New housing projects in Costa Mesa could be required to include affordable housing

Costa Mesa leaders are considering requiring new housing developments to include affordable units or at least help the city fund future projects.

The city’s planning commissioners have been reviewing the final recommendations pulled together by the city’s staff and consultants. This week, they sent them along to the City Council, though their endorsement was less than full-throated support.

The idea of creating an “inclusionary housing ordinance” that sets affordable housing requirements was baked into the city’s latest housing element, which is a planning document required by the state, and is supported by state housing officials, City Hall staffers said.

The affordable housing requirements are proposed for specific corridors in the city, mainly commercial and industrial areas where housing may be introduced in the future – mostly along the north side of the 405 and sections of Harbor Boulevard, Newport Beach Boulevard, Bristol Street and 19th Street.

In those corridors are locations city officials have already identified as good options for housing to help the city meet needs and where they are creating the allowed density and incentives to encourage housing developments, Nancy Huynh, a principal planner with the city’s economic development office, said.

Commissioner Angely Andrade Vallarta raised concerns that it could seem like the city is “red-lining districts” by just requiring affordable housing in future projects in the corridor areas, “like we are pushing people out to the edges.” She said it would be “great to see some incentive” to include affordable housing in residential areas.

“The intention here is never to limit affordable housing; you can have affordable housing anywhere that is zoned for residential development,” said Economic and Development Services Director Jennifer Le, adding there are other state incentives for encouraging development in residential areas.

“The idea here is to rezone property at a higher density and ultimately incentivize development, and then as part of that incentive to get something back in terms of affordable housing for the community,” said Le. “So it is required for these areas, but can happen anywhere.”

Of the options for thresholds, the Planning Commission is recommending for rental projects proposing to build 60 units per acre or more that either 10% be required to be affordable for households considered low-income or 5% be affordable to very low-income households.

For smaller projects, the requirement would be either 6% at the lower-income level or at least 4% at the very low-income level.

Any project proposing fewer than 10 units would not face requirements.

For ownership projects, proposed options are paying “in-lieu fees” into an affordable housing trust fund Costa Mesa would for housing and programs around the city or being allowed to build requisite affordable units off-site. Irvine and Huntington Beach have similar housing funds.

The City Council and Planning Commission have met jointly a couple of times, researching the idea of adding on a requirement and learning about the financial implications, the way thresholds could work and implications there could be for development. There have also been community input opportunities, officials said.

At this week’s Planning Commission meeting, there were still issues raised by various groups in the housing community, including whether opportunities would be created for renting or ownership at the detriment to the other.

More than one commissioner mentioned they hoped the meeting minutes would be detailed enough to reflect their varied concerns or, even better, councilmembers would watch the video of their conversation surrounding the recommendation being forwarded by the split commission.

Several commissioners said they would have liked to see more aggressive requirements, but staffers said their concern and reason for recommending more conservative thresholds was they didn’t want to create a constraint on housing that would limit development.

Commissioner Jon Zich said he felt more work needed to be done on the proposal before it was sent to the council. He also was concerned that “we are trading high density for affordable housing.”

“The people who are most involved in this are saying on the one hand, I don’t think this ordinance is ready to go; on the other hand, I think these percentages are way too low; on the other hand, people are saying it is a disincentive for the production of housing,” he said. ” Yet we are pushing forward with it. Why? Because our neighbors have it? This thing isn’t ready.”

Adam Ereth, the commission’s chair, said there are councilmembers who have been very interested in adding affordable housing requirements and the work the commission has done gives them information to weigh in considering the issue.

“There is always going to be someone who doesn’t like something,” he added.

The City Council is expected to take a look at the proposed new affordable housing ordinance in early 2024.