HomeMy WebLinkAboutDraft Policies for Affordable Housing - 1986 dt
REQUES`e FOR CITY COUNCIL ACTION rt..j- �►��
Date August 4, 1986
SobrAittedto: Honorable Mayor and City Council
Submitted by: Charles W. Thompson, City Administrato / .
I I
ve
Prepared by: James W. Palin, Director, Development Services Lr
Subject: DRAFT POLICIES FOR AFFORDABLE HOUSING
Ccnsistent with Council Policy? [ j Yas rA New Policy or Exception A L �►t i'�i+G. ..
Statement of issue, Recommendation,Analysis, Funding Source,Alternative Actions,Attachments:
STATEMENT OF ISSUE.-
on J he. 1601-'_119860 the Planning 'Commission held a study. session on
the_:;'draft,'affordable .housing policies that were developed by the
Housinfg`.Committee in -January of this year. A public bearing on. the
housing policies was, held on June. 17, 1986, after which the planning
Commission took a straw vote on each of the draft policies and
-revised. some of them.
As the�.Comnlissi'on` requested, copies of the revised policies .were
`distributred to, interested parties.. and . their comments were requested
6y 'July 15. No comments were received. On July 16, 1986,- the
. 'Commission tadoptdId the housing .policies as amended, (Resolution
1354 ) and recommended them .to City Council for approval.
Both the January,, 1986 Housing Committee policies (Alternative 1) .
and the revised Planning Commission amended policies (Alternative 2)
are attached for City Council considerat-ion.
RECOMMENDATION«
Planning Commission recommendation: Aswum
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ON` MOTION BY SCHUMACHER AND SECOND BY ROWE, THE PLANNING COMMISSION
ADOPTED RESOLUTION 1354 APPROVING THE DRAFT. APFORDABLE HOUSIIIG
POLICIES AS REVISED AND RECOMMENDING THEM TO THE CITY COUNCIL FOR
ADOPTION, BY THE FOLLOWING VOTE:
AYES: Rowe, Schumacher, Livengood, Porter, Mirjahangir
NOES: Erskine
ABSENT: Winchell
ABSTAIN: None
Staff and Housing Committee recommendation:
Staff recommends that City Council adopt the affordable housing
policies as outlined in Alternative 1.
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ANALYSIS: 1
3 Affordable housing and ensuring thut .it is provided is an important
issue in the City. At present, riegotiating the_ provisiort of,
affordable housing from new development is handled `on a case by case
basis, sometimes within departments other than planning. This
method is inefficient and could lead to inconsistent decision making.
Sin'ee .1982, the: Housing Committee and Planning Commission. have
considered various housing .poli•cies in an effort to establish
unifoim.quidelines and requirements that''wili. facilitate the
achievement of the City's housing program goals. As a result of,.
those :.Pfforts, two viable sets of affordable housing policies were
developed. One set of policies was devised by the Housing Committee
(Alternative 1) , and the other set (Alternative 2) , which was
adopted by the. Planning Commission, is a modified/revised version of
the Housing Committee recommendation.
The policies contained in� Alternative l. Are_ more specific and .E
somewhat more stringent than those in Alternative 2. The
differences between the two alternatives are outlined below.
1. Alternative l addresses 'development within the 'Coastal '''.
zone
if City assistance was received then 20' peicent,.of the project
shill%be affordable housing. If no assistance Was received
the:t 10 .percent ;is required. This is in accordance with State
law which requilres affordable housing .in new coastal
developments where feasible. Alternative 2 does not address
development within the Coastal zone.
2. With.,'regard to affordable `units that."are to be biu 11 t,
` . Alternative 1 requires • that 75 percent be for-low income
households and 25 percent be for moderate income households.
Horsing for very low income groups _is not requires].
Alternative 2 does not address the various income levels.
3. Alternative l requires that affordable requirements on rental
projects be recorded and observed for the term of the
requirement. Alternative 2 does not contain such a provision.
It. is sta�ff's'"opinion that the policies contained in Alternative l
better reinforce the goals and objectives of the City's .housing
program than those in Alternative 2. Therefore, the City Council j
should adopt the policies outlined in Alternative 1. . �
} F ITN: t:S SOURCE:
None needed.
