Read the July 26 meeting.

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Thank you.

Thank you.

Recording in progress.

Good evening, everybody, and let me go ahead and just call this meeting to order of the Santa Ana City Council special meeting tonight, where we have one item on the agenda. We will be talking about the housing opportunity ordinance, and we'll be discussing the work study in a work study session format. So welcome. I hope everybody is doing well.

I was reminded from a couple of my colleagues that to the extent those of you who have not been vaccinated, we recommend highly that you wear your masks indoors. We are inside. Unfortunately, we're still dealing with this variant. So I would recommend for your safety and those people that you care about, please make sure that you keep that mask on and we will, you know, we're far enough away. We've got plexiglass between us, but we want to make sure that you all are healthy and safe as well as members of your family when you go back home. So with that let me go ahead and turn it over to the clerk and actually

before I turn it over the clerk for roll call let me take care of just a quick housekeeping announcement. So this meeting is taking place by in-person attendance and via teleconference by Zoom. The public may access the meeting via the Santa Ana YouTube channel or the city's website. And as usual, please bear with us as we may have some technical difficulties. So with that, I'll go ahead and ask the clerk to please conduct roll call.

Councilmember Becerra? Here. Councilmember Hernandez?

Phil Bacerra

Here.

Councilmember Lopez? Present. Councilmember Mendoza?

Present.

Councilmember Mendoza, I see that you have virtually joined us. If you would please select the microphone icon on your device.

Councilmember Mendoza, if you would please select the microphone icon on your device to unmute your call.

councilmember fan here mayor pro tempe noosa here mayor sarmiento here and if you'll all please rise and face the flag and place your right hand over your heart paying special attention to the last verse of the Pledge of Allegiance. Please repeat after me. I pledge allegiance to the flag of the

David Penaloza

United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Thank you, everybody.

So tonight's single item on the business calendar will be to discuss, in a works study session format, the housing opportunity ordinance. I want to thank staff for preparing the information that we're going to be receiving tonight. But really, I want to thank my colleagues who wanted to make themselves available to receive more information. There's been an ad hoc committee that was convened to take a deep dive into some of the technical aspects of the Housing Opportunity Ordinance.

But for the benefit of the public and for the benefit of those that are eagerly anticipating and interested in seeing what the discussion will follow and decisions made on the WHO, as it's known as an acronym, we are entertaining this. And we've done this for other matters as well. We've had study sessions on the waste hauling contract as well. So I want to thank staff's indulgence in making sure they make these processes as transparent and open as possible.

And thank my colleagues for lending of their time to make sure that the public and everybody is aware of decisions that are being made at the city council meeting as they should be. So with that, I'm going to go ahead and turn it over to our staff to get us kicked off.

Thank you, Mayor, Honorable Mayor, Mayor Pro Tem, and Council Members. As mentioned, it's a special work-study session with only one item on the agenda, which I'm kind of excited about. So what we do have planned for you is staff is going to give a brief presentation on the item and then you will have the opportunity to hear from the invited stakeholders along with the members of the public that want to give you their opinions on this very important topic. With that, I'm going to introduce Executive Director Min Tai, who will provide the presentation.

thank you city manager Ridge good afternoon good evening mayor and mayor pro temp city council Daniel if you can help me start the presentation

thank you Daniel I'll start with a quick recap of the events tonight we are reviewing the recommendation of the Atohock committee and this is a continuance from your July 6 meeting the council to provide direction also for staff to reach out to stakeholders in our community in preparation for this work study session the city council identify over 100 stakeholders from the communities that included neighborhood leaders included housing organization and advocates business associations as well as housing developer both market

rate and affordable housing for the next few slides I'll be going over the recommendation of the committee as it relates to some of their key recommendation what I'll do is I'll quickly go over the coordinate current ordinance as applicable and then the changes the adult committee is going to recommend the first item is the applicability and the trigger currently the housing opportunity ordinance applies to project with 20 or more units the ad hoc committee recommendation is to adjust that threshold from 20 units to

five unit and then combining it with a sliding scale for payment of the in lieu fee in terms of that option. And I'll go over that in the next couple of slides.

