Laguna Beach church reworks, scales down affordable housing project

Neighborhood Congregational Church in Laguna Beach has scaled down considerably a proposed affordable housing development on its property, project leaders said in an update provided Wednesday in a Zoom call with local news outlets.

The original proposal for the project was for a 72-unit development. More recently, it had seen a reduction to a 44-unit proposal that would have resulted in the demolition of both buildings, replacing them with a spiritual center.

It now calls for the construction of 28 residential units and one for an on-site manager, said Pastor Rod Echols, who added it could potentially provide the opportunity to “rejuvenate” both of the existing buildings on the campus, Bridge Hall and the church’s sanctuary.

Bill Witte, founder and chairman emeritus of Related California, which is the partnering development firm with the church, said that a fully-affordable housing project was always going to be dependent on the availability of public funding.

“What would determine the amount of affordable housing here, in addition to the land-use and neighborhood considerations, … was the availability of public funds, because 100% affordable housing, wherever it’s done, doesn’t work in the market,” Witte said. “It needs additional public funds to fill the financial gap between what you would be able to finance with market-rate housing and income-restricted affordable housing. …

“The 28 affordable [units], plus the on-site manager’s unit, is what we’ve arrived at that both continues the land-use considerations that we’ve discussed previously with the neighborhood, but also the realities of how much money could be available from the state and the city to make this happen.”

Half the units will need to be two- and three-bedroom units to compete as a family housing project for low-income housing tax credits, Witte said. The other half will be studio and one-bedroom units.

The affordable housing project may house a combination of families and seniors, with income eligibility ranging from $35,550 to $125,940, based on Orange County median income adjusted for household size.

Rents will range between $888 and $2,640 per month. Priority will be given to prospective income-eligible tenants who work in Laguna Beach.

As currently proposed, the project would place a two-story building on the church’s existing parking lot. The structure would be built over one level of subterranean parking that would have 41 spaces. Approximately 30 of those spaces would be dedicated to residents, while the remainder would be made available for public parking.

Other improvements would include sidewalk widening along Catalina Street to the north and Glenneyre Street to the south, as well as a community plaza and green space.

Witte, a 32-year resident of Laguna Beach, noted efforts have been made to address community concerns, including density, the appearance of the buildings as pertains to fitting the character of the neighborhood, and their impact on views from nearby homes. He said the units would be lower in height than the existing buildings.

Laguna Beach must zone for 198 affordable units within the current cycle, and the church offered to work with the city five years ago, Echols said. The church site is the only one that the city has formally identified for affordable housing as part of its housing element, Witte noted.

An application for entitlements was submitted to the city in December, said Witte, who added he is hopeful that the project will be considered at a public hearing by the end of March. That timeline, he said, “would enable us to apply to the state for the so-called 9% tax credit, the more valuable tax credit, in April.”

To compete for tax credits, Witte said, a project must be close to community services and amenities. He referred to the church’s location as a “caricature of a perfect site” from a planning perspective, noting that it is walking distance from a supermarket, the high school and the downtown area.

If approved by June for a tax credit allocation, Witte said construction could begin by the end of this year, and it could be completed by early 2028. Project leaders will also be requesting money from the Laguna Beach City Council to fill a financing gap.

“What Senate Bill 4 requires is that the city deal with this in a 90-day period,” Witte said. “It can’t just go on and on. That’s what the law says, but we are acting as if there is no ministerial approval. We’re not cutting back on discussions with neighbors or anything like that, and because we’re asking the city for funds, that is a discretionary approval, the funding part.

“I don’t mean to be argumentative here, but if the city were to turn down the funds, there will be no project, notwithstanding any land-use approval.”

Laguna Beach received $2.5 million in grant money from the state’s local housing trust fund program. The award, which was announced in December, requires the city to match those funds. The city plans to allocate the money from its housing and housing-in-lieu funds.

In its grant application, the city identified the church site as a potential affordable housing project, although the grant money and city funds have not been formally committed.

“Providing more affordable housing for seniors, artists, and the local workforce is vital to maintaining a vibrant community,” Councilman Bob Whalen said in a statement upon receipt of the grant. “Affordable housing funding is more competitive than ever and requires diligence, persistence, and a willingness to pursue every available avenue, so we are very grateful to have been selected for this grant.”

The reworked project provides an opportunity for the church to continue hosting the Montessori School, an early childhood education program that has been offered there since 1975.

“That’s a relationship that goes over 50 years ago, which has really been enduring, and really strong, very consistent,” Echols said. “When it comes to mission, their intent to serve young folks, to really give them the tools they need to be contributing members of our society, that goes hand in hand with our desire to be civic partners and community leaders, not just internally, but to extend it forward as a benefit to the wider community.”