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Santa Ana considers loosening affordable housing rules for developers

American Barbershop in downtown Santa Ana used to be a Ritmo Latino. Mendoza says he received a lot of criticism at first opened for opening an Americanized business.
Maya Sugarman/KPCC
The American Barbershop sign on one of downtown Santa Ana's older buildings. Santa Ana city officials are considering waiving affordable housing requirements to make it easier for developers to convert other old commercial and historic buildings into residential uses as the demand for housing rises.

Santa Ana city officials are thinking of changing some affordable housing requirements for new properties Tuesday in a bid to lure developers to the city's downtown. 

Developers have been eyeing historic buildingsin the rapidly-changing neighborhood — old office and commercial spaces — for potential conversion into apartments and condominiums, but say the requirements to provide affordable housing are too burdensome.

The city council will consider concessions on Tuesday.

Last year, the city of Santa Ana passed an adaptive reuse ordinance that gives certain waivers on parking and structure requirements to developers converting historic and commercial buildings into residential developments.

“We’re still fighting to attract investment,” Hassan Haghani, executive director of the city’s planning and building agency, said during KPCC’s AirTalk forum in Santa Ana on Aug. 19. 

Haghani, who started working for Santa Ana in June, said he heard several complaints from developers about the city’s affordable housing rules being unpredictable and inconsistent.

On Tuesday, the Santa Ana City Council will consider amending the city’s Housing Opportunity Ordinance to waive the affordable housing requirement for historic buildings and commercial conversions, also known as adaptive reuse projects.

At a recent city council meeting, Hagani said that retrofits to meet current fire and building codes are already expensive and adding the affordable housing obligation would often make projects economically infeasible: “The developer will walk away from the idea of conversion of buildings.”

About a dozen buildings would fall under the proposed exemption, he said.

Mayor Pro-Tem Vincent Sarmiento has said he supports waiving the affordable housing requirement for projects converting old commercial or historic buildings into residential uses, noting that some of the buildings have second, third and fourth floors vacant.

“We don’t want to leave money on the table, but we also want those old buildings that are historic to be preserved, to be rehabbed and be made available for new housing stock,” Sarmiento said.

Affordable housing advocates fear Santa Ana residents will be priced out of the new units that would be rented or sold at market prices.

Cesar Covarrubias, executive director of The Kennedy Commission, told the city council on Aug. 4 that all residential development projects should be required to reserve a portion of their units for affordable housing, including conversion projects.

“If they can’t make it work, let them show you,” he said. “Have them pay an in-lieu fee.”

In general, in-lieu fees allow developers to pay a city in exchange for not including the required affordable housing units in a project. 

Under the proposed changes to Santa Ana’s housing ordinance, only residential development projects with 20 or fewer units could choose to pay an in-lieu fee of $15 per square foot.

Condo projects, with more than 20 units, would be required to reserve 15 percent of the units for low-income buyers or renters. Developers building large apartment complexes would get to choose to put aside 15 percent of the units for low-income renters or 10 percent for very low-income renters. 

Larger developers would also have the option to build the affordable housing units at another location or rehab existing housing projects in the city to meet the affordable housing requirement.