Anaheim officials may soon require developers to build affordable homes in their residential construction projects or pay a fee to help create housing for low income families.
City council members have long avoided such mandates – called inclusionary housing laws – in a town where about half the population is on a public health plan.
The proposal also comes after independent investigators alleged developer favoritism at city hall in a corruption probe report last year.
[Read: Will Anaheim Force Developers to Build Affordable Homes?]
But at a Sept. 10 workshop, a majority of council members voiced support for city staff to bring back a proposed inclusionary housing ordinance for a vote and further deliberation on what requirements it may entail for developers.
Mayor Ashleigh Aitken, who called for the workshop, said the time for such a policy was past due in Anaheim.
“We’ve heard that creating more affordable housing is a goal for Anaheim. Our residents come here every two weeks and demand it,” she said.
“We’ve heard from our development community that they want to be treated the same as everybody else,” Aitken continued. “This is one vehicle that really helps us do that.”
Her comments came as some residents have called on officials to enact a rent control law and as Anaheim struggles to increase their affordable housing stock.
Councilmembers Natalie Meeks and Jose Diaz spoke out against inclusionary housing ordinances and in lieu fees, calling them a burden on the middle class.
“Housing prices are high for everybody, and the middle class isn’t getting housing assistance. They’re having to pay their full fair market value, and these fees just increase that market value for those middle class families,” Meeks said. “It’s unfair to them.”
She instead suggested the city revisit its affordable housing standards, look for ways to lower the cost to build units and encourage businesses to donate to their local housing trust.
Diaz said increasing fees on developers will slow down housing production.
“If the goal is to slow down and prevent large housing projects from happening in the city, then we implement something called inclusionary housing,” he said.
“What we need to do is decrease regulations. What we need to do is incentivize the private sector to build more housing, not to make it more difficult for them.”
Councilman Carlos Leon disagreed with Meeks and Leon, arguing such an ordinance would make it easier for developers to understand what is expected and required of them.
“Instead of delaying projects or pushing developers away, I think in lieu fees and this kind of approach of a policy provides an option that speeds up the approval process, because developers know exactly what it is that they’re getting into,” he said.
Councilwoman Natalie Rubalcava said at last week’s meeting that they should keep the proposed ordinance simple and suggested the ordinance apply to the development of rental properties with 50 or more homes and charging an in lieu fee at $5 per square foot.
Between 2018-2023, over 5,100 homes were built in Anaheim – of which 92% were for above moderate income families, 4% for very low income families and about 2% were for low income families, according to a state database.
Orange County’s median income for a four-person household is close to $128,000, roughly 13,000 above what’s considered low income, according to the state’s Department of Housing and Community Development.
A four-person household making less than $72,000 a year is considered very low income.
On the same night of the meeting, officials also held a discussion about what role they should play in enforcing state rent caps and tenant protections.
[Read: Who Should Enforce State Rent Caps and Tenant Protections in Anaheim?]
Do Affordable Housing Mandates Work?
Some council members in Anaheim are not the only ones arguing that inclusionary housing laws prevent the construction of new homes and questioning how effective such laws are in creating low income housing.
Local real estate interests like the Building Industry Association of Southern California OC chapter say mandates like these create more hurdles to producing housings
“There’s a way to go about this. Inclusionary – there’s no doubt that it stops projects from going forward. It is another burden, another hurdle to get over. It is a huge detriment to a for sale product,” said Adam Wood, vice president of the Association, at last week’s workshop.
Wood said however charging an in lieu fee as opposed to requiring developers build affordable homes in the projects was a better approach.
Housing advocates like Cesar Covarrubias, executive director of the Kennedy Commission, say inclusionary housing mandates have been successful in cities like Santa Ana and Irvine while not slowing market rate development.
Covarrubias said in a Thursday phone call that an inclusionary housing ordinance would boost the production of affordable housing in Anaheim.
“The only places you’re getting affordable housing along with market rate housing is in cities where they have such a policy or a program,” he said. “The argument that an inclusionary housing ordinance is going to stop development or impact development is just not true.”
He added that inclusionary policies create more of a balance in housing production.
“In those cities, we are seeing that development is not stifled, it’s just more balanced. There’s housing development at the market rate and also on the affordable side,” Covarrubias said.
A Voice of OC investigation earlier this year found Santa Ana – a city with an inclusionary housing law – built the most affordable homes for low-income families in the past five years.
It also found that for the most part developers constructed homes for above moderate income families even cities with inclusionary housing laws.
[Read: Are Affordable Housing Mandates Working in Orange County?]
Anaheim city staff said it’s impossible to determine if inclusionary housing mandates have worked in other cities because there are many other development factors like interest rates that impact housing production.
Editor’s note: Ashleigh Aitken’s father, Wylie Aitken, chairs Voice of OC’s board of directors.
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
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