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ALTERNATIVE ACTION:
1. Adopt Alternative 2.
2. Do not adopt either alternative.
ATTACHMENTS:
1. Alternative a - January 1986 Housing Committee Affordable
Housing Policies.
2. Alternative 2 - Resolution 1354, as amended and adopted by
Planning Commission.
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. Planning Commission (newest)
DRAFT POLICIES FOR AFFORDAALE HOUSING
The City of.-Huntington Beach has adopted three goals for its housing
pro ram which are consistent with State and Pegional housing
policies. These goals are:
1. The attainment of .:.decent housing within a satisfying living
environment for households of all socioeconomic, racial, and
ethnic groups in Huntington Beach.
2. The provisiun. of a variety of housing opportunities by type,
tenure, and cost for households of all sizes throughout the City.
3. The `deveaopment of a balanced residential environment with
access: to employment opportunities, community facilities, and
adequate services.
The -City Counoil believes the fallowing policies will assist in
attaining these goals:
1. When'°affordable units are built in the. City, the size 'and mix of
affordable units shall' be.'in.'the same proportion as the -rest of
' the project. . If 50% of the project consists of 2 bedroom units,
then. 50% of the affordable units shall be 2 bedroom.
2. P riojects. may be granted no mote than .•a 25% density bonus, except 's
for senior residential projects, which may be granted no more
than a 508 density bonus.
s. EaCh, affordable 6evelopment"46centive. or requirement, including
mortgage revenue, bond finencing, within a residential` project
shall provide its own affordable units which shall not be -
comingled with units for any other requirements or incentives.
4. HCD` shall annually review the distribution of,: affordable units
among income.:categories within the 'City by .comparing'existing
units to projected needs in the Housing Assistance' Plah and
shall set priorities for production of affordable units by
income category in the coming year.
5. Affordable criteria shall be revised annually in accordance with
the e
m dian household
1 income for. Orange County as defined by
HUD. The affordable criteria for 1986 are:
Alternative 2 `.
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INCOME AND AFFORDABLE HOUSING
PAYMENT LIMITS FOR $36,800 MEDIAN INCOME ;
t
30% MONTHLY 33% MONTHLY
ItiC'OME LEVEL RENT MORTGAGE
VERY LOW.-INCOME ?:
MAXIMUM $18,400 $ 459.00 505.00
LOW INCOME �
MAXIMUM $29,440 $ 735.00 809.00 1
MODERATE INCOME
MAXIMUM 44,160 $1,104 .00 $1,214.00
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Alternative 2
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Housing Committee ;
DRAFT POLICIES FOR AFFORDABLE HOUSING
The City of Huntington Beach has adopted three goals for its housing
program which are consistent with state and Regional housing
policies. These goals are:
1. The attainment of decent housing within a satisfying living.
environment for houselo?:ds" of all socioeconomic, racial, and
ethnic groups is Huntington Beach.
2. The provision, of a variety.'of housing opportunities by type,
tenure, and cost for households of all sizes throughout the City.
3. The development of, a .balanced. residential environment with
access -to employment opportunities, community facilities, and
adequate services.
The City, Council believes the following policies Will assist in
attaining these goals:
j. '.
l.' New de'velopment's in the coastal zone which,.have,received
_ assistance..from the'.City.>.in. the form of a:density: bonus, .
mort'a e • revenud` bond financin or :an g g g,. . y public funds ;shall
provide,..20% affordable_ units :either on or off, site' within' the
City* ' If; no assi'stance• has' been provided.�.by the. City, new
developments' in the coastal za;.e shall provide 10$ affordable
units either on or off site within the City.
2. When .affordable 'uhi.ts are built :'in.-the, City, '75% -of .the
affordable. units • shall be for low• income households and 251
shall be for moderate income households.
3. The •size and mix of affordable units shall be in- the same,
proportion as the. rest of the project. If 50% of the-project
consis, to of 2 bedroom units, then 50% of the affordable units
shall be 2 bedroom.
4. Projects. may be granted no more than a 25% density bonus, except
for senior residential projects, which may to granted no more
than a 50% density bonus.
