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Santa Ana officials could be moving closer toward prioritizing affordable housing in the city over luxury development. 

A City Council majority under Mayor Vicente Sarmiento appears poised to reverse a prior relaxation of the Housing Opportunity Ordinance, a city law requiring certain housing projects to either create affordable units on site or pay into a fund reserved for building affordable housing elsewhere.

Developers could go back to paying $15 per-square-foot for projects with no affordable housing on site — a price set under the original version of the housing ordinance — as opposed to $5 under the current version of the law, modified by a different council majority last year. 

That was the direction most council members appeared to give city staff at their Tuesday meeting — a final direction on the issue before tasking City Hall with drafting an ordinance that again modifies the housing ordinance for a council vote at least 4 weeks from now, likely longer.

Projects which employ skilled labor professionals — namely those who live in Santa Ana — could get their fees marked down on a “sliding scale” basis under the ordinance, according to council direction at the meeting. 

Different numbers were thrown around as to how much the fees for those projects could be reduced to. 

Staff proposed $5 per square foot in their report attached to Tuesday’s meeting. Sarmiento, for example, said his floor was at $10.

Other amendments proposed include applying the skilled and trained labor requirement to any housing project that is funded by the city’s reserve fund of in-lieu fees paid by developers who don’t include affordable housing on site. 

The policy would also be expanded in terms of what kinds of projects would be subject to the affordable housing obligations. 

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The idea is opposed by Councilmember Phil Bacerra, now finding himself in the minority on the issue, who led a previous council majority last year in relaxing the Housing Opportunity Ordinance fees from $15 to $5. 

Bacerra and other proponents for reduced fees have argued that, during the 5-year period from 2015 to September 2020, no developers pulled permits to build in the city.

When the fee dropped to $5 per square foot last year, the city gained $3.7 million in fees from two different developers to be used toward affordable housing projects. 

Proponents for keeping the current developer in-lieu fees have also argued that Santa Ana has far exceeded the amount of affordable housing required in the city by state authorities. 

Sarmiento, like many affordable housing advocates in the city, pointed out on Tuesday the city has hit market-rate, for-profit housing at a much faster rate. 

“We’ve done a pretty good job of meeting the demand for the affluent and the wealthy, and that’s not a big chunk of our Santa Ana community,” Sarmiento said during Tuesday’s council meeting. 

He referred to a study commissioned by city officials, presented to the City Council earlier this year, which outlined certain areas of the city where marginal slices of the population could afford adequate housing.

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Phan drew her own example: “Looking at the exact rental unit I was in before I bought my town house — one-bedroom, 750 square feet — is now going for $2,600 a month. That’s more than my mortgage. More than my 3-bedroom town house mortgage.”

The responsibility of any City Council, Sarmiento said, is “to build to the needs of their community — not to build to the needs of the community that lives outside the city that we represent.” 

Bacerra said the proposed amendments from the opposing side of the dais are “painful because I know they’re not going to encourage more housing” — that the new obligations will shift the ground under developers’ feet and take away “certainty” when it comes to the financials.

“Somebody on the dais not too long ago posed the question of who we’re building for — I think with these amendments to the ordinance, my answer is we’re building for nobody,” he said. 

Phan reasoned that “if the $15 is too expensive or the skilled and trained (requirement) is too expensive, then they (those developers) should consider building (affordable housing) on site.”

“That’s what we’re trying to do here, right? We’re saying ‘build on site.’ Because mixed income development is safer, healthier, more diverse and makes the community more prosperous,” Phan said. 

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