Currently it only applies to projects where there's increase in residential density above the prescribed general plan and also apply to only incremental units above what is currently allowable. The proposal, the recommendation of the Iowa Committee is to include those triggers, but also to have additional triggers that essentially reverts back to the prior WHO that was in place before the WHO was changed in September of 2020. 2020, and this includes increase in residential density permitted zoning as well as any city

initiated general plan amendment and zone changes after November 28th of 2011. In terms of rental set-aside units, the current set-aside is 15% and 10%, and that's for low and very low income, respectively. The committee is including that, but also is recommending the addition of 5%, which represent extremely low income, which represent 0 to 30% of AMI.

in terms of the options to satisfy the inclusion requirement this is when a developer look at options of not having to bill on site but the potential for payment of an in-lieu option currently the ordinance is set at five dollars across the board for any project that is over 20 units the ad hoc is recommending that the in-lieu fee be readjusted to $15 per square foot for projects with 20 more units and then applying a sliding scale as you see below and as you can see it starts out at five units and ranges all

the way up to 20 units and range between six dollars per square foot all the way up to $15 per square foot.

In terms of the payment of the in-lieu fee, currently the ordinance is requiring that any project that opt to pay for the in-lieu fee to pay prior to building permit. The Ad-Off Committee is recommending that this payment be allowed to be stretched to the prior issuance of the first occupancy permit. The rationale for this is that by extending the payment period, it will potentially save carrying costs on the fee amount that would have been paid at the beginning of the project.

In addition, the City Council on July 6 discussed skilled labor and trained workforce. The Council requested that the current language, which encourages project opting for the in-lieu fee payment or receiving inclusion housing fund to provide enforceable commitment to use skilled and trained labor. the City Council asked that this language be changed to making this a mandatory requirement for the purpose of your discussion tonight other enhancements include affordability periods the affordability period currently

is 55 years the proposed change by the committee is to make that in perpetuity

in addition the anahawk committee also recommended that the priority use of the fund to also include priority for new affordable housing opportunity for large families currently living in the city and includes program addressing housing security eviction prevention housing legal assistance for city residents

that in summary is some of the key provisions that the adult committee recommended for the City Council to consider and for your discussion tonight the agenda includes staff's presentation there's also ski stakeholder comments we invited as I mentioned over a hundred ski stakeholders who are here tonight as well as residents and community leaders and then public comments and And the goal is for the council to discuss the items and provide direction for staff as to the next steps.

Great. Thank you, Director Tai. And I know that there's certainly a lot of stakeholders. There's a lot of people who are interested. So I think you did a robust effort to try to advise everybody and provide notice to members of the public as well. So we will handle this as we normally do our public comment section of a regularly agendized meeting. Everybody will be given an opportunity to speak for three minutes. And we will begin with those that are in person first. And we have several people that are waiting to speak online as well. We wanted to make sure we have that option available to folks that can't make it here in person

and still want to address the council. So I thank staff and the clerk's office for making that adjunct ability to have people comment. I think we, Madam Clerk, do we now cut off the line for those that want to comment? I think some people have had an opportunity to go ahead and log in earlier. So let me go ahead and begin with the list of cards that I have here. and I'll call you in order so if you guys can get in a queue really quickly I'll make sure that we all go through this as painlessly as possible. So let me start with somebody who I know is going to be very painless,

Ernesto Medrano, Andrew Gonzalez, and Doug Mangione.

Thank you.

My name is Ernesto Medrano. I represent 140,000 hardworking men and women in the construction industry, the Los Angeles and Orange County Building and Construction Trades Council. Also representing 26 apprenticeship training centers in our jurisdiction that provides about, right now, 21,000 apprentices through the pipeline. And I'm here to urge the City Council to improve the labor standards and the ordinance. The skilled and trained workforce in its entirety should be required, just as it was unanimously proposed by the Planning Commission last year.

But I think you should also include some sort of a method for a good faith effort to have local and veteran hire. Just like the community workforce agreement we have with the City, we think that's been a good thing. A little bit of background. I think it's important to note that when it comes to construction, there's really two industries or two sectors that bifurcate it you either have your commercial which is by and large unionized and your residential and let's face it it has it's not a pretty picture in the residential sector for the workers 48 percent of the industry of construction worker families are dependent upon

a safety net in the state of california which about comes up to three billion dollars a year for us. In other words, we taxpayers are helping to subsidize all of that. I do want to commend the city council for its leadership last year for incentivizing the development of construction of housing. I think if there's any one thing everybody in this room agrees is we do need more housing. Of course, it's how we get there is a conversation that we need to have collectively. But it's very clear that it's not a pretty picture. The district attorney in the county of Orange has a wedge staff and insurance division.

and a lot of the issues that go on with those contractors are in the residential sector. There is a history of exploitation. There is a history of wage theft. There is a history of misclassification. So it's not a pretty picture, and we think that this is an opportunity to have contractors and these developers to partake in the opportunity to create a skilled and trained workforce and to enhance apprenticeship opportunities to provide a pathway into the middle class. The word we always hear is, well, it won't pencil out.

