Costa Mesa could soon become the latest Orange County city to mandate affordable housing at new developments in an attempt to combat the increasing housing unaffordability crisis across California.
Housing advocates say such mandates are critical in producing units working class residents can afford.
Meanwhile, others say cities could offer different development incentives and achieve the same results.
It comes as cities across the county – and Southern California – lag behind on affordable housing production, an issue perplexing city councils across the region.
Costa Mesa City Council members and planning commissioners are expected to head into a joint study session at 5 p.m. Wednesday to give staff recommendations on what a new ordinance could look like – known as an inclusionary housing policy.
Typically, the policies mandate a certain percentage of a new housing development consist of affordable rental units, or the developer has to pay a fee into a city fund aimed at producing such housing.
“Homelessness is a housing problem. If you look at region by region, two factors that drive homelessness is vacancy rate and absolute cost of housing,” said Mayor John Stephens at the May 16 study session.
“We’re hurting in those categories and that’s why we spend $3.6 million of our budget to address homelessness. So this is critical to keep people in shelter.”
Chip Ahlswede, spokesman for the OC Apartment Association, said one of their biggest concerns is making sure the affordable units don’t stand out in housing developments or regulating what kind of unit it would be.
“We don’t want a dedicated set aside … or it has to be a three bedroom, or a one bedroom or what not. Because different applicants have different needs, it should be focused on the individual as opposed to specific set asides of unit mixes,” Ahlswede said in a Tuesday phone interview.
He said density bonuses – development carve outs that allow more housing per acre – tend to work better than mandates.
Cesar Covarrubias, executive director of the nonprofit housing advocacy group, the Kennedy Commission, said cities do a good job at fostering development of market-rate housing, but lag behind producing affordable units – something an inclusionary house policy could address.
“You have to have those programs to ensure that the affordability is happening,” Covarrubias said in an interview earlier this month.
He said cities should make sure up to 20% housing developments are affordable “in exchange for all the incentives for developers.”
At the May 16 study session, a majority of council members and planning commissioners seemingly agreed the city needs to mandate affordable housing in new developments.
Costa Mesa Residents Struggle With Rent
Like many others throughout Orange County, many residents in Costa Mesa are struggling to make rent.
Councilwoman Arlis Reynolds said the city’s in dire need of affordable housing.
“I want to make sure the outcome is deep affordability,” Reynolds said at the May 16 meeting.
Her colleague, Councilwoman Andrea Marr, said the mandatory affordable housing proposal is “an opportunity to do right by the community.”
City staff found nearly half of Costa Mesa residents spend more than 30% of their income on housing and “over a quarter of renters experience severe housing cost burdens that exceed 50-percent of gross income.”
Nearly half – 47% – of Costa Mesa residents are low income and roughly 29% are very low income, according to the May 16 staff report.
According to 2023 income limits from the state Housing and Community Development department, if a four-person household makes less than $114,800 a year, they’re considered low income. The very low income limit is $71,750.
For a single-person household, the low income limit is $80,400 and very low income is $50,250.
Councilman Jeffrey Harlan said officials need to take a cautious approach to crafting the ordinance to get a policy that works.
“Personally, I don’t want something on the books – I want something to create housing, that’s the goal here,” Harlan said at the May 16 meeting. “This has got to be a collaboration, not just with council and staff, but with the community and our development partners.”
At the May 16 joint study session, some officials voiced support for more development incentives.
“The more incentives you can put in … the more likely you are to succeed with it,” said Kathe Head, a city-hired housing consultant with Keyser Marston Associates.
How Much Will Rent Be?
Affordable housing developments typically charge no more than 30% of a household’s gross income for rent.
“As shown in the tables, a household of four with an income of $108,400 would be considered ‘low-income.’ An affordable rental price for a two-bedroom apartment for a low-income household is $2,003. However, the average rent in Costa Mesa for a two-bedroom unit is $2,649 (2020),” reads the May 16 staff report.
The report came out just before the state’s new 2023 income limits were released in early June, which saw the thresholds go up.
Affordable housing rents could be as low as $951 a month for a studio and $1,085 for a one-bedroom apartment for the city’s poorest residents, according to an analysis from the city’s housing consultant, Keyser Marston Associates.
For moderate income residents, those rents could range from $2,201 to $2,515 a month for the same type of units.
At least one council member also wants to examine affordable home ownership.
“Whose goal is it here to become a renter? That’s not a goal. That’s something you do when you can’t afford to own a home,” Councilman Loren Gameros said at the May 16 study session.
“So we have to ask ourselves, are we doing that – are we creating a pathway for homeownership?”
A four-bedroom home sale price could be as low as $216,000 for very-low income residents and $490,600 for moderate income residents.
State limits set moderate income at $153,350 for a four-person household and $107,350 for a single person household.
Gameros also floated the idea of taking a look at wages in the city.
“Do we provide a model for livable wages? Do we have meetings for those? Because most of the people here are underemployed,” Gameros said. “It’s a very tough question – it’s unanswerable.”
He said he wants to see “an opportunity for livable wages – because that is what’s going to provide a pathway for homeownership.”
Spencer Custodio is the civic editor. You can reach him at email@example.com. Follow him on Twitter @SpencerCustodio.
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