December 12, 2023
City Council Study Session
Housing Element Implementation &
Fairview Developmental Center Specific Plan
2 BACKGROUND
The City was allocated a Regional Housing Needs
Assessment (RHNA) of 11,760 housing units in order to meet its portion of the projected regional need.
2021-2029 City of Costa Mesa RHNA Allocation
Income Category % of Median
Family Income
Income Range RHNA Allocation
(Housing Units)Min. Max.
Very Low
Income 0 – 50% -- $51,500 2,919 units
Low Income 51 – 80% $51,501 $82,400 1,794 units
Moderate
Income 81 – 120% $82,401 $123,600 2,088 units
Above
Moderate
Income
> 120% $123,601 > $123,601 4,959 units
Total: 11,760 units
3 • The City adopted its Housing Element in November
2022.
• The Housing Element identifies specific actions or
“programs” which work to:
Provide additional housing opportunities
Remove governmental constraints to affordable
housing
Improve the condition of existing housing; and,
Provide equal housing opportunities for all residents.
BACKGROUND
4 BACKGROUND
• The California Department of Housing and
Community Development (HCD) approved the
City’s Housing Element on May 9, 2023.
• The Housing Element lists 47 programs to be
completed by the City within the 8-year
planning period.
5 Housing Programs Completed/ Underway
6 Housing Programs Completed/ Underway
7 Housing Programs Completed/ Underway
8 Housing Programs - Phased Rollout
• To complete the Housing Programs in a timely and efficient manner, the Housing Programs have been sorted into two categories:
EXISTING
Building Upon Existing Programs
NEW
Creating the Framework for New
Housing Revitalization
• Residential Assistance
• Housing Outreach
• Zoning Code Updates
• Review of Housing Fees
• Visioning and Community Engagement
• Develop Objective Design Standards
• City-wide
• Neighborhood-based
• General Plan Update, Rezoning, &
Program EIR*
Resources: Existing Staff
Timeline: 2 years (2025)
Resources: New staff teams and consultants
Timeline: 3 years (2024 - 2026)
9 Housing Programs - Phased Rollout
• General Plan Update, Rezoning, & Program EIR includes many crucial components:
NEW
Creating the Framework for New
Housing Revitalization
• Visioning and Community Engagement
• Develop Objective Design Standards
• City-wide
• Neighborhood-based
• General Plan Update, Rezoning, &
Program EIR*
Resources: New staff and consultants
Timeline: 3 years (2024 - 2026)
• Land Use and Circulation Policy
Updates
• Incorporate Design Standards
• Simplify, integrate, and rezone
• Specific Plans
• Fairview Developmental
Center
• North Costa Mesa Update
• Urban Plan/Overlay Updates
• 19 West
• SoBECA
• Mesa West Bluffs
• Mesa West Ownership
• Harbor Mixed Use Overlay
10 •
Zoning Code Updates
•
Streamlining Processes
•
Parking Updates
•
Review of Fees
•
Visioning & Community
Engagement
•
Objective Design Standards
•
Residential Assistance
Programs
•
Housing Outreach
•
General Plan Update
•
Rezoning
•
EIR
Housing Programs
•
Affordable Housing
Ordinance
11 Staffing and Milestone Schedule Examples
Earlier
Start
Date
2023 2024 2025 2026
Progress Staff
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Residential Assistance Programs
Residential Units Rehabilitation Programs 10-
2021 100% Existing staff
Supportive Services for:
- Persons with Special Needs
- Homeless Shelter
10-
2021 100% Existing staff
Monitor and Preservation of At-Risk Units 70% Existing staff Housing Outreach
Update City webpage to highlight housing
programs 20% Existing staff
Identify partnerships for housing 50% Existing staff
Develop user-friendly guides for housing
projects 30% Existing staff
Zoning Code Updates
Residential Parking 50% Existing staff
Update Zoning processes and standards for
compliance with State requirements 30% Existing staff
Review of Housing Fees
Review Planning Application Fees 25% Existing staff
12 Staffing and Milestone Schedule Examples
Earlier
Start
Date
2023 2024 2025 2026
Progress Staff
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Advanced Planning Team
Affordable Housing Ordinance 02-
2021 90% Existing staff
Visioning and Design
Community Visioning and Objective Design
Standards 10% New staff/consultants
General Plan Update, Rezoning, & Program EIR
Fairview Developmental Center (FDC)
Specific Plan
10-
2022 10% New staff/consultants
General Plan Amendment - Safety
Element/Environmental Justice 30% New staff/consultants General Plan, Specific Plan Amendments -
Land Use/Circulation/Community Design 0% New staff/consultants Rezoning of Corridors and Urban Plans 0% New staff/consultants 13 Opportunities & Resources
• City Council already set aside $2.4 Million for Housing and Visioning Plan implementation.
• Grant Funds
• $3.5 Million – FDC
• $310,000 – SB 2 Funds (expended)
• $500,000 – LEAP Funds
• With continued high work volume, most existing staff are already fully allocated to day-to-day operations.
