Costa Mesa City Council members are continuing their efforts to spur affordable housing development in the city after officials mandated such homes get built in larger developments earlier this year.
Now, officials are rolling out an in-lieu fee on developments – money paid by developers for not building affordable housing.
City council members set the flat fee to $10 per square foot for developments of 50 or more units, which is expected to spur affordable home building elsewhere.
“The city could potentially receive revenue from payment of fees that would be deposited into a housing trust fund,” according to a staff report.
At the Aug. 6 meeting, Councilman Manuel Chavez, the only renter on the council, said residents regularly contact him after being evicted.
“Affordable housing is housing people can afford,” said Chavez, who represents a district that has a host of apartment complexes.
The fee proposal passed 4-3 with Councilmembers Andrea Marr, Arlis Reynolds and Loren Gameros voting against it at the Aug. 6 council meeting.
Gameros said the fee threshold should be stricter at 20 units to spur more housing development.
Marr wanted to stick with the staff recommendation of a nearly $20 fee per square foot on larger developments and lower the unit threshold to 30 before the fees kick in.
“I have been befuddled by this council’s decisions,” Marr said. “If you care about this, you pass it and support it.”
Councilman Jeffrey Harlan, who supported the in-lieu fee, cautioned his colleagues of overregulating housing developments.
“We’re relying on people to make the right choice and come here. I’m deeply concerned that if we go too far in regulating, and we’ve seen that before, that the two Costa Mesa’s that we’re talking about is going to widen significantly,” Councilman Jeffrey Harlan said.
According to the Costa Mesa housing plan, about 60% of residents rent their housing.
It also found that “approximately 48.8% of renters and 31.8% of homeowners are estimated to spend more than 30% of their income on housing.”
Chavez said officials need to keep housing developments as a top priority.
“My big focus in Costa Mesa as a young person, as the only renter in the dais, is that we actually build more rental housing and more housing in general. Renters have been hurt the most with the lack of building. Folks that have mortgages have set rates, renters do not,” he said.
In comparison, other Orange County cities have rolled out heftier in-lieu fees.
According to a staff report, Huntington Beach charges $35.80 per square foot for 30 to 100 units.
For 20 or more units in Santa Ana the fee is $15 per square foot.
Mission Viejo differentiated the fees for renters at $41.90 per square foot and ownership at $58.20. However they require developments of more than 20 units to be built on-site.
Costa Mesa’s housing conversation has been ongoing since January.
In April, council members unanimously voted to require affordable housing for units of 50 or more.
[Read: Another Orange County City Mandates Affordable Housing]
The mandate also created a $2.5 million housing trust.
The council decided at the Aug. 6 meeting to bring back that discussion to solidify where the in-lieu fee funds will go.
City Attorney Kim Barlow said the item could come back so the council could delegate how much of the housing trust fund would go toward first-time home buyers.
Officials are also expected to reconsider the in-lieu fee every two years.
Councilman Harper, who said he voted for the housing mandate in April with some hesitation, told his colleagues the in-lieu fee would not necessarily increase housing.
“This is a development agreement process, not a housing process,” Harper said.
“I want there to be production, housing, places that people can live and live affordably in Costa Mesa. I think we all do,” said Mayor John Stephens.
Gigi Gradillas is a Voice of OC Tracy Wood Reporting Fellow. Contact her at gigi.gradillas@gmail.com or on Twitter @gigigradillas.
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