Executive Faults Irvine Housing Plan
The city of Irvine’s controversial plan to require 10% of all new housing to be priced for very-low-income families could squeeze out the middle class, the city’s biggest developer warned Tuesday.
Ray Watson, vice chairman of the Irvine Co., made his prediction hours before the City Council’s scheduled final vote Tuesday night on the affordable housing plan.
The plan would require 10% of all new housing to be priced for families earning up to 50% of the county’s median income, or about $24,000 for a family of four. City officials and developers have said that such housing would have to be built as rental apartments because it would be impossible to sell homes affordable to that income group.
The plan also would set up a program to establish fees to be paid by businesses because they bring employees into the city who require housing. The money would be used to help generate additional low-priced housing, above the 10% requirement.
The city’s plan would be the most stringent in the county. Originally, the council had considered requiring developers to set aside 30% of all future housing for three income groups below the county’s median. But after several months of hearings, the council revised the figure to focus only on the lowest income category, where the affordable housing problem is considered the most severe.
In an informal press conference Tuesday before the anticipated council action, Watson said the council’s requirement ignores the true cause of the housing shortfall--the imbalance between supply and demand.
More and more jobs are being created in Irvine while developers are not allowed to build enough homes for them, he said. The imbalance also was pointed out as the root problem by a consultant hired by the city, Watson said.
“They want to slow growth, while the jobs keep coming,” Watson said. And, he added, the city’s plan holds the home builders responsible for coming up with the solution to the housing shortfall, which they did not create.
With the costs of land and construction, Watson said, the only way that a developer can price apartments low enough is to make other homeowners and renters pay more. While the housing plan may sound as if developers will foot the bill, “the public is going to pay for it,” he contended.
The result will be that the low-income families will be able to afford the subsidized apartments and the rich will be able to afford the high-priced homes, but everyone in between will be priced out, he said. “Essentially, what you’re doing is driving out the middle class,” he said, adding that this is already happening in San Francisco.
“Irvine, if it is to be anything . . . needs to make its effort to be a place where everyone can live,” Watson declared.
But city senior planner Maya Dunne said she saw no threat to the middle class.
“That depends on what the Irvine Co. does in developing types of housing,” she said. “Ninety percent of the units are wide open for the Irvine Co. to decide what to do with.”
Watson said that low-priced housing used to be easier to provide, when federal programs provided subsidies. But in recent years, “housing has ceased to be a priority for this country,” he added.
He said the Irvine Co. and city officials have not been adversaries during negotiations on the housing plan, adding that his company shares the concern over the need for affordable housing. “The point we have great difficulty with is who pays for it,” he said. “It is easier to advocate this,” Watson said of the city officials’ arguments, “when you can sweep that under the rug.”
He said the Irvine Co. would prefer that the city set a goal--not a requirement--for low-priced housing, as well as set a goal to lessen the jobs-housing imbalance.
He added that he would like the city to establish a housing authority to find less expensive and “creative” solutions to the problem. He said the Irvine Co. is not opposed to linkage fees but feels that the money should be used to defray costs for the required 10% of low-priced apartments.
