Loading...
HomeMy WebLinkAbout11-CORRESPONDENCE RECEIVEDJuly 2, 2018 D P7 -_-,2 O JUL 02 2018 TL)STiN CITE' CLERX'S OFFICE Mayor Al Murray and City Council Members City of Tustin 300 Centennial Way Tustin, CA 92780 www.kennedycommission.org 17701 Cowan Ave., Suite 200 Irvine, CA 92614 949 250 0909 Fax 949 263 0647 RE: Support and Adopt Workforce Housing Incentive Program Ordinance (Exhibit D) Dear Mayor Murray and City Council Members: The Kennedy Commission (the Commission) is a coalition of residents and community organizations that advocates for the production of homes affordable for families earning less than $20,000 annually in Orange County. Formed in 2001, the Commission has been successful in partnering with Orange County jurisdictions to create effective housing policies that have led to the new construction of homes affordable to lower income working families. Ranked among the top ten least affordable metropolitan areas in the country', Orange County is suffering from an affordable housing crisis. A resident must earn at least $36.08 per hour to afford a two-bedroom apartment at a fair market rent of $1,876 a month.2 As rents and the number of residents needing affordable homes have continually increased, the number of affordable homes being built for lower income households has not kept up with the demand. An additional 92,738 affordable rental homes are needed to address Orange County's housing needs for lower income renters.3 As the City moves forward in addressing the affordable housing needs for lower income households, the Commission urges the City Council to support the Workforce Housing Incentive Program Ordinance as it was proposed and passed unanimously by the Council on April 17, 2018. Currently referred to as Exhibit D (Ordinance enumerated No. 1491 D) by City Staff, we believe that this ordinance provides the best flexibility of alternatives on proposed new residential developments that benefit financially from the City through discretionary approvals. These approvals allow land use designation changes (i.e., allowing residential uses) and up -zoning properties for increased density that developers were not previously entitled to. By approving these benefits, the City provides significant windfalls and increases the property values of developers and private owners. The City has control over land use decisions and should take this opportunity to provide development incentives for proposed residential developments in exchange for community benefits, such as the development of affordable homes for lower income households in the City. Exhibit D also allows proposed residential developments to accommodate the affordability requirements through in -lieu fees, land dedication, off-site construction of affordable units or ' Out of Reach 2018- The High Cost of Housing, National Low Income Housing Coalition, p. 14, 2018. Z Out of Reach 2018- The High Cost of Housing, National Low Income Housing Coalition, p.38, 2018. 'Orange County's Housing Emergency and Proposed Solutions, California Housing Partnership Corporation, p. I, May 2018. 4 Voluntary Workforce Housing Incentive Program Ordinance, City of Tustin's Staff Report, p. 4, July 3, 2018. Mayor Murray and City Council Members July 2, 2018 Page 2 of 4 providing an alternative deemed acceptable to the City. In addition, due to the dissolution of redevelopment and lack of readily available affordable housing funds and resources, implementing a more flexible ordinance can be a more effective tool for the City to take on an active role in encouraging and incentivizing more opportunities for affordable homes. The Need for Affordable Homes in Tustin For the 2014-2021 Housing Element planning period, the City has a Regional Housing Needs Assessment (RHNA) of 283 very low-, 195 low-, 224 moderate- and 525 above moderate - income households. To date, 98 or 35% of the 283 very low-income units have been produced and 74 or 38% of the 195 low-income units have been produced; however, for the above moderate -income units, the City outperformed the RHNA need and constructed 1,046 or 199% of the 525 units.s With a remaining RHNA need of 306 lower income homes, it is important the City create effective policies, such as adopting the proposed inclusionary housing ordinance, to encourage the development of affordable homes for lower income households in the City. The need to increase quality affordable rental homes should be a high priority in the City. According to the City's Planning Commission report, 9,189 or 34 percent of the total number of households in Tustin are low-income households earning less than $50,000 or $24 per hour annually.6 In the City, the average rent for one -bedroom was $1,787 per month while a two- bedroom rents for $2,139 per month .7 This is simply out -of -reach for many lower income households, especially for those who want to live and work in the City. In order for housing to be affordable, households should not pay more than 30% of their income towards housing costs. For lower income households to not be rent burdened, their rent would be affordable at $1,250 or less.s Unfortunately, at an average rent of $1,787 per month for a one -bedroom, a low-income household will overpay and spend 43% of their income towards housing.' For a two-bedroom, a low-income household will. severely overpay and spend 51% of their income towards housing. 