State targets housing costs

NEWPORT BEACH — Seldom do the words "affordable housing" and "Newport Beach" appear in the same sentence.

Despite state laws intended to encourage more affordable housing, it's likely to stay that way as the City Council discusses ways to reuse the current City Hall site.

Planners presented preliminary ideas for senior apartments there — a way to meet state affordable housing requirements — but some council members and residents have opposed affordable housing for seniors. They say it wouldn't be lively enough to rejuvenate the dormant Lido Village.

"I'm less concerned that we provide affordable housing than we provide an economically vibrant gateway to the [Balboa] Peninsula," said Councilman Keith Curry.

With some of the highest housing costs in the country, Newport Beach is unaffordable to many of its workers and residents. A city report found that 22% of households are unable to make rent at most apartments in the city, and might be forced into mobile homes or subsidized apartments if they had to move.

State law may push the city to consider affordable apartments at the site, experts said.

The city is required to plan for the development of 1,914 affordable housing units before 2014, according to the city's 2010 Housing Element.

Also, if the site is deemed "surplus land" then the city may have to give affordable housing developers priority there — to either lease the land or buy it. Most council members said they wanted to retain ownership.

"It would be an opportunity for the city to meet its requirements," said Cesar Covarrubias, executive director at the Kennedy Commission, an advocacy group for affordable housing in Orange County.

Typically, the city would have to offer incentives for a developer to build affordable units on private land, such as waiving fees or funneling reserves taken from market-rate developments.

"This site is a city-owned site and they have a lot more control," Covarrubias said.

Affordable housing levels in Newport Beach are based on the median income in Orange County, which is about $86,000. A family of four making $74,000 would fall into the lower-income range.

Often cities plan senior housing to satisfy state requirements because it is more palatable to neighbors, said Julie Spezia, executive director of Housing California, a Sacramento nonprofit housing advocacy group.

"It's often a soft path that planners like to go to because they think they'll have less of a battle on their hands," she said.

But even senior housing appears to have hit a road block in Newport.

Linda Klein, a Lido Isle resident who said she has worked in the senior care industry, spoke out against affordable senior housing at last week's council meeting. She said she would like to see luxury apartments or luxury condominiums.

"The residents of these [luxury] places would make good customers for up-market restaurants, up-market shops and an up-market or specialty grocery store," Klein said.

The council is looking to spur economic activity and revenue from the 4-acre parcel when City Hall vacates the land for a new $123-million Civic Center across town. During its last study session, the council narrowed the options to a community center, a public plaza with a canal, and some sort of housing development.

Some of the council members said they wanted to maximize revenue at the site, and appeared interested in housing for a mix of ages, not just seniors.

Affordable family housing and affordable senior housing generate about the same amount of economic activity, according to a study by the National Assn. of Home Builders. The typical senior affordable housing community with 100 units — the number considered at the City Hall site — would generate about $2.3 million in local income each year, based on a multiplier effect, and nearly $400,000 in government taxes and revenues, it found.

A similar affordable apartment development, but for families, would generate $2.4 million and $440,000 in taxes and revenues.

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