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HomeMy WebLinkAboutItems DistributedAugust 11, 2018 Mayor Al Murray and City Council Members City of Tustin 300 Centennial Way Tustin, CA 92780 RE: Support and Adopt Workforce Housing Incentive Program Ordinance Dear Mayor Murray and City Council Members: www. kennedycomm i ss ion. org 17701 Cowan Ave., Suite 200 Irvine. CA 92614 949 250 0909 Fax 949 263 0647 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 approve and adopt the Workforce Housing Incentive Program Ordinance. Adopting this ordinance would allow proposed new residential developments to accommodate the affordability requirements through in -lieu fees, land dedication, off-site construction of affordable units or 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 this 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% 'Out of Reach 2018- The High Cost of Housing, National Low Income Housing Coalition, p.14, 2018_ '- Out of Reach 2018- The High Cost of I lousing. National Low Income Housing Coalition, p.38, 2018. 'Orange County's Housing L"mergency and Proposed Solutions, California Housing Partnership Corporation, p. 1, May 2018. Mayor Murray and City Council Members August 1 l , 2018 Page 2 of 3 of the 525 units.4 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.' In the City, the average rent for one -bedroom was $1,787 per month while a two- bedroom rents for $2,139 per month .6 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.' 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.8 For a two-bedroom, a low-income household will severely overpay and spend 51% of their income towards housing.9 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.10 With lower wages that are not keeping up with rising rents, many renting households struggle financially to live and end tip working multiple jobs to make ends meet.11 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 homeless." 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 Center13 has cleared out, we are still far from solving Orange County's affordable housing and homeless crisis. Inclusionary 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 ' City of Tustin City Council Agenda, p. 6, April 17, 2018. '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. ' City of'1'ustin Planning Commission Agenda Report: Ordinance No. 1491, Inclusionary Housing, p. 3, February 13, 2018. 'City ofTustin 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. 4, February 13, 2018. 0 2018 House Prices and Rents Will Keep Growing with No End in Sight, Economists Say, The Orange County Register, January 4, 2018 " Southern Californians Scrimp to Get By as Average Rents Ilii $1,900, The Orange County Register, February 15, 2018. Z City of Tustin Planning Commission Agenda Report: Ordinance No. 1491, Inclusionary Housing, p. 4, February 13, 2018. Homeless at Tustin Civic Center Clear Out- Most Well Before City's Deadline, The Orange County Register, August 7, 2017. Mayor Murray and City Council Members August 11, 2018 Page 3 of 3 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 $1.6,693 per unit for all developments is significantly higher than Tustin's proposed in -lieu fee of $8,000 to $12,000 per unit.14 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. 15 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 2020.16 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, .w Cesar Covarrubias Executive Director " City of'rustin City Council Agenda, la. 4, April 17, 2018. IBC Residential Development Status As Of. December 1, 2017, City of Irvine. ° Upcoming Affordable }-lousing Projects Effective as of February 21, 2018, City of Irvine. Building Industry Association of Southern California, Inc. It ORANGE COUNTY CHAPTER BIR August 11, 2018 Mayor Al Murray City of Tustin " r h.ii hid% 3000 Centennial Way �3 !_ ;,,!!, Tustin, CA 92780 Re: Item 4 - Tustin Inclusionary Zoning — Oppose P F'u� Dear Mayor Murray, On behalf of the Building Industry Association of Orange County, I write to oppose Item 4: The Inclusionary Zoning Housing Tax. As you recall from all prior hearings, 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 here in August the City has still not held a single roundtable discussion. To pass an ordinance directly impacting the development community without due diligence or the necessary research as to the scope of its impact is wildly irresponsible. California is in the midst of a housing crisis and it's imperative you do not vote to push housing costs 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 the policy before you is misleading and incomplete, we ask that you do not approve this item. Instead we ask that proper research be completed. For an example of this, please contact the City of Anaheim. There, Council and Staff assembled a working group and held multiple study sessions on the topic of Affordable Housing. Working together, staff assembled a collection of best practices that incentivize such development, avoiding all tax -and -spend approaches that have a proven record of failure. For furth reference, please see the attached report from the City of Portland. Cno+ 1n olt,� .1Z Again, do not vote on an unvetted, tax -and -spend housing policy. Calling this proposal a voluntary or incentive based program borders on the absurd. Please take the time to move beyond the talking points and understand what it is that you are being asked to vote upon. For the betterment of Tustin, understand what you are asked to approve. Thank you for your thoughtful consideration Respectfully, Steven C. LaMotte Chapter Executive Officer F r.L N P,.,_�L)P t1A14.RF1. rv:fv9rvTE, :; t!N Fc FR F z ',,NF K �Al-,MB� SF-idN wiFF7SLEi?