As cities throughout California struggle to meet hefty goals set by Sacramento on new housing construction, some of Orange County’s most impacted cities are increasingly redeveloping aging malls to help meet their quotas.
The large commercial sites could help cities not only meet housing obligations, but redevelop large pieces of land that have either sat vacant or underutilized after online retailers like Amazon and the pandemic took out many brick and mortar stores.
Lots of cities across Southern California are looking to redevelop malls into a mix of housing and retail.
Low-income housing is increasingly being built alongside market-rate units at aging malls throughout Orange County – old lots in Brea, Westminster, Buena Park and Laguna Hills.
But one of Orange County’s leading low-income housing advocates, Cesar Covarrubias, questions whether cities are creating enough affordable housing opportunities on the sites.
“The reason we started tracking them is one they’re not allowing deep affordability,” he said, adding cities are giving up a lot of decision-making power by approving specific land use plans for malls.
Covarrubias, executive director of the nonprofit affordable housing advocacy group, the Kennedy Commission, said much of the affordable housing being built at mall developments is moderate income – which is nearly market rate.
In Orange County, a single person is considered low income if they make less than $80,400 a year, according to the state Department of Housing and Community Development.
Brea is seeing 380 housing units coming to its old mall – 38 of which are slated to be affordable.
[Read : 380 Apartments, New Retail and Dining Coming to Brea Mall]
Up to 3,000 housing units could be built at Westminster Mall, with 10% of those expected to be affordable housing.
Roughly 1,500 housing units are slated to be built at the old Laguna Hills Mall, including 200 affordable housing units.
Most recently, city officials approved redevelopment plans for the Sears building at the Buena Park mall, which calls for 1,300 housing units, with 176 of those units slated to be nonprofit.
[Read: Old Sears Building At Buena Park Mall to be Turned Into 1,300 Housing Units]
Michael Massie, chief real estate officer of the nonprofit affordable housing developer, Jamboree Housing, said it’s important for cities to bake affordable units into mall redevelopments.
“As these are large scale developments, I think it makes sense, I think it’s important and I think it’s imperative to weave affordable housing into that. And we’ve partnered with market rate developers on a number of opportunities,” Massie said.
Under state housing mandates, cities throughout Orange County have to collectively zone for more than 180,000 new homes – 75,000 of which have to be designated for low and very low-income families.
Massie acknowledged some of the state-mandated housing numbers could be unrealistic, but he welcomes the stricter standards calling them a needed push from Sacramento because of failed housing policies at the local level.
“I’m willing to cop to that. Is it harsh? No. The reason it’s not harsh is that for the past three generations this state has continued to grow at an unbelievable peace and we have unconsciously underbuilt housing. It is criminal what we’ve done,” Massie said.
Marisol Ramirez, program director for the nonprofit Orange County Communities for Responsible Development, said while malls offer up good opportunities for new housing, she worries the developments could create overcrowded conditions.
“I think that’s dangerous because you’re going to create communities that are very condensed. We know historically, that creates a frustrated community,” Ramirez said. “They’re not thinking long term about infrastructure and land use.”
Missed Opportunities?
Covarrubias said cities are often giving up critical steps of the approval process that could mandate more low-income housing at mall sites as these developments surface throughout Orange County.
“We see this as a good opportunity, but we’re also seeing cities aren’t being as proactive to increasing affordability levels,” Covarrubius said.
He said cities should carefully consider the developments instead of passing them in one vote – usually with a specific land use plan.
“That’s the issue with these specific plans, they basically are impeding density bonuses from working,” Covarrubias said, adding those density bonuses allow for more market-rate houses to be built so the low-income housing doesn’t eat into developer profits.
A quick fix, Covarrubias said, is for cities to consider an inclusionary housing ordinance that mandates a certain percentage of affordable units in any housing development being built by the city – or pay fees into a city’s affordable housing fund.
According to data from the Kennedy Commission, scores of Orange County cities are far behind on developing affordable housing aimed at low income residents.
Covarrubias said in order to reverse trends, cities should mandate “a minimum of 15%, 20% to be low to very low” on the income requirements for affordable housing developments.
“Unless the city has a very robust housing policy, that’s not going to happen,” he added.
The redevelopment plans for Westminster Mall, for example, allows up to 3,000 housing units – 10% of which need to be affordable, with a majority of that geared for low and very low income residents.
Massie said inclusionary housing policies work, but there could be other ways to get low-income housing built.
“Don’t get me wrong, I’m a supporter of inclusionary housing as well, but let’s not kid ourselves, it’s a tax” on developers, Massie said, adding that a dedicated group of city staff could push developers to build a certain level of affordable housing during the approval process.
Ramirez said cities struggling with building low-income housing should seriously consider mandating affordable units on new developments.
“It’s something that would be helpful,” Ramirez said, noting Anaheim’s affordable housing numbers “have been so disproportionate – they’ve met the need for certain wage demographics, but severely neglected very low income families.”
She also suggested cities look to underutilized industrial zones for future housing opportunities.
“There’s also a lot of other spaces we could be looking at, where we’re actually creating neighborhoods and not skyrising the apartments,” Ramirez said.
While Santa Ana officials are moving to redevelop the local mall into a mix of housing and retail, there isn’t currently any affordable housing being proposed.
But because the city has an inclusionary ordinance, the developer is paying a fee into the affordable housing fund. Santa Ana city spokesman Paul Eakins said the developer is paying $1.2 million into the affordable housing fund.
How to Make Affordable Housing Work?
Massie, the chief real estate officer of Jamboree Housing, warns cities to not concentrate affordable housing in one particular area.
He said the trick is to blend the affordable housing units into the overall developments so it doesn’t lead to a type of economic segregation seen in the past – something mall sites can offer developers.
The planning and building in the 50s and 60s, Massie said, created economically segregated neighborhoods throughout the region, like the part of town where there’s a high concentration of old apartments – something he calls a “demonstrable failure.”
“What we see as important is that our projects are woven into the community,” Massie said. “I never want somebody to drive by a project and go oh that’s affordable housing.”
The state’s mandated housing goal, according to the state Housing and Community Development department, is to “encourage the development of a RHNA allocation plan that promotes more economically and racially integrated communities by allocating housing to high-resource, job-rich areas.”
Yet that process of assigning housing units to cities has faced a wave of scrutiny from local elected officials.
For example, the City of Fullerton has to zone for nearly 9,300 more homes than the City of Orange – even though the cities are roughly the same size with the same population.
[Read: California’s Housing Mandates: One Size Fits All? It Depends Who You Ask]
In the end, Covarrubias said, residents need affordable rents.
“We hear the arguments that you need more housing – but we need more housing that people can afford.”
Spencer Custodio is the civic editor. You can reach him at scustodio@voiceofoc.org. Follow him on Twitter @SpencerCustodio.
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