Newport Beach Spends Over a Million to Chase Housing Goals They Oppose

JULIE LEOPO, Voice of OC

A view from the Marina Park and Community Center in Newport Beach.

Newport Beach city council members have vocally opposed regional quotas that would add nearly 5,000 housing units to their community in the next decade amid state pressure to address California’s housing shortage.

Yet at the same time, they’re required by state law to spend taxpayer dollars to design housing plans they don’t really support.

Earlier this month, council members unanimously approved an over $1.2 million agreement to hire Kimley-Horn and Associates, Inc, a consultant firm, to prepare required updates to parts of the city’s general plan including housing goals. 

“Cities are often opposed to state mandates, but that doesn’t mean we get to ignore the state mandates,” said Mayor Will O’Neill. “We still need to look toward compliance and so that’s the reason why we are moving forward with a contract.”

The state is requiring Newport Beach to update their housing plan by October 15, 2021.

City officials have requested state legislators sponsor changes to current housing law including one to extend the deadline for the plan update for two years.

But just in case those efforts to bring down the amount the city would have to zone for and to postpone the deadline don’t work, the city is taking steps to comply with the state.

“We don’t get to pick and choose which laws we comply with. We have the obligation to comply with the laws that have come down from the state of California so long as they’re valid. I don’t see a situation where we would simply ignore a state mandate and suffer the consequences of that,” O’Neill said.

The state sued the city of Huntington Beach last year for allegedly failing to plan for more affordable housing.

O’Neill said his understanding is that the city could potentially lose the ability to run its own community development department if they don’t comply with the mandate.

“This housing element is the most challenging housing element that’s ever come across the cities in the state of California and the reason why is because the state has changed the compliance rules, the rules are now harder and tougher,” said Seimone Jurjis, Community Development Director, at a April 14 meeting.

If the city fails to meet the deadline they can receive fines that range from $10,000 to $600,000 a month, according to state law.

But in order to make a plan that meets the city’s housing needs, each city must first know how many affordable homes they must zone for through a process called the regional housing needs assessment.

The state has assigned a regional board of elected officials called the Southern California Association of Governments (SCAG) to come up with zoning for 1.3 million homes across six counties including Orange County by Oct. 2029.

One proposal on how housing goals would be distributed among the counties went through a months-long review but an alternative allocation plan was put forward at SCAG’s November meeting last year by Riverside Mayor Rusty Bailey with support from Los Angeles Mayor Eric Garcetti. Bailey’s plan was ultimately adopted.

The new plan significantly increases housing goals for some cities in Orange County and away from Riverside County. Some city officials. Some city officials even accused Riverside and Los Angeles County for conspiring to “thwart” the process.

Under Bailey’s plan, the City of Los Angeles would be required to zone for more or less the same of the region’s allocation then the original plan which is the most out of the six counties. The city’s allocation is separate from Los Angeles County’s allocation.

“There was really no conspiracy,” Garcetti said during a Southern California Association of Governments regional council meeting on March 5.

“We should be the most vociferous saying right now there is an injustice because the gap between the housing put on us and the jobs we have is the greatest.”

The proposed quota could have Newport Beach zone for 4,832 homes but city officials have said that is an unattainable task. Officials have said that because Newport Beach is a coastal city, there is barely any land that is not regulated by county, state or federal agencies.

“We want to appeal that number. That’s a very high housing unit number. We don’t have to build these units, but we have to zone for these units and we have to do that and have policies in place that provide a number of affordable housing units in our housing element,” Jurjis said.

Cities across the county have criticized the methodology used to come up with their zoning allocations for not taking into consideration their concerns and input.

SCAG says the draft plan was approved by state officials from the Department of Housing and Community Development (HCD) , and that it fairly distributes new homes in a way where Orange County’s requirements are still less than its share of the region’s population.

“For those that might be seeking a compromise you should understand that the proposed draft methodology that HCD approved is already a compromise,” said Megan Kirkeby, Assistant Deputy Director of Fair Housing at the Department of Housing & Community Development during the meeting in March.

Newport Beach has already started working on an appeal to their zoning allocation but can not file it until those allocations are finalized by the regional board. The board has delayed finalizing those numbers because of the Coronavirus pandemic but have a meeting scheduled for May 7.

Despite the delay the city has not received any extension to the housing plan update deadline but Jurjis said the League of California Cities are requesting the Governor’s Office to do so.

“We’re seeing a rather different world right now in terms of a drive for density so hopefully this is one of those times where people can reconsider some of the housing policies that have been coming out of Sacramento for a variety of different reasons,” O’Neill said at the April 14 council meeting.

In the last cycle, the city was mandated to build five housing units but permitted 1,738 instead, with a bulk of them for above moderate income level housing and a little more than for very low income level housing, according to an email from Jurjis.

“There should be plenty of incentives to find ways to bring in affordable housing into every community in California,” O’Neill said in a phone interview with the Voice of OC.

“In a situation where land is particularly expensive, like it is in most coastal cities in California, dictating that zoning exist for formal housing probably is not enough. You’re almost certainly going to need to incentivize developers to build affordable housing and there are plenty of ways to do that.”

Hosam Elattar is a Voice of OC news intern. Contact him @helattar@voiceofoc.org or on Twitter @ElattarHosam.