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Home My WebLink About14 - 2014-2021 Housing Element Update Correspondence"RECEIVED AFTFP AGENDA Rieff, Kim PRINTED:" 5, 1871.— — From: City Clerk's Office Sent: Tuesday, May 14, 2013 4:14 PM To: Rieff, Kim Subject: FW: Comments on Newport Beach 2014 -2021 Draft Housing Element Attachments: Ltr NB CC Draft HE 2014 -2021 13.5.14.PDF From: linda tang Sent: Tuesday, May 14, 2013 4:13:58 PM (UTC- 08:00) Pacific Time (US & Canada) To: City Clerk's Office Cc: Ibates(d)hcd.ca.gov; Christian Abasto; Cesar Covarrubias; Whelan, Melinda; Murillo, Jaime Subject: RE: Comments on Newport Beach 2014 -2021 Draft Housing Element Dear City Clerk Brown, Please find attached the Kennedy Commission's comments regarding tonight's City Council Public Hearing on Agenda Item #14- 2014 -2021 Housing Element Update (PA2012 -104). Thank you for your help. Sincerely, Linda Tang The Kennedy Commission 17701 Cowan Ave., Suite 200 Irvine, CA 92614 p: (949) 250 -0909 f: (949) 263 -0647 www.kennedvcommission.oria May 14, 2013 The Honorable Mayor Keith Curry, Mayor of Newport Beach and Members of the Newport Beach City Council City of Newport Beach 100 Civic Center Drive Newport Beach, CA 92660 RE: Comments on Draft 2014 -2021 Housing ]Element Update (Malrch 2013) Dear Mayor Curry and Members of the City Council: www1ennedycommission.org 17701 Cowan Ave., Suite 200 Irvine, CA 92614 949 250 0909 Fax 949 263 0647 Thank you for the opportunity to review and comment on the City of Newport Beach's 2014- 2021 draft Housing Element. We have reviewed the draft and are submitting this letter to provide public comments. The Kennedy Commission (the Commission) is a broad based coalition of residents and community organizations that advocates for the production of homes affordable for families earning less than $20,000 annually in Orange County. Formed in 2001, the Commission has been successful in partnering and working with jurisdictions in Orange County to create strategic and effective housing and land -use policies that has led to new construction of homes affordable to lower income work -force families. The Commission would like to acknowledge and commend the City for its leadership in encouraging and facilitating the development of homes affordable to lower income families. The Commission supports the Planning Commission's decision on April 18, 2013 to continue the implementation of Housing Program 2.2.1, which will set -aside 15 percent of all new homes to be affordable to very low -, low- and moderate - income households. Housing Program 2.2.1 will be a key and effective tool for the City to increase affordable home opportunities and achieve it's housing goals for lower income working families, especially in the John Wayne Airport area. In the draft Element, the City identified the John Wayne Airport area as having the "greatest potential" in accommodating homes affordable to lower income families 2 As the City moves forward with the draft Housing Element update, the Commission urges the City to continue it's support for the development of affordable homes. Although the City has a total Regional Housing Needs Assessment (RHNA) of two for very low- and low- income households, it is important to note that the RHNA is not a maximum ceiling for future development in the City. As indicated in the City's draft Housing Element and staff report, the RHNA does not reflect or address the existing housing needs for lower income working families and special needs residents living in the City. City of Newport Beach General Plan Housing Element, Draft 1 March 2013, p. 5 -131, March 2013. ' City of Newport Beach General Plan Housing Element, Draft 1 March 2013, p. 5 -75, March 2013. ' City of Newport Beach City Council Staff Report, Agenda Item 14- 20144021 Housing Element Update (PA20.12.104j p. 6, May 14, 2013. Mayor Curry and Council Members May 14, 2013 Page 2 of 3 Compared to other cities in Orange County, housing costs are significantly higher in Newport Beach. Although, the economic downturn has allowed home prices to be at an all -time low, many lower income working families were still not able to purchase a home in the City (home prices in Newport ranges between $760K to $2.4 million) and they remain as renters; however, as the current for -sale housing market is bouncing back, rental costs are unfortunately on the rise. In Newport Beach, the current 2013 rent for large apartment complexes averaged $2,316 per month and in comparison, the average mortgage for all homes sold in Orange County was $2,028 a month.5 In addition, the City's rent increased