Santa Ana Moves Forward With Reduced Affordable Housing Requirements

JULIE LEOPO, Voice of OC

Santa Ana apartment complexes in the Townsend neighborhood on April 11, 2020.

It may have just gotten easier for Santa Ana developers to build for-profit apartments in Orange County’s densest city.

Santa Ana City Council members in an initial vote Tuesday night relaxed affordable housing requirements for builders, despite dozens of public commenters raising concerns about the city’s rising costs to rent and the uncertainty facing working-class tenants who struggle to make the payments.

The policies are expected to come back to the council for a second and final reading at a future meeting. 

With council members Vicente Sarmiento and Nelida Mendoza opposed, the seven-member panel revised certain parts of the city’s Housing Opportunity Ordinance, which for the most part requires for-profit developers to either include low-income units in their plans or pay into an “in-lieu” fund helping the city build them elsewhere.

But now that in-lieu fee is on its way down from $15 per habitable square foot to $5. Council members also narrowed the criteria for projects to which the policy would apply. The relaxed provisions are proposed to remain in effect until at least April 2021. 

Proponents on Tuesday night — many of them council members, real estate groups and construction unions — argue that Santa Ana has exceeded its affordable housing goals; the ordinance is too burdensome; and that the coronavirus pandemic has withered the local economy and slowed development in the city, making incentives necessary. 

Opponents — many of them affordable housing advocates and community activist groups — contend that while the city has exceeded its affordable housing quota over the years, it’s been punching out for-profit, higher-income housing at a much faster rate.

They add those housing goals — which are set by the state — city officials say they’ve exceeded don’t accurately characterize what opponents argue is still a dire need for affordable housing.

The affordability problem has become apparent to city officials themselves, who implemented rent freezes and eviction bans as residents were hit financially by the coronavirus pandemic.

“Real estate developers are bottom-line oriented,” said Ward 3 council candidate Jessie Lopez, echoing the sentiments of the critics of the proposed revisions to the affordable housing ordinance. “Overdevelopment impacts us all — our parking, our traffic, our air, how long you have to wait at a red light to make a left turn.”

Lopez contended what really motivated Tuesday’s discussion were officials’ campaign money prospects, in a city where real estate developers have for years thrown thousands of dollars at council candidates.

Former city staffer and past council candidate Manny Escamilla said “You have 20% of folks here locally that are at the cusp of being evicted from their homes, people that have over the last 10 to 20 years been systematically squeezed and moved into” other areas like the Inland Empire or out of state where the cost of living is cheaper.

“Housing has now become unaffordable in the City of Santa Ana,” he said, adding “what we’re doing here is starting to weaken the idea that everybody deserves an affordable shot at housing, that working class people are deserving of living in great communities … They are the ones who built these communities.”

Councilman Phil Bacerra, a proponent of the policy revisions, before the vote said “the intentions behind the HOO (Housing Opportunity Ordinance) I believe were good but the HOO has failed to deliver on its promises,” adding that “no in-lieu fees that have the $15 rate have been collected this last fiscal year, and since (the law’s) inception nine years ago we have seen only $17 million collected.”

He said “other cities in Orange County have not met or exceeded their (affordable housing goals) — at least not at the level Santa Ana has” and told members of the public asking the council not implement revisions to “stop expecting Santa Ana to shoulder the responsibility.”

“I believe the proposed revisions will do much more to generate revenue for our inclusionary housing funds,” he said.

Sarmiento, who opposed the changes, said “I don’t know who we’re serving.”

Sarmiento described a city full of “folks that are barely making a living and living paycheck-to-paycheck,” children “studying in closets,” and said “it’s unfortunate to those members of the public who we’re turning our back on. This has just turned into a windfall.”

He said he initially supported ways of finding relief for housing providers, but “what’s happened is this has turned into something that is really …  shifting of priorities from serving families we’re supposed to represent and give them opportunity to live in a dignified place, to saying ‘look, we’re going to start producing market rate housing and a lot more of it.’”

Councilman Juan Villegas responded immediately, saying “We can’t be the affordable housing area for the entire county – these other cities need to do the same thing. They need to step up. Ask them to step up regarding housing. It’s a problem in this whole state.”

Villegas’ argument is in step with city officials’ past remarks on issues like homeless shelters in the city, one that similarly involves the availability of housing and who gets it.

Councilwoman Mendoza, initially supportive, was a “No” when council members opted to apply the $5 in-lieu rate across the board, after it was previously proposed to only reduce the in-lieu fee to $10 for projects that had already been entitled.

Yet even among the revised policy’s supporters, there was division.

Construction unions asked council members Tuesday to mandate union labor for future projects as part of the revisions, while real estate associations and building industry groups in public comment warned the increased cost of union labor would further discourage development.

Council members Bacerra and Jose Solorio asked staff to come back with information about what a union labor requirement provision in the new policies could look like, when the item returns to the council for a second and final reading Sept. 1. 

Brandon Pho is a Voice of OC staff writer and corps member at Report for America, a GroundTruth initiative. Contact him at [email protected] or on Twitter @photherecord.