5. Affordable requirements. on rental projects shall be recorded
with the County Recorder's office and shall run with the land
for the term of the requirement. Mortgage revenue bond
financing terms shall be handled as required by law.
Alternative 1
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6. Each affordable development incentive or requirement, including
mortgage revenue bond financing, within a residential p:oject
shall provide its own affordable units which shall not be
comingled with units for any other requirements or incentives.
7. HCn shall annually review the distribution of •affordabl'e units
among income categories within the City by comparing existing
units to projected needs in . the Housing Assistance Plan and
shall set priorities for production of affordable units by
income category in the coming year.
B. Affordable criteria shall be revised annually in accordance with
the median household income for Orange County as defined by
HUD. The affordable criteria for 1986 are:
INCOME AND AFFORDABLE HOUSING
PAYMENT LIMITS FOR $361800 MEDIAN INCOME
30% MONTHLY 338 MONTHLY
INCOME LEVEL RENT MORTGAGE
,VER7 ,LOW -,INCOME
MAXIMUM $18,400 459.00 505.00 ;
4,
LOW: INCOME
MAXIMUM $29'440 735.00 809.00
MODERATE INCOME
MAXIMUM '$44,160 $1,104 .00 t1,214.00
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Alternative 1
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• Huntingt6n Beach
Fquntain ' Talley
Board of REALTORS;xaic.
R E A LTC R' 8101 Slater Avenue + Huntington Beach, CA 92647 • (714) $47.6093
August 4, 1986
The Honorable Robert Mandic, Jr.
and Members of the City Council
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Honorable Councilmembers:
On behallf'-of the Huntington Beach/Fountain Valley. Board of REALTORS, I would
like, to express our support, with a couple •,of.recommended chainges, for the
Planning Commission's position, `presented as Alternative•2, with regard to
agenda -item H-3, Draft Policies for Affordable ousing.
Before I outline'.our recommended .changes, I would like to..state tha ,_.the.':% .
Planning. Commission's recommendation is the result of a lengthy public,,.process
between the Commissioit and many representatives of the business commuhit'?
who met at three' public hearings and a study session to discuss these issues.
The:original proposal considered by the Planning Commission' . at. all of. these
public hearings is before you. this evening as "Alternative 1"—the=.staff
recommendation. . . For:the',.record, we are, adamantly opposed to Alternative 1,
because it contains 'a requirement for: inclusionary zoning in,. the, Coastal Zone,
stipialatea a,.certain percentage of units for various lour income categories
i without justification of the need or consideration of. the. availability of low
Income housing in Ahc City, and imposes a. deed :restriction, - in addition to
other provisions which would have an adverse effect on the provision of
housing in our City.
Knowing the hours 1 personally have spent at ,these meetings, 1 must admit
I was a. little disappoint 1.ed when I received this agenda item since it did
not, in my view, adequately reflect the tremendous amount of time and. energy
which has 4 been given this
issue' since. i- first appeared on the Planning
Commission agenda on April 1 of this year.
In any case, as partial testimony to th^ Planning Commission's four
month effort, 1 have attached fur your information and review, copies of the
letters we sent to the Planning Commission with regard to this issue for. the
April 1 meeting, the May 6 public hearing; au1 the July 15 public hearing.
We also gave oral testimony at the June 16 study session and the June 17
public hearing .
OFFICERS
R.L."KtRK"KIRKLAND President•LILA NOWELL.First Vice President
JAN SH E •OMAK R,Second Vice Presi,'�ent/MLS Chairman BETH DUN M CQ 8E.Sacretary/Treasurer
DIRECTORS
KENT M.PIERCE+ LARRY GAGE• MAGGIE SHAFFER•JIM RIGHEIMER• FRANK C.HORZEWSKI
WILL WOODS,Executive Vice President+JUDITH SEVERY,Vice President/Public Affairs
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Huntington Beach Cityi.uuncil
August 4, 1986
Page 2
In .your agenda item this'.:evening, ,1-'..noted ,that the staff analysts indicated
that Alternative 2, the Planning Conimission"s recommendation, "did not ad--
dress'.'. several 'of .the provisions in the,original proposal. . Please be assured
that all,.-of 'the'.issues weriti'consi'dered by. the.'Planntng Commission and
addresseH at length through the public Rrocess.
