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The City Council approved the Affordable Housing Ordinance at the regularly scheduled August 6, 2024, meeting.  A copy of the Agenda Report and approved Ordinance can be found at the below link:

Approved Affordable Housing Ordinance and Agenda Report https://costamesa.legistar.com/LegislationDetail.aspx?ID=6816039&GUID=25853D49-9834-48F6-AA12-8841A927FF9A&Options=&Search=

Background

In 2021, the City compiled a community housing characteristics report. This report found that approximately 47-percent of the Costa Mesa community earns a lower income and approximately 29-percent of the community qualify for very low or extremely low-income housing. Based on housing prices, lower income households cannot afford to own or rent in Costa Mesa without experiencing overpayment.

Concurrently, the City Council adopted a Strategic Plan identifying five key goals to address specific community issues and needs. One of the Council’s Strategic Plan goals is to “diversify, stabilize, and increase housing to reflect community needs.” To address this goal, the City Council also identified several strategic objectives and priorities. One of the Council’s priorities included considering a draft affordable housing ordinance (also referred to as an inclusionary housing requirement).

Housing Element Requirements 

In addition, in 2022 the City adopted its 2021-2029 Housing Element. The Housing Element is a housing policy document and articulates the City’s housing long term goals. It also identifies over 40 programs that work together to form a cohesive and comprehensive housing strategy to address housing needs in Costa Mesa. One of the Housing Element goals (Housing Goal #2) is to “facilitate the creation and availability of housing for residents at all income levels and for those with special housing needs.” To that end, Program 2A calls for the City to consider adoption of an affordable housing ordinance. An affordable housing ordinance, if adopted, would generally require new housing projects in the City to provide a certain percentage of its housing units as “affordable” units for moderate, low, and/or very low-income households.

Developing the Affordable Housing Ordinance 

The City retained expert consultant, Keyser Marston Associates Inc. (KMA), to prepare a Financial Evaluation in order to evaluate and make policy recommendations for a potential ordinance, including the affordability percentage “set aside” requirement, the potential for an in-lieu fee option, and other factors.

Public Review Process

Public participation is crucial to the inclusionary housing process. The following public hearings were held in association with the Affordable Housing Ordinance:

  • December 11, 2023 - Planning Commission
  • January 16, 2024 - City Council Public Hearing
  • April 2, 2024 - City Council Public Hearing
  • June 18, 2024 - City Council Public Hearing
  • July 16, 2024 - City Council Public Hearing

In addition to public hearings, study sessions were also held.

Joint City Council and Planning Commission Study Sessions

On May 16, 2023 and July 26, 2023, the City Council and Planning Commission conducted a joint study session to review and discuss the major components of an affordable housing program, legal requirements, compliance options, policy considerations, and industry best practices.

A comprehensive overview was presented by the City’s consultant Kathe Head with KMA. The overview included the following topics:

  • Income and affordability considerations;
  • Program standards: threshold size, target affordability level, covenant periods, and alternative compliance options;
  • Review of draft prototypes for both rental and ownership housing projects;
  • In-lieu fee payment considerations and other fulfillment options; and
  • Overview of key issues and policy decisions.

The study session agenda reports and meeting videos are included in the links below:

Draft Financial Evaluation

KMA completed the first draft of the Financial Evaluation which is available at the link below:

In addition, KMA prepared a memorandum with policy recommendations on the inclusionary housing program standards which is included in the link below:

 

Subsequently, KMA prepared a Supplemental Analysis to the July 2023 Financial Evaluation which is available at the link below:

 

Planning Commission Meetings

On November 13, 2023, a draft content for the proposed Affordable Housing Ordinance prepared by staff was presented to the Planning Commission for review and public comment.

The November 13, 2023 Planning Commission agenda including staff report, attachments, and public comments are included in the link below:

Planning Commission voted 4-0 (Commissioner Rojas, Commissioner Klepack, and Chair Ereth were absent) to continue the item to a date certain at their regular meeting on December 11, 2023.

On December 11, 2023, the Planning Commission Voted 5-2 to recommend City Council give first reading to the Affordable Housing Ordinance.

 

Questions?

For questions or to provide your input to City staff, please contact planning staff at planning@costamesaca.gov.