CORRESPONDENCE- 75B_Received by Planning Commission

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With this ever-growing deficit, we need to have an honest conversation about Inclusionary Zoning Policies. 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, the study suggests that inclusionary housing polices can increase new housing costs by $22,000 to $44,000, with higher priced markets increasing by $100,000.1 Supporting these conclusions is a recent report from the Legislative Analyst's Office titled Perspectives on Helping Low -Income Californians Afford Housing. In this report, it states that "attempting to address the state's affordability challenges primarily through expansion of government programs likely would be impractical." Further, that "extending housing assistance to low-income Californians who currently do not receive it — either though subsidies for affordable units or housing vouchers — would require an annual funding commitment in the low tens of billions of dollars. As such, it finds that "many housing programs — vouchers, rent control, and inclusionary housing — attempt to make housing more affordable without increasing the overall gMply of housing. This approach does very little to address the underlying cause of California's high housing costs: a housing shortage." The fact of the matter is seemingly clear in the City of Santa Ana. At the June 2, 2020 City Council meeting, city staff stated that during the period of 2016 — 2019, the time period immediately following the 2015 increase of the HOO fee, 2900 units were approved by the City, yet not one permit has been pulled to trigger paying the higher fee. To make matters worse, the entire globe has been thrust into the middle of a pandemic. Residents around the Country, especially in California, are being asked to self -quarantine and by extension, limit their access to work. The economic impact of this pandemic will take years to fully comprehend. Yet contained in the staff report, city staff paint a stark picture to this effect, detailing not just the delays in development activity on approved projects, but the overall damage to housing construction and how it may harm Santa Ana's local economy. That is why we are asking that "Entitled Residential Projects" be treated like any other planned or proposed residential project, and also be given the option of the staff proposed $5.00 per square foot in -lieu fee. Residential projects that have been approved by the city have most likely spent years in the entitlement process, spending significant capital in the hopes of building in the City of Santa Ana. If a proposed incentive based economic stimulus policy is to encourage much needed housing units, we can't think of a reason why a higher in -lieu fee would be proposed for those projects so close to construction. Furthermore, as stated in the staff report, significant delays are being felt not just in the City planning departments, but in the private sector and development community. It is for this reason, 1 Powell, Benjamin, Ph.D. and Stringham, Edward, Ph.D. Housing Supply and Affordability: Do Affordable Housing Mandates Work? Reason Public Policy Institute. April 2004.