As I have said, while:,we.,don't.-agree re with 'ever recommendation in Alterna-
ttve 2, it,certainly represents forward progress and is .a. much better proposal
than that 'which was originally considered by the Planning Commission, and,
I would like to commend them for the hours they were willing to spend, listen-
ing to public testimony z7d reviewing all of the information and letters which
were submitted.
Through,their .effor'ts, three or the most onerous and anti-homeowner provisions-
in Alternative .1,,--,:the inclusionary zoning• policy in the. Cogs:el Zone, :the •im-
position of, required ' percentages. of housing for each income, category, and
the deed'restriction, were removed., We.commend the t decision, and since
these items have been addressed and-deleted by the Planning:Commission-=and
since •that action is consistent. with the-'position adopted by the City. 64i cil
on February i8, 1933, 'we did not think. it necessary to comment specifically
on these three issues in this letter. (Our written comments to the Planning
Commission are in the attachments.)
As I stated earlier in 'this Ilefter,. w,: do still have some concerns with regard
to 'the Draft Policies for affordable Housing in Alternative 2. They are as
' follows:
(1) The:.most serious concern we have is' with regard to Policy. 3, which
'r provides for.. a-'cumulative`''rcquirement for low. Income..units when: a
builder: is gr'a'nted .a, deRfty bonus, or, the use of mortgage: revenue
bond financing: Instead of absorbing .a smaller number of 164.1ncome
units into multi-family" complexes and distributing them throughout the
city, this will. have, the effect of concentrating a higher percentage of
low. income units into each -omplex, which could create -a low-income_
"Pocket." We do not think this would he, beneficial to"the city as: a
whole._A To our knowledge, no other city has this requirement. Instead
of "limiting the incentives offered to builders, we believe the City, should
be encouraging construction by making Huntington Beacn a more attrac-
tive place to .build. The use or density bonuses and mortgage bond. .
financing should not be used to cancel "one another out--rather, to:•facilt
tote the private market construction of affordable:housing. Other methods
the City should explore could include fast track processing'.,of develop-
ment requests, shorter project review periods, lower. development fees,
and the encouragement of innovative design and construction techniques.
(2) Secondly, we are concerned with Policy 1. We do not believe it is
reasonable to expect affordable.units, when they are .included in a pro-
ject, to be of the same size and mix as the rest of the project. Th:s
means that the owners of the ttiarket rate property are subsidizing the
rest. We believe that affordable housing could be smaller or in a _
less desirable location and still be habitable. Almost all housing
projects have less desirable locations which are usually less expensive.
All of us have seen advertisements for developments that have a
"premium" for a better location, a larger lot, or bigger living quarters. .
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Huntington Beach City Council
August 4, 1986
Page 3
(3) Lastly, we are concerned that 'Pclicy 2 would lock in a specific density
bonus to be allowed.,. We believe; that the City would be better'-.served
if, you..maintained. your own flexibility, to,make decisions. regarding: the
maximum density lijriiis allowed for regular or senior residential projects.
To .place a maximum in the policy limits your ability to `consider. an
Innovative 'approach or better design which may be presented in the
future.
We urge. your support of the Planning Commission's proposal with these
recommended changes. We appreciate the opportunity to provide our comments
on this important issue, and thank you for your consideration.
Sincerely,
R.L. "Kirk" Kirkland
Board President
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' - Huntington. Beach
Fountain Valley
Board of REALTORS Inc.
ii E A LTQ R' 8101 Slater Avenue a lluntinKton Beach. CA 92647 + (714) 847.6(03
April 1; 1986
Tam Livingood,' Chairman
and'Members of the Planning Commission
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Honorable Commissioners:
Can behalf,of the Huntington Beach/Fountain Valley Board of REALTORS, I would
iikit to express our concerns about:an item on your agenda this- evening, D--1,
titled "Draft Affordable Housing Policies."
While we: can appreciate the fact ghat• this newest revision of.- the Proposed ..
Affordable .Housfng Policies Js somewhat improved from -the previous .draft, our
reviteir of the proposed 'policies indicates that. their implementation:,wtlt have
an adverse effect on the provision of 4flordable housing in our City.
