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11 BUILDING INDUSTRY OF SOUTHERN CALIFORNIA, INC.
451-H ORANGE COUNTY CHAPTER
March 5, 2024
Mayor Austin Lumbard
City of Tustin
300 Centennial Way
Tustin, CA 92780
Re: Item 15 — Temporary Suspension of Affordable Housing In -Lieu Fee
Dear Mayor and Council,
On behalf of the Building Industry Association of Southern California - Orange County
Chapter (BIA/OC), I write to support amending your Inclusionary Zoning program in
response to years of tangibly poor results. While there are a number of possible issues
that factor into development decisions, Inclusionary Zoning stands as a clear hurdle to
the production of new housing.
As such, we recommend a full suspension of the existing policy as a first step in
determining its impact on your development community. Under your existing structure,
shockingly few units have been proposed within the two impacted Specific Plans. To
spur development, it would make sense to remove barriers to development and then add
back only what is needed, as development again shows signs of progress.
Alternatively, if the Council is interested in an incremental option, we suggest an
amendment to the Staff proposal. Clarity and flexibility are cornerstones to investment
decisions. We suggest removing any "sliding scales" and instead fix a flat inclusionary
rate at 5% within the two specific plans (clarity) with an in -lieu fee option remaining
for meeting the 5% requirement (flexibility).
In -lieu fees are a powerful option as discussed at the Costa Mesa City Council Study
Session on February 27, 2024. At this hearing, Keyser Marston testified at the 1 hour,
20 minute, 54 second mark that, "as a financial consultant it would absolutely be my
recommendation [to do in -lieu fees] because it's so much more financially efficient to
do a 100% affordable project with the outside leveraging." Further discussion is held
on the experience of Santa Ana and how their approach of leveraging in -lieu fees has
resulted in far more units produced than would have otherwise occurred under an on -
EXECUTIVE COMMITTEE
PRESIDENT
BROOKE DOI
SHEA HOMES
1' VICE PRESIDENT
MEGAN ELTRINGHAM
THE NEW HOME COMPANY
TREASURER
DAVE MELLO
LANDSEA HOMES
SECRETARY
JOE OFTILE
WARMINGTON RESIDENTIAL
TRADE CONTRACTOR VP
ALAN BOUDREAU
BOUDREAU PIPELINE
ASSOCIATE MEMBER VP
MARK HIMMELSTEIN
NEWMEYER & DILLION, LLP
MEMBER AT LARGE
PETER VANEK
INTREGAL COMMUNITIES
MEMBER AT LARGE
SEAN MATSLER
COX, CASTLE, & NICHOLSON LLP
IMMEDIATE PAST PRESIDENT
EPIC NELSON
TRUMARK HOMES
SR. VICE PRESIDENT, OC CHAPTER
ADAM WOOD
BIAOC
17192 MURPHY AVE #14445, IRVINE, CA92623
949-553-9500 1 BIAOC.COM
site requirement provision. As Tustin looks to spur development, consider the alternative that
produces the greatest amount of the desired Inclusionary product.
In summation, the best option is to suspend your existing Inclusionary requirements for the
proposed 36-month period as a means of eliminating a significant hurdle to development. If for
any reason that is not possible, then consider an alternative that maximizes clarity and flexibility.
There is no questioning that Inclusionary Zoning and related fee structures are inherently difficult
to implement. Policies mandating exactions will inevitably contribute to lost housing opportunity,
despite best intentions and efforts. Inclusionary Zoning is an excellent tool for giving the
appearance that "something" is being done about housing affordability. The reality of Inclusionary
Zoning is that it kills far more homes than it creates, ultimately fueling the growth of California's
housing crisis.
Thank you for your thoughtful consideration of the points raised above.
Sincerely,
Adam S. Wood
Senior Vice President
Building Industry Association
of Southern California — Orange County Chapter