HomeMy WebLinkAboutE-Comment - Eric HiguchiFrom: noreplly(a aranicusideas.com
To: Yasuda. Erica; Woodward. Carrie; E-Comments
Subject: New eComment for City Council Special Closed Session-4:30 pm/Regular Meeting-7:00 pm
Date: Tuesday, March 5, 2024 12:28:36 AM
City of Tustin. CA
New eComment for City Council Special Closed
Session-4:30 pm/Regular Meeting-7:00 pm
Eric Higuchi submitted a new eComment.
Meeting: City Council Special Closed Session-4:30 pm/Regular Meeting-7:00 pm
Item: 15. TEMPORARY SUSPENSION OF AFFORDABLE HOUSING IN -LIEU FEE This report
is a follow-up to the December 5, 2023 City Council meeting where the City Council directed staff
to prepare resolutions for applicable policy options identified in the Mayor's Economic
Development Ad -Hoc Committee's recommendation list. This item is the implementation of the
policy option to, for a period of 36 months, temporarily suspend the affordable housing in -lieu fee
for residential projects located in the Downtown Commercial Core Specific Plan (DCCSP) and
Red Hill Avenue Specific Plan (RHASP) areas. The City Council will be asked for direction in
April for review of the current Voluntary Workforce Housing Program's (mid-term goal)
effectiveness and feasibility analysis to optimize rules consistency with the Housing Element,
evolving State laws, and economic consideration.
eComment: I am in support of the suspension of the affordable housing in -lieu fee. For one, we
need to consider the opportunity cost of our affordable housing policies. Only one new project
has been approved since the implementation of the affordable housing ordinance (The Hill and
Vintage at Old Town were submitted prior to the adoption of the ordinance). The Downtown and
Red Hill Specific Plans were drafted at great expense to the City, but they are failed policy
documents as evidenced by the lack of redevelopment. Compounded with the overall challenge
of entering into a bearish real estate market characterized by scarce housing, economic
infeasibility of new multifamily projects, and prices remaining high, the City should consider
policies that promote housing rather than policies that increase the cost of housing. Second, we
need to consider if the City has been a good steward of its affordable housing fund. City's can
effectively utilize their affordable housing in -lieu fees to generate one unit per $50K to $100K
when contributing funds to an affordable housing project utilizing low-income tax credits,
vouchers, and/or grants along with traditional financing. In other words, the $2,000,000
affordable housing grant dedicated to the Families Forward project could have generated at least
20 to 40 units of deed restricted affordable housing, not just 6 to 8. Further, the City has
significant land holdings where it has an obligation to provide affordable housing pursuant to the
Surplus Land Act, and allocating the affordable housing grant to a larger affordable housing
project would have made that future project more competitive when competing for low-income
tax credits. The City should also strongly consider the elimination of the on -site affordable
housing requirements for for -sale projects which are the most onerous in the County. On -site
affordable housing requirements for rental communities are economically viable due to the
availability of government subsidies and/or density bonus through state law. However, affordable
housing within for -sale projects are entirely subsidized by the builder. When required to build
housing deed restricted to low, lower, and extremely low income households (moderate levels
are economically viable), have a significant negative economic impact on developer returns but
marginal impact on the number of new, low income housing units. In the case of for -sale
housing, an in -lieu fee is far more beneficial to the community than requiring to provide on -site
housing, that is, if the accrued affordable housing funds are deployed responsibly.
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