Our concerns are. as follows: With regard to policy A. -we strongly object,
and -find• no basis in;:law, to any, requirement for affordable housing which is
exacted from: a developer who is building 'in the- Coastal -Zone, and therefore,
we, are 'adamantly ,opposed to:any policy which contains: a requirement for
IncIustonarryy zoning in our,City. '.: It.As our. strong ,feeling:,that,'under rcanda--
tory inclusfcnavy zoning programs, the developer,..the landowner, or the
eventual owner of the market rate;•units:.tndividiiall shoulder -the burden..of
subsidizing low and moderate ;income housing. : .•It•is inconce't4a6le -to us that
the City of Huntington Beach would consider adopting a policy- which has failed
In ro many other locations, including out .own County of Orange. in fact, it
has been proven numerous, times' that the private market will often'. provide for
much more affordable housing: if, left to work without government interference.
W11 refer to a study by the County of. Orange. Administrative Office which Andt—
cates that the number of affordable units provided for through resales (which
allows for filtering of housing from higher income groups to lower income
groups) and through non-governmentally constrained construction, outnumbered
the units provided for under the, County's inclusionary program by more than
two to ones!
In response to the allegation that the "affordable housing" is required by the
Mello Bill, 1 would like, to luote from the Mello Bill 65590 (d) of the Govern--
meet Code, which states: "New housing development constructed within the
coastal zone, shallt where feasible, provide housing units for persons and
families of low or moderate income, as defined in Section 50093 of the Health
and Safety Code. Where it is not feasible to provide these housing units in
OFFICERS
R L."KIAK'KIRKLAND,President• LILA NOWELL,First Vice President
JAN SHOMAKER.Second Vice President/MLS Chairman• BETH DUNCOMBE.Secretary/Treasurer
DIRECTORS
:tCNT M PIERCE• LARRY GAGE• MAGGIE SHAFFER• JIM RIGHEIMER• FRANK C.HORZEWSKI
WILL WOODS,Etecutive Vice President•JUDITH SEVERY,Vice President/Pub:ic Affairs
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Huntington Beach Planning Cormission
April 1, 1986
a .proposed new housing developmert Cie local government shall require the �
developer to, provide such housing. ..'.If feasible to do..so; at *another_ location
within' the same city ,or county,,' either within the coastal zone or-4 thin three
miles thereof. , Inorder .to .assist with providing nest; ltoustng, a:r►its. cch local ;
-government shdtlluoffer. densit "�bonusos or, other;.incenavrs includin" `;:but` not `
'litnited''to MMIfIcat on of zoninq_and su ivis� ion requirements, F•_rn erate
sin o re uire a licattons and the waiver of appropriate fees."
roces
The definition of "feasible" it also pertinent to this issue, and is defined in
the Hello Bill (65590) (g) :3) as follows.
"Feasible" means capable of bring accomplished in a successful manner. within
a reasonable period of time, taking into account economic, environmental, social
and technical factors.
We would .like. to point out that' the Mello Bill". contains `no requirement, for ;a
set percentage of ,affordable 'units to be ificluded' in:.•each projects, and:..would ;
re60mmand continuing the current City• policy adapted February 22, 1983, to
direct staff- to review each. proposal for a demolition,' conversion or new devel-
aptiaent in• the Coastal Zone,,on a case by.case basis,_for compliance with the .
Mello Bill. The 'existin licy in our City is consistent with the politics bet.
by' most Coastal ur s c ons or . e o UiLicompliance.
With regard to policy #2, we find no justification f-)r this percentage in the
draft policies. If the,.Survey of,Affordable housing which we, have .reviewed. 1,
is .being -Used as a justification for the so called "need" for housing, then we
must paint out that much of the information: in the }urvey is. out of date. it .
is widily re79crest
ni id that one of the• key factors in the affordabillty of .housing
is_mortgage rates. ';she Housing Affordability Study.-gave examples, r
based on a 12%, interest rate, and stated that- "only those with moderate 'house-
hold. incomes would be able .o purchase housing in the City and trey_ are limited -,
to. the t-do and. three bedroom categories." As. we all .know, interest rates are '.
currently less than .10',l. for 30-year fixed rate mortgages. . In fact, ;there is
A .new. program which offers a 9%i . 30-year fixed rate through the California
Housing Finance Agency. In addition. - the study ignorer, the availability of _•!
