Developers wanting to build residential projects in Costa Mesa will soon have to include affordable homes in their projects amid California’s worsening housing unaffordability crisis.
The new law is taking shape about a year since Latino health workers began calling on the city to enact rent control in a coastal city where about half of residents spend more than 30% of their income on housing.
And critics question if the proposed ordinance will actually boost affordable housing production as local officials are facing pressure from Sacramento to help address the state’s housing crisis.
City Council members voted 4-2 early Wednesday morning on a first reading of an ordinance to require developers to build affordable homes in future housing projects.
“This inclusionary housing ordinance really is an anchor for affordable housing, which I understand and believe is our highest priority here on this council,” said City Councilwoman Arlis Reynolds at the meeting.
Councilmembers Jeff Harlan and Manuel Chavez were the dissenting votes and called for the ordinance to be continued to a future meeting. Councilman Don Harper was absent.
“The only thing that lowers rents is not rent control, it’s not affordable housing, it’s supply,” said Chavez, the only renter on the council. “This is probably going to be the biggest thing we do on this council. It is going to dictate how much more it costs to buy a property to make housing.”
Officials agreed it’s a starting point and the details of the ordinance could change drastically at a future meeting.
The law as currently proposed will impact developers working on residential projects with 15 or more housing units.
Tuesday’s decision comes after study sessions, votes by the planning commission and the city worked with a consultant to help develop the ordinance last year.
[Read: Costa Mesa Leaders Consider Mandating Affordable Housing Developments]
Costa Mesa officials won’t be the first in the county to implement such an ordinance.
Leaders in Santa Ana, Huntington Beach, Irvine, Brea and five other cities in OC have already adopted similar laws.
The Proposed Law in Costa Mesa
While there were recommendations by the city hired consultants and another by the planning commission on how the ordinance should work, Councilwoman Andrea Marr proposed some changes that received support at this week’s meeting.
Under the currently proposed law, developers will be required to build affordable homes for any project with 50 units or more onsite. If the project is less than 50 housing units they can pay a fee instead that will go into the city’s housing trust.
In rental projects with 60 or more dwelling units per acre, 11% of the development has to be for low income housing or 7% of the project has to be for very low income housing.
In rental projects with under 60 dwelling units per acre, 6% has to be for low income or 4% for very low income.
Developers can also build affordable homes offsite or dedicate land to the city if approved by officials.
And if the city enters an agreement with the developer to provide equal affordable housing obligations or community benefits elsewhere they are exempt from the proposed law.
Incentives like lower parking requirements and rezoning to allow for greater density housing will be used to help get developers to build affordable homes.
Adam Wood, Vice President of the Building Industry Association OC, said the program wasn’t incentive based but mandated by the state.
“It’s going to be an extra hurdle, a barrier, a restriction on housing production, we’re going to see fewer units built in a housing crisis, when a policy like this moves forward,” he said at the meeting.
Marr pushed back on Wood’s comments.
“We’ve talked about up zoning, we’ve talked about adding incentives, we’ve talked about adding more value to property and that’s still not considered an incentive by the definition of some folks,” she said.
“The notion that we are impeding development to me is just absurd.”
Members of the Costa Mesa Affordable Housing Coalition said the proposed ordinance had been severely weakened from its initial proposal last year and said projects with 60 or more dwelling units per acre should develop 15% for low income or 10% for very low income housing.
Cesar Covarrubias, Executive Director of the Kennedy Commission, agreed with coalition members and pointed to the success in neighboring Santa Ana with the same threshold.
“If Santa Ana can do this, Costa Mesa can certainly do this. It’s supported by the data. The consultant that’s doing your analysis, did Santa Ana’s analysis and their inclusionary housing ordinance also. It’s proven to work,” he said at the meeting.
State Mandated Housing Goals & Renting in Costa Mesa
State officials have tasked Costa Mesa leaders to zone for 11,760 new homes in the city by the end of the decade – of which over 4,700 homes have to be for very low and low income families.
Initially, officials pushed back on those goals arguing that they were unrealistic but are reluctantly moving forward to try and meet them.
Staff said the proposed law is necessary to maintain compliance with their state mandated housing plan.
[Read: Half of Orange County Lacks State Approved Housing Plans as HB Reignites Debate on Mandates]
Nearly half – 47% – of Costa Mesa residents are low income and about 29% are very low income, according to a staff report.
According to 2023 income limits from the state Housing and Community Development department, if a single-person household makes less than $80,400 a year, they’re considered low income. The very low income limit is $50,250.
The average rent for a one-bedroom apartment in Costa Mesa is roughly $2,700.
Close to half of 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,” according to the staff report.
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.
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