by 9.2% from the year before and had the second biggest percentage increase in the County.6 With wages that are not keeping up with rising rents, many renting families continue to struggle financially to live and work in this City. The Commission has provided the following recommendations for the City: 1. To continue it's partnership with the Commission to facilitate the development of affordable rental homes for lower income working families in the City. 2. To continue the implementation of Program 2.2.1. A specific finding should be made by the City Council that Program 2.2.1 is an important and effective tool in the City's Housing Element to ensure the success of developing new affordable homes for lower income working families. 3. To prioritize new construction of affordable homes for lower income families in the John Wayne Airport Area through the utilization of in -lieu fees and other housing funds. 4. To continue to monitor and negotiate the preservation of affordable homes that are at risk or have affordability covenants that are set to expire during the 2014 -2021 planning period. Conclusion Given the importance of the draft 2014 -2021 Housing Element update, the Commission welcomes the opportunity to continue our dialogue on how we can partner with City staff to ensure that the draft Housing Element includes specific policies that will result in new affordable homes for extremely low, very low and low- income working families. 4 City of Newport Beach City Council Staff Report, Agenda Item 14- 2014.2021 Housing Element Update (PA2012 -104), p. 6, May 14, 2013. 'Newport Rents Climb $195 a Month, Report Says, orange County Register, May 2, 2013. 6 Newport Rents Climb $195 a Month, Report Says, Orange County Register, May 2, 2013. Mayor Curry and Council.Members May 14, 2013 Page 3 of 3 Please keep us informed of any revisions, updates and meetings regarding the draft 2014 -2021 Housing Element and if you have any questions, please free to contact me at (949) 250 -0909 or cesarc@kennedycommission.org. Sincerely, _...' esar Covarrubiass Executive Director cc: Lisa Bates, California Housing and Community Development Department Christian Abasto, Public Law Center Rieff, Kim From: City Clerk's Office Sent: Tuesday, May 14, 2013 12:23 PM "RECEIVED AAFTFP AGENDA To: Rieff, Kim PRINTED:" 4tr/ Subject: FW: Letter for Agenda Item #14 Attachments: 2013 -05 -14 Newport Beach - Inclusionary Zoning.pdf 6 From: Victor Cao Sent: Tuesday, May 14, 2013 12:20:23 PM (UTC- 08:00) Pacific Time (US & Canada) To: City Clerk's Office Subject: Letter for Agenda Item #14 Dear Ms. Brown, We would like to submit a letter regarding Agenda Item #14 2014 -2021 Housing Element Update (PA2012 -104) for the May 14 City Council meeting. Can you please copy the following: • Mayor Curry • City Council • David Kiff, City Manager • Kimberly Brandt, Community Development Director Thank you for your time and service. Sincerely, Victor Cao Government Affairs Manager BIA of Southern California, Orange County Chapter (949) 553 -9500 x120 office (714) 202 -7122 mobile May 14, 2013 Mayor Keith Curry City Council City of Newport Beach 100 Civic Center Newport Beach; CA 92660 Re: Support for Staff Recommendation 2(b) Removal of the Housing Element's Inclusionary Housing Ordinance Dear Mayor Curry, On behalf of our membership, we would like to thank city staff for their invitation to the 2013 Housing Element meetings. After careful review of the proposed housing element update, we support staff recommendation 2(b) for the removal of the Housing Element's Inclusionary Housing Ordinance. The Building Industry Association of Southern California, Orange County Chapter (BIA /OC) is a non- profit trade association of nearly 1,000 companies employing over 100,000 people affiliated with the home building industry. The Orange County Chapter represents the largest member base within BIA Southern California. Our mission is to champion housing as the foundation of vibrant and sustainable communities. We recommend the elimination of the inclusionary housing mandate and in -lieu fee based on the following points: 1. Outdated Ordinance - The inclusionary zoning mandate was established with the "intent of achieving the City's Regional Housing Needs Assessment construction goals.... "' Under the same premise, the ordinance is no longer applicable. The 2013 Housing Element reports that a total of five units are necessary to meet the City's RHNA goals .2 The City currently has numerous resources to produce the required units, conduct rehabilitation projects, and extend existing covenants without a mandatory