Report calls on area cities to create more housing to ease county shortage

A rendering shows apartments and the retail area of the planned 350-unit Newport Crossings development in Newport Beach.
(Courtesy of Starboard Realty Partners)

Costa Mesa, Huntington Beach and Newport Beach each is projected to produce less than 5,000 units of housing in the next few decades, according to a report by the Orange County Business Council.

Cities should partner with local developers to create more housing for current and future residents; otherwise, the county’s existing shortage will get worse, said Wallace Walrod, chief economic advisor for the Business Council.

The Irvine-based nonprofit’s 86-page Orange County Workforce Housing Scorecard, released last week, uses data from several public and private sources, including the U.S. Census Bureau, Zillow and the California Department of Finance, to forecast and rank housing in Orange County.

The Business Council defines “workforce housing” as the infrastructure necessary to house the county’s current and future workforce across all industries, occupations and income levels. It takes stock of existing housing inventory and projects demand for additional housing needed to attract and retain employers.

Orange County overall faces a current housing deficit of more than 58,000 units, which is expected to spike to 115,000 by 2045, the report says. A shortage of affordable housing for teachers, nurses and firefighters was anticipated by the council’s first report in 2008.

Walrod suggested that cities redevelop vacant or underperforming retail space into mixed-use projects. He also advised them to keep an eye on Sacramento to take advantage of state funding and prevent possible complications for affordable housing.

However, proceeding with affordable housing has long proved difficult for some cities. Some zoning laws require amendments, some projects are delayed by requirements of the California Environmental Quality Act, and there’s pushback from some residents to keep their neighborhoods as they are.

In Huntington Beach, developer Tahir Salim recently appealed the Planning Commission’s denial of a plan to build 48 residential units at the northeast corner of Beach Boulevard and Ellis Avenue. The Elan Huntington Beach luxury apartments are across the street from the proposed site. Such high-density developments are criticized by residents who feel they strip the city of its beach-town charm.

In January, California sued Huntington Beach over what state officials described as the city’s failure to allow enough homebuilding to accommodate a growing population. The case is continuing.

The city put itself in a shortfall toward its state-mandated target for low-income housing units when the City Council in 2015 amended the Beach and Edinger Corridors Specific Plan. The amendments reduced the cap on new residential development from 4,500 units to 2,100 and imposed stricter height and setback requirements after many residents complained about the rate at which high-density residential projects were popping up. It also meant the city no longer had enough land zoned to accommodate low-income residents under state requirements.

“None of us are saying ‘Don’t build,’ but make sure whatever you’re building makes Huntington better,” Mayor Erik Peterson said.

The Orange County Business Council, he contended, is biased because it has “a lot of builder money.”

Business Council President and Chief Executive Lucy Dunn said via email that the report is based on data supplied by each Orange County city, including Huntington Beach, and that its methodology is transparent.

“Homes are where jobs go to sleep at night,” Dunn said. “The Scorecard challenges every city to plan for and approve housing for its workforce and natural population growth and not rely on other cities to cover their duty under California law.”

Peterson said Surf City has affordable housing and that he believes the free market should handle the demand for new housing. He rejected any idea that the city is pushing out people like firefighters, saying several police officers and other city employees live in Huntington Beach.

Costa Mesa Mayor Katrina Foley said there is a challenge to placing housing near job centers while maintaining the community’s aesthetic. She cited Irvine’s placement of housing near the Irvine Spectrum as an example of using available space successfully.

“That’s the challenge for built-out communities like Costa Mesa and Newport Beach,” Foley said.

Irvine was rated a high-performing city in the Business Council’s report.

In 2016, Costa Mesa voters approved Measure Y, which requires voter approval of development projects that necessitate a general plan amendment or zoning change and would add 40 or more dwelling units or 10,000 or more square feet of commercial space to what already exists.

Foley said the city has seen density put in the wrong location and building in very dense areas where there was already significant traffic congestion without any way to mitigate it. She said projects like the Plant, a residential-commercial development planned for the corner of Baker Street and Century Place that recently received Planning Commission approval, are “good models” for mixed-use developments.

In Newport Beach, the Planning Commission this year approved the 350-unit, five-story Newport Crossings near Birch Street and MacArthur Boulevard. Irvine-based developer Shopoff Realty Investments is spearheading Uptown Newport and the neighboring Koll Center Residences.

“Every city is really having to dig deep and see how it will comply with the state mandate,” Newport Beach Mayor Diane Dixon said. “We will comply, we always comply, and we have to figure it out somehow.”