Costa Mesa is the latest city in Orange County to require developers to build affordable homes in their residential projects or pay the city a fee as part of what’s called an inclusionary housing ordinance.
It’s a requirement that local housing advocates say is effective in generating affordable homes and have long been pushing for across the county in a state that has the most expensive housing market in the U.S.
“We all talk in support of affordability. I believe we all want a program that works. Staff has given us a program that works. We’ve spent lots of money and lots of time designing a program specific to Costa Mesa and our housing opportunity sites, specific to our goals of onsite production, of deep affordability, of inclusionary housing so we’re not creating segregated low-income housing,” said Costa Mesa Councilwoman Arlis Reynolds during the April 2 council meeting.
Costa Mesa’s new requirement mandates developers building projects with 50 or more homes to account for 10% of the project for low income families or 5% of the project for very low income families.
Officials in most Orange County cities have either avoided such a requirement on developers, with some questioning how effective they are and fearing it would drive developers out.
Leaders in Anaheim – where independent investigators last year alleged developer favoritism at city hall – have resisted calls to mandate affordable housing.
“If I was a developer, I’d find it as a barrier to developing and for me, I think Anaheim has been such a good partner to so many developers that it doesn’t seem to be an incentive,” said Anaheim Councilwoman Natalie Rubalcava at council meeting last month.
[Read: Will Anaheim Require Developers to Build Affordable Homes?]
Chip Ahlswede, a spokesperson for the Apartment Association of OC, said ordinances like this work best when there is input from the developer community.
“When they’re taking into account the input of the people that will actually have to put together the project and figure out the financing of it all then it works out okay,” Ahlswede said in a Monday phone interview.
“We also find that when it’s a voluntary program, it tends to produce a lot more units than when it’s a mandated program,” he said.
Adam Wood, vice president of the Building Industry Association of Southern California OC chapter, said inclusionary zoning ordinances stop more housing than they create.
“This contributes to the supply/demand imbalance we have in California and ultimately contributes to the housing crisis. We hope cities across Orange County and the State can acknowledge this reality and work together to find constructive solutions that provide housing for all,” he said in a Tuesday email.
Costa Mesa’s decision comes as state officials are increasing pressure on local officials to zone for over 180,000 new homes – 75,000 of them have to be designated for very low and low income families.
Elected officials across OC have pushbacked on those numbers, calling them unrealistic.
Meanwhile, many cities across the Golden State are using inclusionary housing laws in an attempt to hit their mandated housing numbers.
According to a database launched by the California Coalition for Rural Housing and UC Davis, there are over 140 inclusionary housing programs implemented across the state.
In OC, the cities of Brea, Huntington Beach, Irvine, Santa Ana, San Clemente, Laguna Beach, San Juan Capistrano, La Habra, and Laguna Woods have implemented laws requiring developers to construct affordable homes in their housing projects.
That’s a little less than a third of the county that has instituted such rules.
Orange County’s median income is close to $128,000, according to the state’s Department of Housing and Community Development. A four-person household making less than roughly $115,000 a year is considered low income and less than nearly $72,000 is considered very low income.
About 10% of the county live in poverty, according to the census.
Costa Mesa’s Affordable Housing Mandate
Earlier this month, Costa Mesa recently voted unanimously to establish affordable housing requirements for projects with 50 homes or more – which came after hours of deliberation and public comments.
“Let’s get this done, make it effective now and look at ways that we can put additional support, whether it’s funding, staffing, whatever we need, to get the rezoning done as quickly as possible,” said Councilwoman Reynolds, who vouched for streamlining the process.
Councilman Jeffrey Harlan said the ordinance isn’t the only step the city should take to help address the housing crisis.
“I think there’s an idea that this ordinance is going to do so much. This is only one tool in the toolbox for the city. No city solves its housing problem, let alone affordable housing, with an inclusionary ordinance,” said Harlan.
The ordinance will also establish a $2.5 million housing trust to build affordable housing. The proposed in-lieu fee was pushed back for further studying at a later meeting.
Measure K, which was adopted by Costa Mesa voters in 2022, preserves single family neighborhoods, removes hurdles for houses being built for middle class families and seniors and would require more developer fees.
According to the Measure K website, “Approximately 50 percent of renters and one third of homeowners spend more than 30% of their income on housing.”
The majority of public speakers on April 2 were in favor of the housing, but urged council to increase the affordability requirement to 15% low income or 10% very low income, as said by Kathy Esfahani on behalf of Costa Mesa Affordable Housing Coalition.
Mayor John Stephens said he’s worried that the 15% and 10% was “too aggressive” and voiced that it might put them back into where Measure Y left off.
Measure Y, which ultimately left the city out of mandated housing compliance with state officials, allowed voters to approve developmental projects.
Harlan said the affordable housing mandate could backfire.
“Honestly, the developers are just not here right now. And what’s being proposed is not going to create an environment where we incentivize that development to happen. Without any kind of rezoning no one wants to come here. That’s a really hard pill to swallow but that’s the truth,” Harlan said.
However, city staff said they’ve spoken to interested developers without rezoning taking place.
“I’ve heard privately from a few developers that they could certainly live with the 15 and 10 and they’re signing up for it in Santa Ana. And frankly, I would rather be in Costa Mesa than Santa Ana any day, so the idea that somehow the land in Costa Mesa is not desirable enough to continue attracting people is just something I don’t totally buy,” said Councilwoman Andrea Marr.
[Read: Costa Mesa to Require Affordable Homes in Residential Developments]
Anaheim Resists Mandating Affordable Homes
While Anaheim officials have long avoided adopting an inclusionary housing ordinance, they directed staff earlier this month to form a plan for a new local affordable housing trust fund.
That fund could potentially be used for rent assistance programs, affordable homeownership programs and eviction prevention programs.
[Read: Anaheim Looks to Create Housing Trust Fund]
Last week, city officials unanimously approved the planned expansion of the iconic Disneyland theme park as part of a 40-agreement that city officials and Disney representatives say will provide the $30 million for affordable housing.
“$30 million, would be the largest corporate contribution to affordable housing we’ve ever seen,” said City Spokesman Mike Lyster in an interview earlier this month. “The 30 million will help build about 500 units.”
Both city leaders and Disney representatives say the money can be leveraged to get even more funding from federal and state grants.
City staff say there are currently 4,572 affordable homes in Anaheim.
The city has a population of 344,461 and about 13% of them live in poverty, according to the census.
The same night city officials approved Disneyland’s expansion, a handful of residents criticized the city for not having an inclusionary housing ordinance.
“Due to the city’s lack of affordable housing mandate, developers purposely neglect to include low and very low income in the thousands of units that are currently under construction,” Mike Robbins, a resident and a founder of the people’s homeless task force, read a statement on behalf of his wife at the meeting.
“It’s time to stop farting around and start fighting for what’s right.”
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.
Gigi Gradillas is a Voice of OC intern. You can reach her at Gigi.Gradillas@gmail.com. Follow her on X @gigigradillas.
•••
Since you’ve made it this far,
You obviously care about local news and value good journalism. Help us become 100% reader funded with a tax deductible donation. For as little as $5 a month you can help us reach that goal.