The commissioners of Costa Mesa, California have agreed to a new affordable housing law.
The city of Irvine, also in Orange County, passed one more than two decades ago. And nearby Santa Ana is a serious supporter of affordability.
Now, Costa Mesa is trying to follow suit. Friction is inevitable. Regulating for affordability means pitting fair housing advocates against developers who aren’t fans of local rules and restrictions.
Who will win out?
Commissioners Approved an “Inclusionary Housing Ordinance” But Developers Got Wiggle Room
Costa Mesa’s new affordable housing ordinance (the “inclusionary housing requirement”) directs developers to set aside a percentage of the homes it builds so residents with modest incomes can afford them. But is the ordinance up to the challenge?
After all, Costa Mesa has a big problem to solve.
The state has directed Costa Mesa to plan some 4,800 affordable housing units for households with low or very low earnings. This would help to relieve a known need for some 29% of Costa Mesa’s current residents.
“Based on housing prices,” the city itself observes, “lower income households cannot afford to own or rent in Costa Mesa without experiencing overpayment.”
The new rule, as it was first drafted, was meant for builders creating 10 or more units. They would need to include 10% to 15% affordable homes (with exceptions for certain condo properties). The ordinance drafters took care not to unduly restrict the smaller real estate investors. They included a sliding scale to apply to developments of all sizes. The more units, the bigger the percentage that must be affordable.
Seem reasonable?
Not everyone thought so. Some developers bristled at the proposed language. Vocal opponents included the Orange County chapter of the Building Industry Association of Southern California.
So the commissioners decided to shoot for a compromise between the opponents of rezoning, and those who want a lot more affordable homes, and want them now.
City leaders hotly debated the best way to set up the rules, and the debates continue. At least they did commit to rezoning some residential areas as high-density.
Not surprisingly, though, the Costa Mesa council members are not holding out for the strongest possible ordinance.
Voters Have Spoken: Costa Mesa Needs Affordability, Now
Of the entire U.S. homeless population, about half live in California. More than 180,000 California residents are counted as unsheltered.
Many more Californians are renting and struggling hard to find homeownership options.
Costa Mesa residents have spoken out on behalf of fairer access to housing for minorities and working people for years. Latino health workers stand out as leaders. They have made it clear to Costa Mesa that bringing down housing costs is a priority.
New, affordable units were recently planned for One Metro West — a step forward.
But in 2022, the City Council declared that a serious approach to expanding affordability could only happen if voters would approve Measure K. That ballot measure would allow the city to regulate developers.
So, voters in Costa Mesa voted for Measure K. Imagine their disappointment when the council agreed to water down the ordinance!
Now, the rule’s language only mandates that 4-6% of the builders’ new units be affordable. And fewer developers are now subject to the restrictions.
The Costa Mesa City Council is still working through the public hearing and adoption process. Once that’s done, the law will become official 30 days after adoption. (The city outlines its hearing timeline here.)
Why the Resistance to California’s Affordability Measures?
Developers around the state are throwing legal objections into the works as cities strive to boost fair access to housing. In some cities, the law and policy makers side with the developers.
Developers are out to make as much profit as possible. When they work in Costa Mesa, they will be able to pay certain fees to pursue their objectives. They’ll be allowed to make land swaps to get around the inclusivity rules, too. Will affordable housing ever be built where developers can sell luxury units? Where accessible housing is missing, economic segregation persists.
The leaders of Huntington Beach, a suburb of Los Angeles, have shown dramatic resistance to California’s housing directives. The city leaders don’t want outside interference in their zoning and planning decisions.
So far, Huntington Beach hasn’t managed to override the state’s lawmakers. Yet attorneys for the city continue to face off against the state’s attorney general and governor, and California’s housing department.
The district court told Huntington Beach that the city lacks standing to fight the state’s rules in federal court. But the city has managed to get its case into the Ninth Circuit Court of Appeals.
Creative Response: Project Homekey
Separate from Costa Mesa’s proposed Affordable/Inclusionary Housing Ordinance, leaders are making affordable housing out of Orange County motels, under Project Homekey. This statewide initiative has now used up most of its $3.5 billion in funding.
The California governor wants the initiative to continue. Gavin Newsom talks up the progress in converting hotels and commercial sites, creating thousands of new homes for veterans and others since Project Homekey got its start in the throes of the Covid pandemic. Newsom is asking residents to vote for Proposition 1 this March. Proposition 1 would inject $2 billion into Homekey. Newsom explains:
We’ve never invested with the kind of intentionality to address the crisis that persists, not just here in Orange County, but throughout the state of California, and increasingly all across the United States.
So far, California has gone to work on 15,009 commercial-to-housing conversions. Nine thousand of those new homes are finished.
Newsom has also mentioned a conversion project coming up in San Bernardino County. The number of unhoused people in San Bernardino County is more than 4,000. In Orange County, it’s closer to 6,000.
California is showing that commercial-to-residential conversions can be cost-effective. They’re being done for less than the cost of new construction. We look forward to similar success stories, as the governor says, throughout the USA.
Supporting References
Sara Cardine, in the [Orange County] Daily Pilot via LATimes.com: Costa Mesa, CA Goes High-Density – Costa Mesa Commissioners Approve Affordable Housing Law, Next Stop City Council (Dec. 14, 2023).
Opinion piece Priscilla Rocco, in the [Orange County] Daily Pilot via LATimes.com: Mailbag – Costa Mesa Dials Back Its Affordable Housing Plans (Jan. 18, 2024).
Michael Slaten, for The Orange County Register via OCRegister.com: Housing Conversion Program, Homekey, Has Been a Success, Needs More Funding (Jan. 18, 2024; published by MediaNews Group, Inc. and distributed by Tribune Content Agency, LLC; citing figures from the U.S. Department of Housing and Urban Development).
Hosam Elattar for Voice of OC: Costa Mesa to Require Affordable Homes in Residential Developments (Jan. 18, 2024).
Noah Biesiada for Voice of OC: Housing & Homelessness – Huntington Beach Reignites Fight Against State Housing Law (Jan. 11, 2024)
Hosam Elattar for Voice of OC: Surf City Cans Housing Plan, Sets Up Another Legal Fight With Sacramento (updated Apr. 7, 2023).
The Real Deal, a registered Trademark of Korangy Publishing Inc. (New York, NY): Court Sustains State Lawsuit Against Huntington Beach Over Housing (Jan. 22, 2024).
And as linked.
More on topics: Office-to-home conversions, Accessory dwelling units (ADUs)
Photo credits: Nandaro, CC-BY SA 3.0 unported (Wikimedia Commons); and Costa Mesa, CA (public domain).