10 With the severe shortage of homes, especially affordable homes and low vacancy rates, it is projected that rents and housing costs will continue to rise.' 1 With lower wages that are not keeping up with rising rents, many renting households struggle financially to live and end up working multiple jobs to make ends meet. 12 The City estimates there are at least 3,000 overpaying renter households and significant number of those who could be one to two paychecks away from being homelessY $ City of Tustin City Council Agenda, p. 6, April 17, 2018. s City of Tustin Planning Commission Agenda Report: Ordinance No. 1491, Inclusionary Housing, p. 3, February 13, 2018. ' City of Tustin Planning Commission Agenda Report: Ordinance No, 1491, Inclusionary Housing, p, 3, February 13, 2018. s City of Tustin Planning Commission Agenda Report: Ordinance No. 1491, Inclusionary Housing, p, 3, February 13, 2018. ' City of Tustin Planning Commission Agenda Report: Ordinance Na. 1491, Inclusionary }dousing, p. 3, February 13, 2018, 10 City of Tustin Planning Commission Agenda Report: Ordinance No. 1491, Inclusionary Housing, p. 4, February 13, 2018. " 201.8 House Prices and Rents Will Keep Growing with No End in Sight, Economists Say, The Orange County Register, January 4, 2018 'Z Southern Californians Scrimp to Get By as Average Rents Hit $1,900, The Orange County Register, February 15, 2018. '' City of Tustin Planning Commission Agenda Report Ordinance No. 1491, Inclusionary Housing p. 4, February 13, 2018. Mayor Murray and City Council Members July 2, 2018 Page 3 of 4 The lack of affordable homes has reached a crisis point and homelessness continues to increase and is threatening the safety and public health of our communities. While the homeless encampments in the Santa Ana River bed, Santa Ana Civic Center and even the Tustin Civic Center14 has cleared out, we are still far from solving Orange County's affordable housing and homeless crisis. I_nclusionary Housing Ordinance is Effective Contrary to concerns that implementing an inclusionary housing ordinance will "halt or chill" residential development, inclusionary housing ordinances that are implemented in other cities have been very successful in not only facilitating the development of affordable homes but also market -rate developments. Currently, there are seven cities in Orange County that have inclusionary housing ordinances including Tustin's neighboring sister cities of Irvine, Santa Ana, Huntington Beach and Brea. While Santa Ana's ordinance has been established since 2011, the rest of the cities implemented inclusionary housing ordinances for at least 15 years to well over three decades. The number of years are indicative that the inclusionary housing ordinance is successful otherwise it would have been removed by these cities. The City of Irvine in particular has been very successful in 'implementing the inclusionary housing ordinance. Housing costs in Irvine is among the highest in Orange County and yet even with an inclusionary housing policy, it has not "halted or chilled" development in the City. The effect is quite the opposite and there is a high interest from developers to propose residential developments in the City. It is quite evident in several areas of the city, such as the Irvine Business Complex (IBC) and the Great Park, where residential development is booming and under construction. It is also important to note that Irvine's in -lieu fee of $16,693 per unit for all developments is significantly higher than Tustin's proposed in -lieu fee of $8,000 to $12,000 per unit.15 However, Irvine's inclusionary housing ordinance and in -lieu has not impeded residential. growth in the City. In particular, the IBC has been robust and successful in residential development in the City. Since 2003, there has been 5,630 units that was built and completed in the IBC. To date, there are 2,578 units under construction, 4,219 units approved and 685 units are in process in the IBC. 16 Overall, in terms of upcoming affordable housing developments in Irvine, there are 276 very low-income units and 5 low-income units anticipated to be completed in Spring 2018 to 2020.17 " Homeless at Tustin Civic Center Clear put- Most Well Before City's Deadline, The Orange County Register, August 7, 2017. 5 City of Tustin City Council Agenda, p. 4, April 17, 2018. IBC Residential Development status As Of: December I, 2017, City of Irvine. �' Upcoming Affordable Housing Projects Effective as of February 21, 2018, City of Irvine. Mayor Murray and City Council Members July 2, 2018 Page 4 of 4 The Commission looks forward to partnering with the City to increase affordable home opportunities for lower income households in the City. Please keep us informed of any updates and meetings regarding the City's Workforce Housing Incentive Program Ordinance. If you have any questions, please contact me at (949) 250-0909 or cesarc@kennedycommission.org. Sincerely, Cesar Covarrubias Executive Director C3 ORANG E COI I N TY BUSINESS COUNCIL 2 Park Plaza, Suite 100 1 Irvine, CA 926141 P 949.476.2242 1 F 949.476.0443 1 www.ocbe.org July 3, 2018 The Honorable Al Murray JUL 0 3 2018 City of Tustin TUSTIN 3000 Centennial Way C17 -Y CLEPZKIS OFFICE Tustin, CA 92780 Re: Item 11 - Tustin Inclusionary Zoning Options — Oppose Dear Mayor Murray and Council, Orange County Business Council (OCBC) is respectfully requesting the City Council continue the Inclusionary Zoning item before you on July 3. OCBC continues to be opposed to Inclusionary Zoning. As OCBC noted in the Agenda Report for the item, staff is proposing four alternatives for your consideration, two of which have never been presented at a public hearing. Options B and C represent new policy proposals that have not been vetted by staff to gain even a basic understanding of potential impacts, nor have private -sector stakeholders (most notably, the building industry) been afforded time study these new alternatives. OCBC is disappointed entirely new policy proposals are being advanced without collaboration with and adequate notice to the stakeholders most impacted by these new proposals. OCBC respectfully requests the Tustin City Council provide impacted