HomeMy WebLinkAbout1 - PUBLIC COMMENT_LaMotte
Chairman Mark McLoughlin
Santa Ana Planning Commission
20 Civic Center Plaza
Santa Ana, CA 92701
Re: Item #1 - AN ORDINANCE OF THE CITY OF SANTA ANA AMENDING
CHAPTER 41, ARTICLE XVIII.I (HOUSING OPPORTUNITY ORDINANCE) OF THE
SANTA ANA MUNICIPAL CODE TO MODIFY APPLICABILITY AND VARIOUS
IMPLEMENTATION PROVISIONS OF THE ORDINANCE
Dear Chair McLoughlin and Commissioners:
On behalf of a coalition of business and property rights organizations, we respectfully request
revisions to certain sections of Zoning Ordinance Amendment NO. 2020-03, an update to the
Housing Opportunity Ordinance (HOO). Specifically, we ask that an “Entitled Residential
Project” of 20 units or more receive an in-lieu fee option of $5.00 per habitual square foot
compared to the proposed $10.00. Additionally, that said “Entitled Residential Projects” be
given 12 Months to be eligible for the $5.00 in-lieu fee, compared to the proposed April 2021
deadline.
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.
August 3, 2020
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 supply 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.
that we ask those “Approved Residential Projects” receive 12 Months from the implementation
of this policy to be eligible for the proposed $5.00 in-lieu fee. This is a slight change from the
proposed deadline of April 2021, and if building permits are not pulled within this year time
frame, the higher $15.00 in-lieu will be paid – offering a strong incentive to pull permits and
start construction.
We want to thank city staff for the proactive and business minded proposed amendments to the
Housing Opportunity Ordinance. The logic and reasoning behind the proposed lowering of the
fee is exactly what the development community needs during these rare and uncertain times. We
also feel that this proposal and our requests equate to a reasonable compromise between the
current fee and the recently discussed moratorium of the HOO fee. These changes will ensure
that construction moves forward and affordable housing dollars that were otherwise not
materializing, will be paid to the city.
Thank you for your thoughtful consideration
Respectfully,