Residents call for the inclusionary housing policy to be applied to entire city, developers push back

Photo by Yury Kim from Pexels

The City Council unanimously voted to draft an inclusionary housing policy for the city at its meeting on Tuesday, July 14.

The policy will require all residential rental developments to have at least 11% of its units reserved for very-low income households. For ownership properties, 10% must be set aside for moderate-income units.

Some residents felt that the inclusionary housing policy was inequitable unless applied citywide. In e-comment, 37 residents advocated for the adoption of a citywide policy.

Currently, the policy only applies to one submarket, called Area 1, which is centered around Downtown and Midtown. The vast majority, over 90%, of housing development in the city has occurred in Area 1 over the past 10 years, according to Director of Development Services Christopher Koontz.

For the policy to apply to the rest of the city, developments will have to set off certain “triggers,” like zone changes and general plan amendments.

A map illustrating the regions where the inclusionary housing policy will take effect starting January 1, 2021 with a three-year phase-in process. | City of Long Beach (City of Long Beach)

Long Beach Forward research and policy analyst Elsa Tung likened the policy area map to “redlining 2.0,” stating that the program would not help desegregation in the city.

Victor Sanchez, director of the Long Beach Coalition for Good Jobs and a Healthy Community, agreed that citywide implementation would help reverse the city’s history of discriminatory zoning.

“Make this a citywide policy to directly combat the policy of redlining in this city,” Sanchez said. “New development across the city must be required to build or add to the supply of affordable housing so we don’t repeat our history of mistakes. Remember the workers.”

Legally, the City appears to have its hands tied. According to Kathe Head, managing principal with Keyser Marston Associates, state law requires that all inclusionary housing policies must not act as a constraint to development.

“There’s just been such a negligible amount of development that you can’t really impose another restriction until development starts occurring,” Head said.

She explained that the inclusionary housing policy itself is an impediment to development because it adds cost without adding to the value.

Mike Murchison, a consultant for developers, said that the lack of development in the East Side of Long Beach is due to high costs. He did not comment on the areas proposed in the policy.

“The cost of land, the cost of construction, the fees associated with it, it makes it extremely difficult to do market rate housing,” Murchinson said. “And pretty much impossible to do low-income and moderate-income housing.”

An e-comment from Kraig Kojian, president of the Downtown Long Beach Alliance, pointed out that the feasibility analysis was based on market conditions that have changed since the onset of COVID-19.

“Variables including labor force, building material costs, and access to development financing have all been significantly affected and altered by the public health crisis,” Kojian wrote. “As a result, past information is no longer reliable when discussing the proposed inclusionary housing policy.”

Representatives from other associations, like the Long Beach Area Chamber of Commerce, the Los Angeles/Ventura Chapter of the Building Industry Association of Southern California and the Building Industry Association, also pointed to these factors.

Councilmember Rex Richardson’s district takes up all of Area 2, where development has already been sparse.

“Every housing development that’s taken place, rehabs or new development, in my district it’s taken some incentive from the city,” Richardson said, citing leveraging land or offering multi-million dollar loans for projects. “We haven’t had any development that’s simply driven by the market.”

As part of the new ordinance, the city is looking into additional incentives it can offer to help promote affordable housing development in Areas 1 and 2.

“We’re going to try to create a carrot to incentivize development in these areas,” Head said. “Then, as a part of that, we’re going to impose affordability restrictions.”

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