Affordable Housing Projects in SJC?

Dense, high-rise, affordable housing in San Juan Capistrano?

That could be the result should the city do away with a fee for developers to opt-out of their obligation to designate 10 percent of their projects to lower-income housing, said Laura Stokes, housing coordinator for the city.

The City Council discussed the future of affordable housing in San Juan Capistrano at its Tuesday meeting.

The state requires cities to have a plan that would accommodate new affordable housing in their areas, Stokes said. That can be accomplished in several ways, including:

• Requiring developers to have an affordable component to their projects
• Offer an opt-out fee (called in in-lieu fee in city-speak) and then have the city use that money to encourage lower-income housing elsewhere
• Zone areas in the city for affordable housing.

Many cities in Orange County simply deem certain areas for affordable housing through their zoning, Stokes said. But if San Juan followed suit, that means the city could lose control over the size and impact of those projects.

By law, affordable housing developers increase their allowable density by 25 percent and can exceed city standards in three areas, such as height, parking requirements and how close to the neighbors the new project can be, members of the city’s Housing Advisory Committee said.

Sam Allevato said he wouldn’t be opposed to such zoning.

“We have refused as a city to do any high density. I think that has been a mistake,” Allevato said. “Theoretically, we could have high density downtown and it could be done well. It could be close to the transportation center. It could be three stories. It doesn’t have to be six stories.”

But members of the city's Housing Advisory Committee said that's not what the citizens want.

"If you make this big change, you’re going to take a step down a dangerous path," said committee member Gila Jones. "I don’t think that’s what we want in San Juan Capistrano. I think we want this village atmosphere."

The Building Industry Association of Southern California sent Bryan Starr, the CEO of the Orange County chapter, to the meeting. He said that San Juan Capistrano’s developer fees are among the very worst in the county, making it the very worst in California and likely the nation.

The BIA estimates that developers pay $100,000 a unit in total fees. He advocated that the council eliminate the in-lieu housing fee and the 10 percent requirement for affordable housing in each and every project.

“You have the absolute discretion to undo regulation that’s affecting prosperity,” Starr said.

A member of the housing committee, Dave Solt, was skeptical and accused councilmembers of being in the back pocket of developers who financed their campaigns.

"Is it pay back time? I hope not," Solt said.

Mayor Larry Kramer and Derek Reeve said they were offended at the insinuation.

"No one has asked me to do anything," Kramer said.

Meanwhile, Reeve was interested in knowing what happens if the council did none of the options.

“So what? What if we don’t’ do it? What’s the penalty?” he asked.

But City Attorney Omar Sandoval said the city would no longer qualify for money from state grants, and the state could shut down all building activity in the city.

The council was split on whether they should reduce the in-lieu fee slightly or return to the early days of the program, back in 1995 – when builders had to pay a fee equal to 1 percent of the construction value of their developments – or reduce the fee by 10 percent, as recommended by city staff and the Housing Advisory Committee.

According to a staff report, the 1 percent fee didn’t give the city enough money to work with to create affordable housing opportunities. That’s why the fee was raised in 2009 to be based on a calculation of current housing values. The rate is adjusted monthly to reflect pricing trends.

Ultimately, the council decided to lower the current fees by 10 percent and asked the staff return later with a more detailed discussion about alternatives.

A city study found that its in-lieu housing fee averages $10,391 per unit in San Juan Capistrano. The city will be discussing other fees developers pay later in the year, according to staff.