Ad ustable Rate Mortgages and Variable date_ Mortgages which .offer ,interest
rates* of 8.5% to 9.5 ad which are often used b rst time homebuyers to `
qualify for a loan. -Other factors we question in the Stud include the survey
'
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of rental housing. which seemed to fxus on larger developments in detiermtn-
ing rents, while .Snoring smaller rental properties and single family homes
which are for rent in this area.
With regard to policy #5, we are opposed to any form of "deed restrictions" ! :,
being placed on property, whether rental or for sale units.
With regard to policy. #6, we feel that this effort to prevent the "so-called
double dipping" is entirely 'co' n' Cri'a'ry to the goals of the City to provide afford- f `
able housing. Instead of 1 m tip-ing the incentives offered to developers, the
City should aggressively seek cut ways tc. provide the incentives required to
encourage the development of affordal le hour ,n s required by the Mello Bill!
We strongly recommend that the Planning Commission reject this unnecessary
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Huntington Beach Planning Commission
Page 3
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and,reseridive policy, and instead direct •staff to pursue every available �.
option to facilitate private market construction of affordable housing such as �
a higher. density zoning, shorter project review periods, lower development, fees,
exp!ditious development processing, assistance ir. use of state funds to finance
needed infrastructure and community facilities, encouraging innovative product
design and construction techniques to meet affordable housing needs, and the
provision of mortgage revenue band financing as well as low interest Late
loans for home purchasers.
Finally, on behalf of the Board, I would like to state that we appreciate ,end
'aS •2 your stated goal to increase. the availability of housing in oatr City,
hc..rcver, the mechanism suggested in these draft policies are simply unaccept—
able in a free smie;ty. Many of them have been tried and• have failed miserably
to other cities. We urge you to reconsider...for the benefit of our residents.
Sincerely, •
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.. Le "Kirk' lCirxlanI
E Board President
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Huntington Beach
Fountain Valley
]Board of REALTORS; Inc.
R EA LTC R 8101 Slater Avenue ! Huntington 1lepch, CA 926.17 • (714) 947•filt<J3
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May 6, 1986
The Honorable Tom Livingood, Chairman
Planning Commission
j City of.Huntington Beach
7000 Main Street
! Huntington Beach, CA " .92648
Honorable Commissioners:
We have already commented to you 'aat length with regard to our. concerns, on
the proposed Draft Affordable Housing Policies. As. stated in our correspon-
dence to you dated April 1, 1986, there is no question in our minds that the
proposed policies will have an adverse impact on the provision of housing in
the City of Huntington Beach.
To focus on just one of the proposed policies, inclusionary zoning is not a
"new" idea. It is an old idea which has already been proven not to work.
You are probably aware that our own County of Orange was among the first
to jump on the inclusionary bandwagon back in 1979. Their program was a
"model" for many other municipalities in the nation. Less than 3 years later,
the Supervisors recognized the sad. reality of the social engineering they had
attempted to' create and voted, to. eliminate the program. Subsequent reports
produced by the County Adniinistration Office indicates that more affordable
housing is being produced without the inclusionary program than was created
i' •
with iti
I would like to quote from an article titled "Robin Hood" Subsidies: A Dubious
j New Fact" in the March 21, 1983 editir- of FORTUNE magazine.,
...As the Reagan Adniinistration shuts the spigot on most
federal housing subsidies, a scramble is on for other ways
to produce "affordable" homes for low and moderate income
fan, ilies. one provocative new idea is for localities to farce
builders to erect a quota of cut-price homes or contribute
to their construction nearby. The disappointing results of
this attempt to substitute private for public subsidy--or,
more often, to blend the two---show that smarter techniques
are needed...
