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CITY COUNCIL AGENDA REPORT
City of Anaheim
OFFICE OF THE CITY MANAGER
DATE: AUGUST 20, 2024
FROM: OFFICE OF THE CITY MANAGER
SUBJECT: DISCUSSION OF AFFORDABLE HOUSING POLICIES
ATTACHMENT (Y/N): YES ITEM # 16
GOVERNMENT CODE § 84308 APPLIES: NO
RECOMMENDATION:
That the City Council receive an update on the status of affordable housing policies and provide direction regarding any further desired actions.
BACKGROUND
Mayor Aitken, under her authority, has requested that staff bring forth this item at this time.
In late June 2023, the City Council directed staff to begin the process of identifying a qualified consultant to provide guidance to the City on programs, policies, and other possible techniques to advance the production of affordable housing in Anaheim.
Following a competitive process, staff selected HR&A to complete this work. A draft of the HR&A report was transmitted to all members of the City Council in late February 2024 via memo and the final report was presented at the City Council meeting of March 26, 2024. The report provides information on land use policies, financing tools, and other programs utilized by similarly situated jurisdiction and considered best practices
To inform the public discussion, staff prepared a comparison chart outlining current affordable housing policies in Anaheim with the strategies contained in the report. This review revealed that the city has taken significant action to address affordable housing needs in Anaheim. However, there are policies that could be further considered such as Incentive Zoning (IZ) policies. Affordable housing policies of this nature require and/or incentivize developers to include affordable homes as part of market rate developments, often in exchange for incentives such as density bonuses, tax abatement, fee reduction or waivers or expediated reviews. The HR&A report provides information on pros and cons associated with such policies (Attachment 1 - see page 14 of the report).
Current Policy
In 2018, the work of a prior Affordable Housing Ad Hoc group led to the recommendation of a voluntary program.
As recommended, on August 14, 2018, the City Council adopted, by Resolution, an Affordable Housing Policy Statement which declares that addressing the City’s Discussion of Affordable Housing Policies
August 20, 2024
affordable housing needs is a priority. This action also established a voluntary, incentive-based approach to promote and facilitate affordable housing development. (Attachment 2)
One of the tools adopted as part of the implementation plan to support the Resolution was the formalization of the Housing Ambassador Program. Under this initiative, Housing and Community Development staff meet with developers at the initial entitlement process to share the merits of and encourage the inclusion of affordable units within larger developments. While this program has not resulted in the creation of any restricted, affordable units, some developers have elected to make a voluntary financial contribution to be used at the City’s discretion for housing programs. To date, four developers have provided funds totaling $561,000.
Housing Element Proposed Policy – Impact Fee
In 2021, the then new City Council again formed a Housing Ad Hoc working group to further explore potential policies related to the production of affordable housing, this time, within the City’s Housing Element structure. The work of that group resulted in the recommendation of a policy that establishes an Affordable Housing Development Fee.
The policy is outlined in the draft 2021- 2029 Housing Element, under Section 4 - Policy Strategy #1: Housing Production Housing Production Strategy 1A(i): Affordable Housing Development Fee. (Attachment 3)
Under the policy strategy, the City will establish an Affordable Housing Development Fee to support an Affordable Housing Trust Fund and Production Program. The Affordable Housing Development Fee is proposed to apply to specific sites described in the Housing Element, which are generally sites that require a city-initiated General Plan amendment and zone change, including sites within the proposed Center City Corridors Implementation Plan.
DISCUSSION:
Incentive Zoning, also referred to as Inclusionary Zoning (IZ), is a tool that has been considered by many cities seeking to address their affordable housing challenges. The evaluation of the benefits and tradeoffs is complex as localities who have implemented such policies often tailor their policy to best suit their local conditions. When considering IZ policies, decision making points include affordability levels, share of units impacted and types of production covered by the policy program.
In Anaheim, prior City Councils have held affordable housing policy discussions including the merits of advancing consideration of incentive zoning housing policies however, these discussions have not resulted in further action. Given the variation in housing policy perspectives, staff is seeking direction from the City Council on the desire to advance such a policy, most likely through a city Ordinance, and if appropriate, authorization to begin working on related studies and implementing guidelines.
Discussion of Affordable Housing Policies
August 20, 2024
IMPACT ON BUDGET:
There is no budgetary impact.
Respectfully submitted,
Jim Vanderpool
City Manager
Attachments:
1. HR&A Housing Study
2. Affordable Housing Resolution (Resolution No. 2018-106)
3. Housing Policy Program