kind of mandatory policy.

Councilwoman Kris Murray said the city already has been proactive in constructing affordable housing – pointing to an Affordable Housing Strategic Plan established by a previous council in 2006, under which 1,511 new units were completed between 2005 and 2014.

“We’ve had a very aggressive policy in place…that put a lot of housing stock in place by repurposing commercially zoned and industrial zoned areas and then working with redevelopment to create that housing stock,” Murray said. “The limit to that has been the state’s dismantling [of redevelopment].”

Murray said she would like to see the council use tools similar to redevelopment, known as tax increment financing, to generate funds to use toward affordable housing.

“I would prefer we work in that direction and not look at some of these programs that fly in the face of our freedom-friendly history here,” Murray said.

Mayor Tom Tait and Councilman Steve Faessel both said they would support voluntary, incentive-based policies, rather than mandated ones.

“I’m more comfortable giving options to developers than mandating them,” Faessel said. “I for one would be more for more honey than hammer.”

Councilwoman Denise Barnes didn’t comment on whether she was in favor of mandatory policies. But she called for more housing to support low wage workers, such as those who work for Disneyland.

“Would anybody be interested in promoting low [income] affordable housing, near where they work, have transportation, have schools,” Barnes said. “And that way they could carry on and have a living wage and still be able to be near their job, and maybe even not have a car?”

Moreno asked his colleagues to set aside their ideological beliefs about government mandates to consider his proposal.

“When you don’t mandate this kind of policy, you’re really mandating residents to live two or three families to an apartment,” Moreno said. “We’re mandating people to live in garages or live in the streets. Or we’re mandating them to commute for an hour to two hours.”

The council has formed an ad hoc committee, consisting of Moreno, Barnes and Councilwoman Lucille Kring, to consider developing a policy, although Moreno didn’t specify what kind of policy.

Two representatives of the building and real estate industries spoke against mandatory policies at the meeting.

“Inclusionary zoning is an added regulatory hurdle…simple economics shows you cannot tax a market into existence,” said Adam Wood of the Building Industry Association of Orange County.

Peter Herzog of the Commercial Real Estate Development Association said instituting a linkage fee would only pass on the cost to homebuyers and raise the cost of housing.

“The problem with regards to affordable housing, and housing across the entire spectrum is it costs too much,” Herzog said. “What a linkage fee is, is to add a new cost onto housing.”

Joese Hernandez of the group Orange County Communities Organizing for Responsible Development, or OCCORD, encouraged the council to take aggressive action to increase the affordable housing stock.

“All we see is luxury housing developments going up left and right,” Hernandez said. “Affordable housing must be used as a tool to fight gentrification, not facilitate it.”

Contact Thy Vo at tvo@voiceofoc.org or follow her on Twitter @thyanhvo.

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