But you know what? And the criticism is there's a skilled labor shortage, but the fact of the matter remains that there's an opportunity here for these folks to also be invested in this. We invest in the state of California. We have $200 million a year that provides for 68,000 apprentices. By the way, 20% of those come from justice-impacted communities. In here, in Santana, is the only city that we have our apprenticeship readiness multi-craft core curriculum at the Remington Center out of Santa Ana College. and we actually have been placing graduates of those programs into our apprenticeship program.

We also have it at the high school, every century high school. I'm very proud to say that we're doing very well there. So again, it's extremely important to note that I think there's an opportunity for us to do right by this ordinance, to make it a requirement. I notice that the public contract code doesn't have 2603, I understand, but I think it's extremely important for us to not leave it aspirational. So again, I urge this council to make it a requirement to have the skilled and trained workforce requirement, to consider looking at the local hire opportunities.

And as a last thing I would like to say is some of you have not had an opportunity to train one of our apprenticeship training facilities. In Orange County, I think there's about three facilities. The electricians is here in Santana. In La Palma, you have the iron workers. And in Buena Park, you have the carpenters. So I'd like to invite each and every one of you, staff and council, to participate, give me a call. And we'd be more than glad to give you a tour of winter or train facilities so you know exactly what we're talking about. Thank you.

Thank you, Ernesto. Doug Mangione, I'm sorry, Andrew Gonzalez, followed by Doug Mangione, followed by Ryan Ogolnick.

Good evening, Mayor, council, and of course staff. I want to thank you all for allowing us the opportunity to speak here tonight. It's a very important issue. The housing crisis in California is first and foremost a supply and demand problem. We simply don't have the supply to meet the demand. Over the past several decades, elected leaders of all stripes have an excellent job of setting up barriers to the construction of housing in the name of gentrification, limiting density and congestion, or preserving community standards. Now we find ourselves in a housing crunch, and not unexpectedly, housing prices have

surged as supply and demand takes effect. So what this means is that every unit of housing built, either market rate or affordable, will help to alleviate the housing crisis and drive costs down. The other half of the housing affordability crisis are jobs and wages. If residents have good jobs with living wages, they can just afford more housing. Currently, affordable residential construction wages ensure that those that are building the housing can't afford it. Affordable housing developers have gotten away with paying poverty wages with no medical benefits or retirement security.

affordable housing advocates have endorsed this arrangement so they can tell their constituents they've gotten more affordable housing built status quo puts an undue burden on local workers family and the government services that are needed to make up the difference this is an unsustainable model that must be addressed I support the city's plan to build more housing and more affordable housing I support the city and their demand that if developers want to be exempt from a horrible affordable housing mandates the city should get something for it. I would suggest that local living wage jobs would be an excellent solution

to the in-lieu regulatory mix. Not only would developers be able to build housing that pencil out, but it helps drive down the cost of housing, but will also help the second half of the affordable housing issue. Furthermore, skilled local jobs have a substantial economic impact to local businesses and communities. I urge you to consider a regulatory framework that allows for the construction and development of much-needed housing that also ensures local living wage jobs. Thank you so much.

Thank you. Doug Mangione, followed by Ryan Ogelnick, followed by Sam Romero.

Mayor Sarmiento, City Council, it's good to see you all again. It's been a long time since we've been in chambers here, so I thank you and appreciate the opportunity to speak to you tonight. My name is Doug Mangione, and I'm speaking on behalf of the 2,500 skilled and trained electrical workers of the International Brotherhood of Electrical Workers here in Orange County. You have a lot of important things to discuss tonight, nothing more important than housing and affordability and how you get there. But I just want you to consider, for us, the workers that are going to build these.

IBW, we've been part of the city of Santa Ana since our founding in 1928, founded right here in the city of Santa Ana. Our apprenticeship is located in this city, and we are in the process of purchasing a new, bigger building to house our expanding apprenticeship school. and we chose to purchase that building and to stay and remain in the city of Santa Ana. So we will still be part of Santa Ana as we have been for almost 100 years. When we're finished, I hope we invite all of you and you can attend our grand opening. We can only offer opportunities for good careers in electrical construction trades,

which pay good wages with benefits if you, as a council, agree that providing these careers to local residents and veterans are important and should not only be encouraged, but it should be required that development in our city be constructed with community benefits agreement utilizing skilled and trained workers and local hire requirements.

