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16 Susana Barrios From:Cesar C <cesarc@kennedycommission.org> Sent:Tuesday, August 20, 2024 5:05 PM To:Ashleigh Aitken; Public Comment Cc:McDougall, Paul@HCD Subject:\[EXTERNAL\] Item 16 - 8/20/24 Anaheim Affordable Housing Policy Discussion Attachments:AH Discussion 8.20.24.docx You don't often get email from cesarc@kennedycommission.org. Learn why this is important Warning: This email originated from outside the City of Anaheim. Do not click links or open attachments unless you recognize the sender and are expecting the message. Please see the Kennedy Commission's comment on item 16 - City of Anaheim Affordable Housing Policy Discussions. -- Cesar Covarrubias Executive Director 1 www.kennedycommission.org 17701 Cowan Ave., Suite 200 August 20, 2024 Irvine, CA 92614 949 250 0909 Honorable Mayor Aitken Anaheim City Council City of Anaheim 200 S. Anaheim Blvd. Anaheim, CA 92805 RE: City of Anaheim Draft Housing Element May 16, 2024 Item 16 - Discussion of Affordable Housing Policies Mayor Aitken and Councilmembers, 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 $30,000 annually in Orange County. Formed in 2001, the Commission has been successful in partnering and working with Orange County jurisdictions to create effective housing and land-use policies that have led to the construction of homes affordable to lower-income working families. We are writing today to comment on the City of Anaheim’s discussion of Affordable Housing Policies and 2021-29 Housing Element commitments. We request that the City strengthen its proposed affordable housing policies, programs and opportunity sites identified for lower income needs in their 6th Cycle Housing Element draft to ensure that the City will effectively produce affordable housing at the acutely low, extremely low, very low-, and low-income level. This is important, since in the 2014-2021 Housing Element Planning Period the city’s plans and programs failed to facilitate the necessary affordable units to meet the needs of the low and very low-income residents in Anaheim. The city’s lack of affordable housing policies and programs led to a robust housing production that greatly exceeded the above moderate-income level of RHNA, but resulted in minimal production of lower income housing that only met a fraction of the city’s lower income housing needs. In addition, the lack of affordable housing policies led to th a deficit of affordable housing sites for lower income RHNA in the 5 cycle, since market rate housing was developed on affordable housing opportunity sites. In the current 6th cycle planning period, the city has a RHNA of 3,767 units for very low households. While the City continues to work on its income and 2,397 units for lower income RHNA goals, it has been prioritizing Above Moderate over Low and Very low families housing needs. The City’s current progress is 1,175 units for above moderate and only 137 deed restricted units for Very Low and 18 deed restricted units for Low (Anaheim 2023 Housing Element Annual Progress Report). The majority of these very low-income units are special needs housing for those formerly homeless as Permanent Supportive Housing. 1 The Kennedy Commission Recommendations for Affordable Housing The Commission recommends that the City adopt new affordable housing priorities and policies that will help develop affordable housing for the City’s lower income families and create balanced housing opportunities in the city. The Commission has the following policy recommendations as part of their 6th RHNA cycle: Inclusionary Housing Ordinance - To ensure that housing is being equitable and meets the 1. current and future needs of Anaheim’s residents, The Commission strongly recommend the city adopt an Inclusionary Housing Ordinance that requires of units in all citywide residential 20% project be . set aside for extremely low (7.5%), very low (7.5%), and low-income levels (5%) This ordinance will help the city create a balanced housing development along with market-rate housing that has been successful in cities such as Santa Ana and Irvine. We recommend that the Inclusionary Housing Ordinance should be implemented no later than six months from the adoption of the 6th Cycle Housing Element. City-Owned Sites and Housing Authority/Successor Agency Site - The City has committed 2. to rezoning the 14 locally owned sites by December 2025 but has identified 392 residential units consisting of . 98 affordable units, 286 moderate income units, and 8 above moderate units The Commission recommends that sites owned by housing authorities and successor agencies should be exclusively developed for extremely low, very low-, and low- income housing. Moderate and above moderate housing units are appropriately being addressed by pipeline projects and market developers. Not using these 98 sites to maximize affordable units would be a huge, missed opportunity and would not assist developments that are 100% affordable, since the cost of land and market rate development is one of the biggest impediments to affordable housing development. Rezone Policy Actions to Accommodate Lower RHNA Capacity (Site Rezoning): 3. The city should ensure that proper zoning is implemented as well as a program that will encourage the production of affordable housing to meet the needs of lower income residents on identified opportunity sites. The City must rezone identified sites for affordable housing to meet site capacity for low, very low, extremely low, and acutely low-income households immediately. As part of the 6th housing cycle, the City must adopt a by right rezoning program to accommodate lower income needs. The program should include at least 20% of units affordable to low, very-low, extremely low income, and acutely low-income residents. The program should also accommodate a minimum of 16 units per site, a minimum density of 30 units per acre, and meet the lower housing needs