...Nowhere has the affordability gap dimmed the dreams of
would--be homeowners; more strikingly thar_ in California,
which by no coincidence accounts for most of the dwellings
OFFICERS
R.L,"KIRK"KIRKLAND. President• LILA NOWELL,First Vice President
JAN SHOMAKER,Second Vice President/h1LS Chairman# BETH DUNCOMBE,Secretary/Treasurer
DIRECTORS
KENT M.PIERCE•LARRY GAGE• MAGGIE SHAFFER• JIM RIGHEIMER+ FRANK C.HORZEWSKI r.�.
WILL WOODS,Execrtiva Vice President•JUDITH SEVERY,Vicc Prrsident/Pubtic Atlairs x'f
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Huntingion Beach Planning Commission
May 6, 1986
Page 2
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built under inclusionary zoning. On top of stiff mortgage
rates, three other great forces have driven up, housing costs:
soaring land prices, overregulation by localities, and various
permits and fees that typically total $10,OCO per unit.
California aggravated these problemil by shooting Itself. in
the toot. Responding to pressures from environmentalists,
cities and counties • during the 1970s adopted the nation's
r most extensive web of local land-use and growth-control laws.
The effect was to create an artificial shortage of building
sites as a renewed population influx was beginning. By
1980 the cost of a typical tiny (one--fifth acre). California
lot had leaped to nearly $30,000—or more than $140,000 an
acre, three times the national average...
...inclusionary zoning is a 'blunderbuss political reaction
to this -situation, making builders the scapegoats for `forces
beyond their control. Its ineffectiveness shows vividly in
figures compiled by the state department of housing., Only .
5,098 units have been built and occupied under inclusionary
programs in the past four years, though developers have
made commitments to build 10,875 more over the next several
years.
Bit in .1982 alone some 20,000 affordable units were started
in the state, the great bulk .of them without local compulsion.
The total amounts to half of all on,--family housing starts.
Most of them were rather dinky affairs-650 to . 1,050 square
feet--Built oa cheap land at a considerable distance' from
big cities. . : Most of, their ' buyers and renters have solved
the affordability problem in time-honored fashion by accepting
M less living space and longer commutes...
' ...Orange County's inclusionary program has another drawback
that deters some of its intended beneficiaries: resale price
controls. To prevent . windfall profits for the lucky, recipient '��
of, say, a . $10,000 price break on a new home, many units
carry 30-year deed restrictions. These give a local government
agency option to bu g y first ti p y a unit . put up for resale. The
price is allowed to increase no faster than local incomes,
plus owner--financed improvements. Thus, the owners can
+ find themselves locked into their homes for years because
their equity rises so slowly they cannot afford to buy else-
where...
..."Our inclusionary zoning may be touted as a model," says
} Roger Stanton, chairman of the board of supervisors, "but
as far as I'm concerned it's a monster and a fraud."...
...One way states can make housing more affordable is to
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Huntington Beach Planning Commission
May 6, 1986
Page 3
' emulate . California in overriding cost - boosting local land-
use controls., Unless lawmakers rise to the occasion by outlaw-
ing misconceived economic barriers, the result is likely to
' be more inclusionary zoning and other schemes that trample
unnecessarily on the marketplace."
I. urge you to save the City of Huntington Beach the same,frustration, tax,
dollars and time when affordable housing could be produced in our City under
the free market system. Develo ers will build•. whet they can sell: Housing
policies which attempt to implement social engineering programs will prove to
be a miserable failure in this City as they have been in others.
h. For your information, : have enclosed a copy. of a. report we received in
September, 1985, from Supervisor Roger Stanton which outlines their experience
with inclusionary vs. . free market approach to housing. I have also enclosed
a 1/6/83 report from CEEED titled "Affordable Housing" in Orange County:
Comparative Performance of Private Sector Voluntarism vs. Government Frice
Controls.
1 urge you to benefit. from the experiences of others. There is simply no
reason for Huntington Beach to make the same mistakes that others have.
We reiterate our recommendation that the City continue the current policy
adopted by. City Council action February, 22, 1983, to review each proposal
for a demolition, conversion or new development in the Coastal Zone on a case-
by-case basis for compliance with the Mello Bill.
In addition, it is our feeling that the City, should avail themselves_ .of_ every
opportunity to assist in the provision of. affordable housing, by assisting build-
ers .with every .means at its disposal, including the provision cf mortgage bond
financing, denisity bonuses, fast track processing, reduced, 'permit fees, etc.