stakeholders time to thoroughly review the alternatives presented to council by staff. Therefore, OCBC asks the Council to continue the item at least until the Council's next regularly scheduled meeting of July 17, 2018. Thank you for your consideration. Sincerely, Alicia Berhow Senior Vice President of Government Affairs THE LEADING VOICE OF BUSINESS IN ORANGE COUNTY PACIFIC WEST ASSOCIATION OF REALTORS° n® 1601 East Orangewood Avenue, Anaheim, CA 92805 1 TEL: (714) 245-5500 1 FAX: (714) 245-5599 July 3, 2018 City of Tustin 300 Centennial Way Tustin, CA 92780 Re: Agenda Item No. 11: Public Hearing: Ordinance No. 1491 Dear Mayor Murray and Members of the City Council: In follow-up to our March 23, 2018 letter, the Pacific West Association of REALTORS® (PWR) would like to reiterate our opposition to the mandatory inclusionary zoning (IZ) policy being considered by Tustin. We recognize the need to address the housing affordability crisis both locally and statewide, which has made housing a substantial economic burden on working families. We respectfully recommend that the City first address the underlying causes of the affordability issue and devise a comprehensive strategy as opposed to advancing IZ with the idea that it is the silver bullet. PWR believes that new housing should generally be supported as a means of addressing the housing shortage, with the added benefit that such construction activity will create jobs and associated economic activity. For instance, more streamlined and accelerated land -use approvals for homebuilding, greater flexibility in the construction of Accessory Dwelling Units (ADUs), zoning that supports mixed-use and infill projects, and enhanced voluntary incentive programs for the development of low to moderate -income units are all housing approaches that can contribute to addressing home supply and affordability. Unfortunately, addressing housing affordability from a governmental regulatory perspective is likely to have unintended consequences, be highly impractical and help only a small percentage of those it's intended to help. For instance, the July 3, 2018 Agenda Report raises some serious concerns: • Several versions of the proposed ordinance stipulate developments the ordinance applies to as "only to projects that utilize a Residential Allocation Reservation". Nowhere is Residential Allocation Reservation defined, creating uncertainty as to its meaning. The Fiscal Impact statement asserts: "Implementation of the Ordinance with an in -lieu fee is expected to generate funds for the City's workforce housing incentive program fund in unknown amounts for use in support of City affordable housing programs and projects." This seems to contradict the proposed requirement that all affordable units are to be built onsite. • Effects and possible alternatives: "City Staff became concerned that the revised restrictions might have adverse, unintended consequences: A. Disproportionate Effect on Smaller Projects. B. Elimination of In -Lieu Fee Option Could Limit the City's Ability to Advance Other Affordable Housing Initiatives." We agree with Staff's analysis that "the requirement to build affordable units within a for -sale project will discourage the development of ownership housing. Thank you for your time and consideration of alternatives to IZ that contemplates all housing consumers, housing producers and landowners. Sincerely, zV Tim Shaw Government Affairs Director �hy e Schachter Government Affairs Director Building Industry Association of Southern California, Inc. ORANGE COUNTY CHAPTER July 3, 2018 Mayor Al Murray City of Tustin 3000 Centennial Way Tustin, CA 92780 Re: Item 11 - Tustin Inclusionary Zoning — Oppose Dear Mayor Murray, On behalf of the Building Industry Association of Orange County, I write to oppose Item 11: The Inclusionary Zoning Housing Tax. As you recall from the April 17, 2018 Council hearing, the Business and Development Community stand together in opposition to this taxation on housing, regardless of its moniker. You will also recall that this process started in February and yet, for the first time tonight, we have several brand new, unvetted, unsupported and unannounced policy recommendations. The staff recommended "Option C" is particularly egregious as it represents an approach that will have untold impact on homebuilding and apparently no research has been proffered to support it. As we will continue to mention at every hearing, California is in the midst of a housing crisis. To pass an ordinance that has no research as to the scope of impact is wildly irresponsible. It is critically important that housing not be pushed further out of reach. Do not vote on the unknown. For the litany of reasons listed at previous hearings, as well as the fact that there have been no study sessions, no working groups and no effort to consult the very industry this ordinance targets, we ask that you do not vote on this tonight. Instead we ask that proper research be completed that illustrates the impacts Options A- D will have on housing stock in Tustin. Conduct a study session, consult with experts and present the public with the tools necessary to understand what a vote on these options will actually mean for the future of this community. To blindly vote on an ordinance without understanding it's impact stands as a great disservice to those you are elected to represent. Again, and at the very least, we ask for a continuance until such time that adequate supportive research can be completed. Thank you for your thoughtful consideration Respectfully, Steven C. LaMotte Chapter Executive Officer i BIH 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 PETER VANEK FOREMOST COMPANIES MEMBER -AT -LARGE SEAN MATSLER MANATT, PHELPS & PHILLIPS, LLP EXECUTIVE OFFICER STEVE LA MOTTE