City Council Study Session Meeting
September 8, 2026
Measure Q Ordinance
2 Background
• November 3, 2020 – Voters approved City of Costa Mesa Retail Cannabis Tax and Regulation Measure (Measure Q - Ordinance No. 2021-09). • May 4, 2021 – City Council directed one half of one percent of Measure Q revenues be allocated for First Time Homebuyer (FTHB) program (one half of one percent support implementation of Cultural and Arts Master Plan). • April 2, 2024– City Council provided direction to establish the Housing Trust with the available funds of $2.5 million from ARPA Funds. Funds have since been committed to other affordable housing projects. • July 1, 2024 – Preliminary analysis determined insufficient funding available for FTHB program.
3 Background
• June 16, 2026 – Staff presented proposed pilot FTHB program. Program followed Measure Q requirements and supported City Council’s strategic goal: “diversify, stabilize, and increase housing to reflect community needs.”
Staff requested Council direction on eight core program elements and recommended implementing a pilot program.
Council discussed other potential uses for Measure Q revenue set aside. • City Council voted to receive and file the presentation and schedule a Study Session to discuss:
Measure Q ordinance and consider amendments
Housing Trust Fund update and use of funds
4 Measure Q Ordinance
• Title 9, Chapter 1, Article 5, Section 9-29.5(g): Set aside funds and direct toward the implementation of the Cultural Arts Master Plan and First-Time Homebuyer Program
• Revenue Fund Set Aside
Fund 140: First-Time Homebuyer Program Fund
• City began realizing revenues in FY 2022-23
• Amendment to Measure Q Ordinance requires approval from at least five Council Members
Revenue from
Measure Q
2022-23 2023-24 2024-25 2025-26 Total
Fund 140 $16,000 $132,412 $231,201 $236,302 $615,915
5 Measure Q Ordinance
• Ordinance amendment options based on prior Council discussion Option 1: Maintain Measure Q set aside
Option 2: Allocate Measure Q tax revenue set aside to other programs Option 3: Allocate some or all Measure Q revenue fund to the general fund 6 Option 1: Maintain Measure Q Set Aside
• Fund 140: Potential FTHB pilot program presented at June 16, 2026 Council meeting
Approximately $615,915 available for FTHB
• FY 2026-27 projected revenue: $242,000
7 Option 1: Maintain Measure Q Set Aside
Core Program Element City Council Direction
1. Grant Amount Option 1: $25,000
Option 2: $30,000
Option 3: $35,000
Alternate loan structure
2. Eligible Uses of Grant
Funds
Staff Recommendation: Approve eligible expenses
• Eligible: down payment assistance, closing costs, interest rate buy downs, similar expenses related to the financing aspect of the home purchase • Ineligible: costs related to home renovations, improvements, furniture or other household related items
3. Household Eligibility Staff Recommendation: Applicants eligible if they meet criteria • Measure Q Requirements: current Costa Mesa resident, former resident raised in the City, or graduate of NMUSD
• FTHB: never owned a home in California or not owned a home in California within the past three years
• Mortgage preapproval (no all-cash purchases)
4. Income Limit Option 1: 150% (apprx $207,900)
Option 2: 200% (apprx $277,200)
Option 3: 250% (apprx $346,500)
Option 4: No AMI restrictions
Purchase Price Limit in lieu of Income Limit
First Time Home Buyer Pilot Program (Fund 140)
8 Option 1: Maintain Measure Q Set Aside
Core Program Element Council Direction
5. Cash Assets Staff Recommendation: Remove this requirement
6. Eligible Housing Types Staff Recommendation: Approve eligible and non-eligible housing types • Eligible: Single-family detached home, townhomes, condominiums, manufactured homes
• Ineligible: Multi-unit properties, recreational vehicles
7. Residency Requirements Staff recommendation: occupy as primary residence for minimum of 5 years
8. Application Review
Process
Staff recommendation: 60-day application window, randomized lottery, 12 month to purchase home, maintain wait list
First Time Home Buyer Pilot Program (Fund 140)
9 Option 2: Funding Alternatives
Program
1. Tenant Based Rental
Assistance
• Expand existing partnership with Families Forward
• Partner with new agency
2. Affordable
Homeownership
Opportunities
• Purchase land or property to be managed by organization • Provide funding to affordable for-sale housing developer as gap financing or down payment assistance
• Subsidies for predevelopment activities, land acquisition, site preparation, or other costs
3. Affordable Housing
Development
• Provide gap financing for affordable housing development
4. Housing Trust Fund • Direct funds to Housing Trust Fund (Fund 226) to address housing affordability for different income levels
Option 3: General Fund
• Some or all goes to general fund
10 Housing Trust Fund (Fund 226)
• April 2024: City Council established Housing Trust Fund • Uses of Fund 226
Shalimar Relocation of Tenants
Rehabilitation of James Street Properties
Costa Mesa Senior Affordable Housing Project (Jamboree Housing) Recommendation
11 Staff recommends that the City Council conduct a
Study Session to review the revenue set-aside
provisions of the Measure Q ordinance and provide
direction to staff.