amongst opportunities in residential and mixed-use projects. The rezone program needs to apply to all sites identified for rezoning, all sites identified and being reused from the 5th cycle and sites proposed to adopt a new zoning code change to accommodate lower income housing needs. Platinum Triangle Master Land Use Plan (PTMLUP): 4. City owned sites also must be identified within the Platinum Triangle Master Use plan to prioritize affordable housing developments. Since the creation of the PTMLUP in 2004, the city 2 has approved over 12,642 market rate luxury housing units within the plan and no affordable housing has been created in the Platinum Triangle. The city needs to prioritize affordable housing policies in developments in the Platinum Triangle and the city-owned land in the Angel stadium to support Housing Production Strategy 1G to ensure significant affordable housing production in this city-owned land, prioritizing affordability at the low, very-low, extremely low, and acutely low-income levels. Residential Opportunities (RO) Overlay Zone - Housing Production Strategy 1J creates 5. the perfect opportunity for the city to create housing units necessary for fulfilling its RHNA goal. With 12,885 units projected to be created, we believe that it is imperative for the city to use the opportunity to create incentives on the RO Zone to create 100% affordable units such as implementing: a.Density Bonus Fee waivers/reductions b. c.Expedited Review of 100% affordable housing sites on the Residential Overlay Zone. SB 4 Affordable Housing on Religious Land - The Passing of SB 4 in 2023 allows by 6. right. development of affordable housing on faith and church sites. The city should help promote and facilitate affordable housing development on religious sites. This approach addresses housing shortages and long-term affordability, while also creating partnerships between religious organizations and developers. It is a collaborative effort to meet the city’s needs by creating more affordable housing. With the implementation of SB4, the Commission is open to partnering with the city to provide mapping of church sites and religious organizations that have the potential to develop affordable housing. Surplus Land and City owned Land - Planning for the use, lease, or sale of public 7. land for affordable housing should be a priority. The strategies from this can take on many forms: a.Identifying suitable sites for affordable housing and making them available at a subsidy to developers and preparing sites for development. Implementing a local ordinance that aligns with SB 4 and the Surplus Land Act. b. c.Disposing sites at market price and using the proceeds to support other affordable housing Efforts. Affordable Housing Development Fee: 8. The Commission recommends that if the city elects an affordable housing fee program it should consider the following: 3 -The policy should be part of a comprehensive approach to address the production of affordable housing in sites identified to create affordable housing, such as implementing an Inclusionary Housing requirement as outlined above. -An in-lieu fee instead of affordable housing should help the city achieve the affordable housing opportunity not realized on the sites. The fee needs to be calculated based on the true cost to develop affordable housing units and other financial and market factors. The affordable housing fee the City is exploring in Program 1A(i) and 1(ii) is not strong enough to produce the amount of affordable housing needed by Anaheim residents. Given the high cost of land, market rate housing competing for the same sites, construction cost, and the land use and zoning limitations on where affordable housing can realistically be developed, funding generated from this fee would likely have limited success. -The proposed fee does not clearly focus on evaluating and quantifying the lost opportunity to create affordable housing on these opportunity sites and actual cost to develop affordable housing elsewhere. -The fee should be in the range of $15,000 - $40,000 per unit to allow the city to leverage state, federal and other affordable housing funds and be able to develop 100% affordable housing developments. -Establish a mechanism for the regular review from community stakeholders and nonprofits of how the funds from the Housing Trust Fund are being utilized and adjustment of the Affordable Housing Development Fee to reflect changes in the housing market and development costs. -Expedite implementation timeline by December 2024 and target the development of housing units for Anaheim’s low and very low-income households. - -Following the HR&A recommendations the City should establish a Housing Trust fund to administer its Affordable Housing fee and leverage additional federal, state, and local funding for the creation of affordable housing. As analyzed, one of the biggest issues in the lack of production of affordable housing in Anaheim is that market rate housing has been developed on affordable housing opportunity sites leading to a deficit on opportunity sites for affordable housing. This proposed fee will continue to prioritize market rate housing on opportunity sites and not prioritize lower income affordable housing. An in-lieu fee should be studied and implemented no later than December 2024 of the 6th-Cycle Housing Element. We recommend that the fee be utilized specifically for the creation of new affordable housing units for low, very-low, extremely low, and acutely low-income families. We look forward to working with the City of Anaheim to encourage effective housing policies that will help create balanced housing development and create much-needed affordable housing in our local communities. If you have any questions, please feel free to contact me at (949) 250- 0909 or cesarc@kennedycommission.org. Sincerely, 4 Cesar Covarrubias Executive Director Cc: Mr. Paul McDougall, Senior Project Manager, CA HCD 5