These opportunities are not "gifts"--it is the City's res onp_ sibil .y to provide
this assistance in order to make housing more affordable oar its residents.
You have a unique opportunity to show, your leadership in this area by devel-
oping an innovative program which would attract builders to our community
to build more housing. Let us take this path of leadership.
Thank you for your consideration.
Sincerely,
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R.L. "Kirk" Kirkland
Board President
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Huntington Beach
F'ou*n ain Valley
Board of REA LTORS' Inc.
R EA LTO R• A101 Slater Avenue • Fluntint.•ton Beach, CA 92647 • (714) 847.60S•;
July 11, 1986
The Honorable Tom Livengood,Chairman and
Members of the: Planning CommIssior.
City of Huntington Beach
Post Office Box 190
Huntington Beach, CA 92640
RE: Draft Affordable Housing PaNcles, July 15, 1986 Agenda Item
Honorabie'Commissioners:
First of all, on behalf of the Huntington Beach/Fountain Valley Bcard of REAL T ORS, I would
like to cornmend you for the straw vote taken at your last meeting which ellmltuIe:d Inclusionary
zoning In our Coastal Zone. This decision Is consistent with the decision made previously by
our City Council and we wholeheartedly approve.
We are also pleased to see that the new draft eliminated the burden of a deed restriction for
future purchasers of property, and we commend you for that decision also.
We continue to have concerns with regard to three: of the items which are !ncluded In the draft
which will bo under consideratlon at your July 15, 1986 meeting. All of these Items will make
It more difficult and less economically feasible, for developers to build in obr City.
(1) We do not believe It Ise reasonable to expect affordable units, when they are included
Ina project, to beat the came size and mix an thereat of the project. This mevns
that the owners of the market rate property are subsidizing the rest. We believe that
affordable housing could be smaller or in a less desirable location and still be habltable.
Almost all housing ptojects have less datlrable locations which are usually lost expensive.
All of us have seen advertisements for developmt`:tls that have a "premium" for a better
location, a larger lot, or bigger living quarters.
(2) We believe the City would be better served if you maintained your own flexibility to
make decisions regarding the maximum densl:y bonus allowed !or regular or senior I
residential projects. To place a maximton.in the policy limits your ability to consider
an 'Innovative approach or better design which may be presented In the future.
(3) Tho most serious concern we have is with regard to item 3 which does not allow
requirements for affordable units to be•comingled. To our knowledge, no other local
Jurisdiction has this requiremant. Instead of Ilmiting the Incentives offered to developers,
continued
OFFICERS
R L."KIRK'KIRKLAND.President• LILA NOWELL.First Vice President
JAN SHOMAKER,Second Vice President/MLS Chelrman• BETH DL'NCOMBE,Secretary/Treesurbr
DIRECTORS
..ENT M.PIERCE•LARRY GAGE•MAGGIE SHAFFER a JIM RIGHE114ER• FRA14K C.HORZEWSKI
WILL WOODS,Executive V1ce President+JUDiTH SEVERY.Vice President/Public Affairs
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• Huntington Beach Punning C1'NIssion
July 11, 1986
Page 2
we believe the City should be encouraging construction by making Huntington Beach
a more attractive place to build. The use of density bonuses and mortgage bony
financing should not be used to cancel one another out--rather, to facilitate the
pr;vate Marko I..construct Ion of affordable housing. Other methods the*City should
explore could Include fast track processing of development requests, shorter project
review periods,lower development tees, and the encouragement of Innovative .
design and construction techniques.
We believe that one of the primary goals of the.Planning Comrnlssion should be to facilitate and
encourage the highest and best use of,tho land. We believe•that you will find that the development
industry can be both Innovative and creative and that they will rat build what they ca„nrat sell!
The free market system Is probably bestexemplifled by'the housing Industry. if you do what you
can to help, the industry will respond, and the residents will be housed appropriately.
We wanted to get these comments to you for your consideration prior to the'meeling. We'
will be present to dlscuss these Issues and thank you in advance for your attention.
sincerely,
R.L. "Kirk"Kirkland
Board President
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