State housing regulators rejected Orange’s housing plan last week after developers and advocates raised concerns that all of the spots city leaders have zoned for housing are undevelopable during California’s housing unaffordability crisis.
It comes as Huntington Beach is embroiled in a legal battle against Gov. Gavin Newsom for rejecting a state-mandated housing plan, which aims to develop affordable housing throughout the state.
In Orange, a different battle is playing out – one that seemingly sidesteps housing mandates by zoning on land that’s already developed with long-term leases.
“This is all a fraud, Orange has put forward a fraudulent housing element,” said attorney Allan Abshez, who represents developers behind a rejected housing project.
“The city knows very well that these sites are occupied and really can’t be used,” he said in a Monday phone interview. “We think the city knew that and was assuming that no one was looking and produced a housing element that’s not compliant.”
The zoning choices were also questioned by the city council when they approved the plan on Feb. 14 earlier this year, but city staff said the sites have a potential to be developed into housing and council members unanimously passed the plan.
Now, state officials are calling on Orange to revise its housing plan despite initially telling city council members they’d likely approve it.
Councilwoman Arianna Barrios said in a Tuesday interview she is disappointed in the decision and feels as if the state keeps moving the goal posts for their housing plan.
She also said they’re not trying to sidestep the law.
“Are we trying to be sneaky about this? Absolutely not,” Barrios said. “It’s just starting to feel very unfair.”
The councilwoman said the public comment process for the housing plan had ended and said the state already reviewed their plan several times.
“Yet [the Department of Housing and Community Development] took people’s comments, who have a vested monetary interest that they want to get through and are now trying to blow up our process,” Barrios said.
“If that’s not a conflict of interest, I don’t know what it is?”
She adds they’ve had difficulty getting state officials on the phone to answer their questions.
State Examines Orange’s Housing Plan
Melinda Coy, Proactive Housing Accountability Chief for the California Department of Housing and Community Development, wrote in a Friday letter that the city’s plan needs to be revised before state officials certify it.
To read the letter, click here.
During an initial review, state housing officials found some of the land Orange included in the housing plan looks undevelopable.
“Public comments received as part of this review provided evidence that some sites identified in the inventory were subject to recorded covenants, reciprocal easement agreements, leases, or other declarations that could impede the development of residential development in the planning period,” reads Coy’s letter.
One of the sites Orange officials claimed they could develop 193 housing units at 1900 W. Katella, which is currently an active training facility for the Orange County Sheriffs’ Department.
Sgt. Mike Woodruff, a spokesman for the sheriff’s department, said there’s no plans to shut down or sell the facility in a brief phone interview.
The other sites the city picked for housing included the Orange County Classical Academy charter school, the Ayres hotel, the city’s stadium promenade and the Outlets at Orange.
At their Feb. 14 meeting, city council members raised questions about the selected sites.
“What was the rationale behind picking some of the properties?” said City Councilman Jon Dumitru at the meeting. “There’s hundreds of properties that would make better sense than some of the ones that were picked.”
Interim City Manager Tom Kisela explained that the sites only need to have the “potential,” to one day support housing, and that all the land included in the city’s plan was zoned with a possibility for housing development.
“We go out and we look for locations that are currently zoned for and could have the potential, and I think that’s the key word that the state is looking for there,” Kisela said. “That’s the criteria we’re looking at.”
Advocates and Developers Raise Concerns
Cesar Covarrubias, Executive Director of the Kennedy Commission, said city officials need to find land that can be developed into housing – or justify the ones they picked.
“Are they going to be able to move forth with those restrictions that they have today? If not, then they have to identify additional sites to put into the housing element to ensure that they are going to be available for affordable housing development,” Covarrubias said.
Altogether, the city’s plan zones for 3,936 new housing units over the next housing cycle that ends in 2029, a plan they’re required to create under state laws or face severe penalties.
[Read: What Happens To Cities That Defy California’s Housing Mandates?]
Elizabeth Hansburg, co-founder of People for Housing, applauded the state for holding the city accountable and said that Orange has fewer homes to zone for than Fullerton – a city similar in size.
“In my mind, that means it’s all the more important that Orange actually has room for those [homes],” Hansburg said in a Tuesday interview. “It’s almost more important that their sites are truly viable.”
Aaron Schulze, an economic development manager for Orange, said in a Tuesday email the city maintains their housing plan is substantially compliant with state law.
“We are reviewing HCD’s letter internally to understand the basis for their conclusion,” he wrote.
Developers behind the proposed Chapman Yorba VIII project, a roughly 8-acre, 158-unit senior apartment development with 10% of units allocated for low income residents, brought their concerns to state officials after the city rejected their proposal, said the developers’ lawyer, Abshez.
“The City of Orange took the position that it has no vacant land available for the development of housing. That’s the position they took in their housing element. That’s actually not true,” Abshez said, pointing to the vacant site his clients have proposed for their project.
Orange’s Housing Plan
A Voice of OC review found that many of the largest sites in the plan can’t currently be developed into homes.
Almost 1,400 of the nearly 4,000 homes the city’s been tasked with zoning for – just over 35% – is set to be built on the parking lots for the Outlets at Orange, which is currently home to over 120 businesses, according to their website.
According to a city staff report on the housing plan, over 58% of the city’s current plan is made up of land that never got developed during the last housing plan they submitted to the state.
To review the full list of sites in the new plan, click here.
In an interview with Voice of OC, Abshez argued that it’s not realistic to develop at the Outlet.
“We then pulled title records on those properties, which showed that they have covenants and easements and leases that absolutely prohibit the use of the land concerned for anything but parking,” Abshez said in an interview.
Kaitlin Van, a spokesperson for the Outlets, declined to comment on whether or not they were looking to redevelop their property.
One of the penalties the city faces if the plan is denied is builder’s remedy – a once-obscure law that could allow developers to sidestep city zoning for housing development projects where 20% of the homes are affordable.
Abshez said his clients, Chapman Yorba VIII, have filed a preliminary application for a builder’s remedy project — at the same site as their rejected proposal — for an over 200 unit housing project with 20% set aside for low income residents at Chapman Avenue and Yorba Street.
In their letter to Orange, state housing officials backed up some of Abshez’s complaints, pointing out that if many of the restrictions on the parking at the Outlets and similar locations are true, the city needs to change the plan.
“Some declarations require that parcels may not be used for housing or have expiration timeframes well after the end of the planning period,” Coy wrote in her letter to the city. “The City may need to amend the housing element to revise the potential capacity within the planning period.”
The state’s decision to reject Orange’s housing plan comes as officials in nearby Huntington Beach face off with officials in Sacramento in a lawsuit over Surf City’s mandated housing plan.
[Read: California Sues Huntington Beach for Failing to Adopt a Housing Plan]
“Huntington Beach is essentially saying it will not comply, it thinks it’s exempt. The court is going to decide that. But most cities don’t do that,” Abshez said.
“Most cities are either complying, which they should do, or they’re doing what Orange is doing. They’re trying to finesse the obligation.”
Noah Biesiada is a Voice of OC reporter and corps member with Report for America, a GroundTruth initiative. Contact him at nbiesiada@voiceofoc.org or on Twitter @NBiesiada.
Hosam Elattar is a Voice of OC reporter and corps member with Report for America, a GroundTruth initiative. Contact him at helattar@voiceofoc.org or on Twitter @ElattarHosam.