Costa Mesa officials are moving forward with a plan to create a mixed-use housing development to aid small business owners.
It comes as cities across California are beginning to file their annual housing reports to Sacramento officials, detailing how many homes municipalities have developed.
Costa Mesa’s incoming development also hits against the backdrop of lofty state housing mandates, which call for cities throughout the Golden State to zone for a certain number of homes to be developed with a heavy focus on affordable units for low-income residents.
The city’s Planning Commission unanimously approved plans for a 38-unit live-work housing development at the Feb. 10 meeting.
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Mixed-use residential projects have been increasing in popularity throughout the county, which Commissioner Robert Dickson attributed to post-pandemic work conditions.
In comparison to a typical mixed-use project, live-work developments are designed to accommodate small businesses by providing space in the home for owners to work out of.
Dickson said these types of developments can keep tax revenue local.
“Instead of people commuting to work, they’re staying home and working,” Dickson said at the meeting. “Which means they go to lunch in the area, or they get their dry cleaning in the area or they start connecting with people in the area.”
The plans to develop this mixed-use residential building were first proposed to the city council at a meeting in June 2024.
Council members encouraged the project, asking that the applicant, Intracorp Homes, make a few alterations in terms of increasing the size of the workspaces and making design changes to benefit pedestrians.
“I’ve always struggled with the fact that there’s this live-work component, but the work component seems to get smaller and smaller with each project,” Councilmember Jeff Harlan said at last June’s council meeting. “So it essentially just becomes a home office or a study.”
After making the recommended alterations to the plans, the developers presented the updated project to the city’s Planning Commission at a meeting on Feb. 10.
“This is the mechanism for both creating housing opportunities and creating increased residential vitality and industrial area, which was the purpose of these overlay plans in the first place,” Dickson said.
Planning Commissioner Jon Zich said he was on board with the project for many reasons. He told Intracorp Homes representative Rick Puffer that he was “very happy” that the project is aimed at ownership rather than a rental building.
That means that the spaces will be for sale rather than for rent, unlike most mixed-use developments.
“Our city, Costa Mesa, is so out of whack with renter versus ownership compared to the rest of the country,” Zich said. “It’s a major grievance I have, and so I’m thrilled when there’s an ownership project that comes along and not another high-density apartment complex.”
The project is also meant to work towards the city’s state-mandated housing goals, also known as the city’s Regional Housing Needs Assessment (RHNA), according to the agenda report.
The city’s RHNA allocation for 2021-2029 requires Costa Mesa to plan for 11,760 housing units, the most in the city’s history, according to an agenda report.
This isn’t an expectation unique to Costa Mesa, or even Orange County — the entire state of California has been struggling with housing affordability and shortages for years, and many cities are facing high numbers of affordability needs.
[Read: California’s Housing Mandates: One Size Fits All? It Depends Who You Ask]
However, there is no affordable housing proposed in the project.
According to Chris Yeager, the project planner, this is because the project does not fall under the city’s affordable housing ordinance, which doesn’t require affordable units in ownership-based developments or developments under 50 units.
“This project has no affordable housing,” resident Cynthia McDonald said at the June 2024 council meeting. “Only luxury housing, and that’s because our IHO (Inclusionary Housing Ordinance) does not consider that we need affordable home ownership, and it’s also not going to help us satisfy our RHNA.”
Cesar Covarrubias, secretary of Jamboree Housing Corporation’s Board of Directors, spoke about the need for more inclusionary housing and how market-rate projects like this one don’t contribute to solving the affordable housing issue.
“We feel that (the project) is, unfortunately, a big miss, because every development should contribute to addressing the housing needs of all income segments, and not just continue to build market-rate housing,” Covarrubias said in an interview.
The live-work complex will be located in the Mesa West Bluffs area.
The buildings are slated to have four floors each: a workspace and garage on the first floor, a kitchen and living room on the second, three bedrooms and two bathrooms on the third floor and a partially covered roof deck.
It will also feature community spaces, complete with landscaping, decorative outdoor lighting and seating spots. As for parking, each unit will have a two-car garage, and residents or guests will also be able to park along the adjoining street and in a visitor parking lot.
Jay Humphrey, a Costa Mesa resident and former city council member, supported the project overall but voiced concerns regarding the density of the units and potential fire risks.
“As long as it’s taken all the proper conditions, I’m okay with it,” Humphrey said at the Feb. 10 Planning Commission meeting.
He also supported the ownership policy of the houses, but expressed worry about the buildings being rented out, potentially bringing in more cars than accounted for.
Another resident voiced concerns about parking as well as ensuring that these spaces are occupied by business owners.
“Live-work is a loophole,” the speaker said. “And it’s a loophole that allows developers to get higher density. The thing that I’ve always been curious about in this city, and I haven’t really followed up on this, is how many of these live-work residences actually have businesses?”
Commissioner Dickson said 75% of the live-work spaces in the city are being used for their designated purpose.
This project is not the first example of live-work housing in Costa Mesa. The Lighthouse housing development was cited many times during the February planning commission meeting as a similar concept that’s been done in the city.
Following the Planning Commission’s approval, the city will move forward in a partnership with Intracorp Homes to develop the building. This approval includes the demolition of the existing industrial space and a change in land zoning from business to mixed-use residential.
“It’s important to bring life and vitality into these areas,” Dickson said. “I think that, in 2006 and 2016, we didn’t know the pandemic was coming and we didn’t know that work was going to completely change. We were trying to incentivize people to do what they’re doing right now.”