• Department is continuing to rebuild post-COVID.
• New Planning and Sustainable Development Manager
• Filling multiple Senior Planner vacancies.
• Similar to the FDC effort, consultants and project managers must be retained to successfully complete these projects.
14 Next Steps
• Complete the Affordable Housing Ordinance in early
2024.
• Continue community engagement and the development
of land use alternatives for FDC in early 2024
• Release the RFP for Visioning and Objective Design
Standards in early 2024.
• Release the RFP for the General Plan, rezoning, and EIR in early 2024.
• Onboard staff, consultants, and contract project
managers.
December 12, 2023
City Council Study Session
Housing Element Implementation &
Fairview Developmental Center Specific Plan
Fairview Developmental Center
City Council Study Session
on Housing
December 12, 2023
City of Costa Mesa
Brief Overview of the FDC Specific Plan and Housing Goals Site Potential
Discussion of Potential Housing Types (Market Rate and Affordable) Future Developer Considerations
Q&A
Meeting Purpose
Includes an
Environmental
Impact Report
Will be
implemented
by future
developer(s)
Results in new
land uses, zoning
standards, design
requirements &
plans for
infrastructure
City led, two-
year effort with
opportunities
for community
input
throughout
Project Process
CONSULTANT ROLE: Ensure the plan is financially feasible, desirable to build, and best addresses the vision of the community.
2016 State adopted FDC Closure Plan
2022 Senate Bill 188 approved disposition of
the property
2022 State and City agreement for City led
planning effort
2023 State pursued a 15-acre Emergency
Operations Center
2023 City kicked off preparation of a Specific
Plan and EIR
2025 Expected completion date for Specific
Plan and EIR (September)
→ State expected to initiate selection of a
Master Developer
Actions by City and State
Specific
Plan
Boundary
EOC
19 Process for Community Engagement
Vision and Guiding
Principles
Confirming Vision
+ Market Studies
and Overview
Land Use Alternatives,
Circulation, Mobility +
Urban Design
Complete Draft
Plan for Review
Final Plan for
Consideration
Community
Workshop 1
Community
Workshop 2
Community
Workshop 3
Community
Workshop 4
Drafts Online
and Scoping
Meeting
• Stakeholder Interviews
• Pop-up Events
• Dedicated Project Website
• On-line Surveys
On-going Methods of Outreach
November’s Workshops
Start a dialogue and share
information with the
community
Listen to community ideas
and concerns
Gather input for the Vision
and Guiding Principles
Outcome: a community led
draft vision statement and
set of guiding principles
21 Thursday, November 2, 2023 | 6 p.m. to 8 p.m. | English o Costa Mesa Senior Center, 695 W 19th St
o 65 Attendees
o 49 comments cards submitted
Friday, November 3, 2023 | 6 p.m. to 8 p.m. | Spanish
o Costa Mesa Senior Center, 695 W 19th St.
o 10 Attendees
o 9 comments cards submitted
Monday, November 6, 2023 | 6 p.m. to 8 p.m. | English & Spanish
o Virtual using Zoom
o 39 Attendees
o 72 Comments and questions submitted via chat
Workshop #1
Workshop #1 Feedback
Housing
25%
Open Space/ Recreation
15%
Civic Use /Community
Services
18%
Commercial/
Retail/Mixed-Use
10%
Sustainability
6%
Mobility/Parking/Transit
19%
Other
7%
Housing
27%
Open Space/
Recreation
17%
Civic Use /Community
Services
Commercial/
Retail/Mixed-Use
8%
Sustainability
2%
Mobility/Parking/Transit
18%
Other
5%
Comment Cards Group Exercise Priorities
Community Input
City and State agree that housing shall be a
priority use
City goal in 2022 Housing Element
Very Low-Income Units – 575
Low Income Units – 345
Moderate Income Units – 690
Above Moderate-Income Units – 690
Total – 2,300 units minimum
40% Low and Very Low
Housing Goal
Remaining State Land – 158.6 Acres
Less Harbor Village Apartments/SF Homes
= Specific Plan Boundary -121.08 Acres
Less Potential EOC Site -15 Acres
Less Existing Fair Drive, Merrimac Way
Less Properties on Mark Lane
= 99 Acres of New Development Potential
= 23 Dwelling Units/Acre Average (does not
include roads or public parks)
Site Capacity
If this were Playa Vista, CA…
FDC Property Boundary
Variety of Product Types
Maximizes Density
~ 4,500 units shown in the boundary
40-50 units/acre
Green Space & Amenities
how many homes would fit?
27 Resident Amenities
Private Green Space & Pools
~ 5,000 units shown in the
boundary
50 units/acre
If this were the Irvine Spectrum…
FDC Property Boundary
how many homes would fit?
