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Building Industry Association of Southern California, Inc ORANGE COUNTY CHAPTER August 21, 2018 Mayor Miguel Pulido City of Santa Ana 22 Civic Center Plaza Santa Ana, CA 92702 Re: Item 80A — Inclusionary Zoning Study Contract Dear Mayor Pulido, The Building Industry Association of Southern California, Orange County Chapter (BIA/OC) is a non-profit trade association of over 1,100 member companies employing over 100,000 people in the home building industry. On behalf of our industry, we write to express our concerns with Item 80A. Housing remains a critical issue in California with the situation growing more serious with each passing day. Studies show that the State needs over 180,000 new units each year and at best we are producing 80,000. This has caused a cascading spike in home prices across the region. With this ever-growing deficit, it is essential that cities work with home builders to do everything in their power to increase the supply of housing. In light of that, we need to have an honest conversation about Inclusionary Zoning. In total, such policies restrain housing production, increase ownership costs and further complicate attainability for the majority of the region. In a study by Benjamin Powell, Ph.D. and Edward Stringham, Ph.D., titled, Housing Supply and Affordability: Do Affordable Housing Mandates Work?, the authors discovered that in the 45 cities where data was available, new housing production drastically decreased by an average of 31% within one year of adopting inclusionary housing policies. Additionally, a recent report from the Legislative Analyst's Office titled Perspectives on Helping Low -Income Californians Afford Housing states that attempting "to make housing more affordable without increasing the overall supply of housing.., does very little to address the underlying cause of California's high housing costs: a housing shortage." Next consider the results from the City of Portland's "Review of Inclusionary Housing Zoning Code Program" stating that "the rate of filing new applications is significantly slower compared to other years," and that "this slow down coincides with the new [Inclusionary Zoning] requirements and market factors..." PRESIDENT MIKE GARTLAN KB HOME VICE PRESIDENT RICK WOOD TRI POINTE HOMES TREASURER/SECRETARY SUNTI KUMJIM MBK HOMES IMMEDIATE PAST PRESIDENT PHIL BODEM MERITAGE HOMES TRADE CONTRACTOR V.P. ALAN BOUDREAU BOUDREAU PIPELINE CORPORATION ASSOCIATE VICE PRESIDENT MARK HIMMELSTEIN NEWMEYER & DILLION, LLP MEMBER -AT -LARGE PETERVANEK FOREMOST COMPANIES MEMBER -AT -LARGE SEAN MATSLER MANATT, PHELPS & PHILLIPS, LLP EXECUTIVE OFFICER STEVE LA MOTTE