inclusionary zoning ordinance. Additionally, there is a projected balance of $5.5 million in the affordable housing fund that could extend existing affordable covenants or potentially result in 40 new affordable units or more. 2. Inclusionary Zoning Policies Lack Nexus - As a matter of public policy, mandatory inclusionary requirements do not meet the same standards that other development impact fees are subject to pursuant to the Mitigation Fee I Resolution No. 2010 -44 2 5 -44 Newport Beach General Plan Housing Element Update Draft 1. March 2013. Orange County Chapter Building Industry Association of Southern California 17744 Sky Park Circle Suite 170 Irvine, California 92614 949.553.9500 fax 949.769.8943 www.biaec.com PRESIDENT DAVE BULLOCH STANDARD PACIFIC HOMES VICE PRESIDENT DONNA KELLY LENNAR TREASURER JOAN MARCUS- COLVIN THE NEW HOME COMPANY SECRETARY BRIAN GEIS BROOKFIELD HOMES IMMEDIATE PAST PRESIDENT MICHAEL McCANN ALLIANCE RESIDENTIAL TRADE CONTRACTOR COUNCIL TOM RHODES TWR ENTERPRISES ASSOCIATE VICE PRESIDENT MARK HIMMELSTEIN NEWMEYER 8 DILLION, LLP MEMBER -AT -LARGE MIKE WINTER SARES -REGIS GROUP MEMBER -AT -LARGE JIM YATES RANCHO MISSION VIEJO CHIEF EXECUTIVE OFFICER MICHAEL BALSAMO Act'. Under the Act, a fee must have a rational relationship in its amount to the failure of the market -rate development to provide inclusionary units. The City's mandatory inclusionary zoning ordinance requires that for every 100 market -rate homes, 15 homes will be sold below market -rates and, in some cases, at a loss. As an example, it is readily apparent how new residents may proportionally impact traffic or park service levels. On the contrary, there is no evidence to show that production of new residential housing causes a reduction in affordability. In fact, mandatory policies indirectly increase the cost of market -rate housing. With the current inclusionary program, homebuilders and indirectly new residents are double -taxed to subsidize affordable housing projects. Should the City have a legitimate interest in subsidizing affordable housing production, we would expect an equitable and broad government response to that goal. 3. Housing Production is the Key to Affordable Housing — California is ranked #3 in the nation for the highest housing prices. This is largely due to 1) lack of adequate housing stock, 2) a jobs to housing imbalance in coastal areas, and 3) lack of available land coupled with excessive regulation on the housing industry. Policies that support the production of housing allow for fundamental economic principles of supply and demand to occur. In Newport Beach, 8 out of 11 affordable housing projects were implemented with tools normally found in voluntary programs. Market -based programs are viable alternatives to the inclusionary mandate. 4. Housing Element Submission is Unaffected by Removal of Inclusionary Zoning — Multiple letters from the Department of Housing and Urban Development indicate that an inclusionary housing mandate is not a requirement for the approval of a jurisdiction's housing element. State law does require jurisdictions to provide incentives for voluntary affordable housing development. The submission of the Housing Element would be uninhibited and consistent with over two- thirds of the cities in Orange County that do not have inclusionary zoning ordinances. 5. The City of Newport Beach Maintains Local Control — Elimination of the mandatory inclusionary requirement in Newport Beach does not prevent the City from negotiating alternative housing solutions with the business community on a case -by -case basis. 6. BIA Remains Open to Alternative Solutions to Affordable Housing — BIA is in the process of preparing a policy document for jurisdictions who seek to implement voluntary affordable housing programs. BIA /OC remains a resource to you and your staff on housing - related issues. BIA /OC's members include non - profit affordable housing developers, policy experts, land -use attorneys, and staff. The inclusionary zoning requirement is a very significant issue for our membership because of its negative impact on housing production and affordability. We offer our sincere support in forming policies that would benefit the residents of Newport Beach. For these reasons, we request the consideration of removal of the inclusionary zoning mandate and in -lieu fee from the 2013 Housing Element update. 3 CAI. GOV. CODE Section 66016 Thank you for your time and thoughtful consideration. Respectfully, Michael Balsamo Chief Executive Officer Cc: City Council David Kiff, City Manager Kimberly Brandt, Community Development Director