28 Residential
Building Types
Small-Lot Single Family Housing
(Detached and Attached)
10-17 Units per Acre
2-3 Stories
2–Car Garage
Condominiums or Fee Simple
Some Private Open Space
30 Townhomes
Attached
10-24 Units per Acre
2-3 Stories
1-2–Car Garage
Condominiums
Includes Live-Work Housing Type
31 Courtyard
12-26 Units per Acre
2-3 Stories
Parking Tucked-Under the Unit
Either Condominiums or Multifamily
Common Open Space
For-Sale Multi-Story Flats
30+ Units per Acre
4-7 Stories
Garage or Underground Parking
Condominiums
Common Open Space
Multifamily - Various
30 -100+ Units per Acre
3-7 Stories
Building can include Ground Floor
Retail/Other Uses
Range of Parking Options – Surface,
Above/Below Ground Structure, and/or
Combination
Common Open Space
Mountain View
Location: Lake Forest
Type: Multi-family, 4 Stories
Total Units: 71 Units
Affordability: 30%, 40%, 50%
and 60% AMI*
Affordable Housing Today
Orchard View Gardens
Location: Buena Park
Type: Senior, 3 Stories
Total Units: 66 Units
Affordability: 30%, 45%, 50%,
and 60% AMI*
Legacy Square
Location: Santa Ana
Type: Mixed-Use, 5 Stories
Total Units: 93 Units
Affordability: 25%, 30%, 50%
and 60% AMI*
*AMI = Area Median Income
Economic / Market
Considerations
Market Demand
Financial Feasibility Analysis
Different with State Ownership
Developers have Experience
Funding and Financing Sources
Current Market Conditions
Specific Plan Economic Tasks
Financing of Affordable Housing
Financing affordable housing is an
art
Low-Income Housing Tax Credits
Conventional bank financing
A variety of other sources
Example: The Orion in Orange, CA
164 low-income units
1 & 2 bedroom units
Average 600 sq. ft.
$57.7 million
Source: AOArchitects.com
Tax Credit Equity
$19,802,682
34%
Citibank, N.A., Tax-
Exempt Bonds
21,610,000
37%
Riverside Charitable Corporation,
Loan, $4,000,000
USA Multifamily
Development, Inc.,
Deferred Developer Fee
$5,070,331
7%
9%
Net Operating Income
During Construction
$1,965,400 3%
Safehold, Inc., Other
Financing $6,500,000
11%
WNC Solar Tax Credits $149,139, 0.3%
Financing of Affordable Housing
The Orion
City of Orange
What is an Affordable Housing
Payment?
Not more than 30 percent of gross
household income for housing costs:
rent or mortgage payments,
utilities (gas, electricity, water, sewer,
garbage, recycling, green waste), and
property taxes, insurance, and
CFD/HOA on owner-occupied
housing.
Who is Eligible for the Affordable Housing?
Homeowners Renters
Housing Cost > 30% 5,035 12,045
Share of Total HHs 31.8% 48.8%
Housing Cost > 50% 2,335 6,440
Share of Total HHs 14.7% 26.1%
Who is Eligible for the Affordable Housing?
Affordable Housing Payment
(Family of 4)
Who is Eligible for the Affordable Housing?
Maximum Affordable Rent1 Maximum Affordable Purchase
Price2
Very Low Income $1,521 $179,013
Low Income $2,597 $309,848
Moderate Income $3,561 $427,006
Notes:
1. Assumes 2023 HCD income limits; 30% gross household income as affordable cost less utilities, based on 2023 Orange County Utility Allowance. a. Utilities include base electric, water, sewer/trash, refrigerator, and stove.
2. Assumes 2023 HCD income limits; 30% gross household income as affordable housing cost; 15% of monthly affordable cost for taxes and insurance; 10% downpayment; and 7.5% interest rate for a 30-year fixed-rate mortgage loan. Utilities based on 2023 Orange County Utility Allowance. a. Utilities include base electric, water, sewer/trash, refrigerator, and stove.
FINANCING OF
MARKET RATE
HOUSING
Construction Loan
Equity
Permanent Financing
Return on Investment
Financing of Market Rate Housing
0 50 100 150 200
Equity
Construction Loan
Millions
Investment
Return
Financing of Market Rate Housing
-30
-20
-10
0 10
20 30
40 50
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Millions
Equity Construction Loan
Entitlement
Land
Acquisition
Site Work Construction
Sales
Simplified timeline for illustrative purposes.
What is a Master Developer?
Balancing Trade-offs to Achieve Feasibility
To be Studied in Alternatives (next step)
Implications for Level of Flexibility in Specific Plan Master Developer and the Specific Plan
Next Steps
Workshop #2 – Anticipated February 2024
Draft Vision and Guiding Principles for community review Market Study Findings and Additional Existing Conditions Information Input for Land Use Plan Alternatives
On-going website updates – FDCHousingPlan.com
Sign up for notifications at –
[email protected]
47 Project Deliverables
Draft/Final Vision and Guiding Principles
Market Study
Existing Conditions Story Map
3 Land Use Plan Alternatives and Analyses
Preferred Land Use Plan
Project Description
Draft/Final Specific Plan
Land Use Plan
Mobility Plan
Infrastructure Plan
Phasing and Financing
Draft/Final Environmental Impact Report 48
Questions?