This is how you're going to give local men and women the skills to bring them into the middle class skills that they will retain for a lifetime giving them the ability to live here in our city raise families in our city purchase homes and goods in our cities whatever you decide to do tonight please put in the framework and give these young men and women the opportunity that we can offer them and the trades can offer them thank you for your consideration thank

you Doug thank you for your comments Ryan Ogolnick followed by Sam Romero

followed by guadalupe errico good evening ryan ogolnick vineyards development i participated in affordable housing in santa ana for at least the last decade even prior to the first ordinance in 2011 we were paying affordable housing fees typically three dollars sorry three thousand a unit or four dollars a foot additional background regarding sort of my company and the affordable fee over the years. My company has paid more than 50% of the WHO fees since 2011 and we've

paid, actually we've paid more than all the other projects combined. And I'm here today to say at $17, $18 a foot, the fee is too high. The mayor will attest because he's been here longer than me but I've never once objected to the fee in fact I've always seen the fee as necessary in Santa Ana but at 17 18 dollars it's getting to a point of that we won't see any development in Santa Ana for more

background on this point I've sat with Jamboree I've sat with the Kennedy Commission over the last seven years we've brainstormed how do we make these dollars go far how do we leverage these dollars and whether or not on-site or off-site made more sense for Santa Ana I sat in countless work-study sessions met with staff and again I've never once thought the fee was not appropriate I I always thought we needed a fee. Of course, it comes down to what is that fee? Lastly, just by way of background, and I'll get to where I think this fee should go,

even when the city had litigation issues, policing the homeless, had issues finding a property. I've donated a property what was to be six months. It turned out to be three years. I provided another building for the city for a permanent shelter shelter and help them and currently helping them construct the shelter the point is I care about the disadvantage and Passionate about doing anything can assist the homeless and providing affordable housing We develop housing to make sense that developers assist affordable housing and homeless health housing we've developed shelters in Anaheim Fullerton in Los Angeles

us I'm not coming here tonight solely self-serving in fact for the first time in a decade we don't have anything in the pipeline I come here to help you guys find a balance of what makes sense between development and not developing when the fee was at $15 a foot nobody paid the fee we couldn't pay the fee it just didn't make any sense we did pay a fee of 935 for parks and paseo but even at 935 we must have gone out to three or four dozen lenders to find a lender to

finance it because at 935 the the returns were just so slim so what staff has done and they and they put it in the report is the same thing they did ten years ago they hired a consultant the consultant did an analysis Kaiser Martin led by Kathy head came out with some projections ten years ago the projections had a fatal error and that she was Ryan if you can start wrapping up okay your lights red okay so we took deja vu come back to today and there's

two blaring errors in her analysis on page two of the of her study she concludes that land in Santa Ana is two million dollars an acre we haven't paid two million dollars an acre since 2010 land today is five or six million acre if you make the adjustment it sends the fee all the way down the zero thank you that's it thank you that's three thank you

Sam Romero followed by Guadalupe Rico followed by Cesar Medina good good evening folks my man said my name Sam before you start start Sam's clock again so there's a light right in front of you a light bar and it goes from green to yellow to red once it's red it turns you know that's three minutes that's exhausted and so I just want to make sure everybody pays attention to that that's why we have those three we want to be fair to everybody that everybody has an equal amount of time that's the reason why we make that visible I'm

sorry Sam go go right ahead okay real quick 1920s the zone in Logan was given m2 with nothing happened and Logan for a long long time around 1947 there was a freeway coming in on this as a fire okay there was a bridge built over on Lincoln Street in the neighborhood a lot of families were misplaced not only in Lincoln, Logan, and Custer. Homes were lost. Time went on. In 47, like I say, the bridge was built. We didn't think anything of it until many, many years later.

All of a sudden, the city buys three lots on Custer Street. First, we couldn't figure out what it was for. What it was for is a civic center would then connect to the freeway, which is a 45 degree angle, and kick out a lot more people. Meantime, with that M2 zone, it was changing from residents to businesses, some like garbage disposal, wear disposal. We could smell it all the time, drip it into the ground. nothing happened okay so what we're asking with the folks try to make something bad into good now help us bring that as a residential 100% what we

had before but I said we got a lot of businesses come in and we're asking for funding for that maybe through maybe the money that's taken out of was a per square foot five dollars whatever it is put into a special phone fund to to make something good that the city did wrong many many years ago and I could go on and on forever and I'm willing to do a presentation of how the city but got the short end of the state for generations okay so please consider Logan to rebuild it to bring it back up the way it was when I was a kid when it was about

97% residential so that's it folks we need your help thank you thank you Sam

Guadalupe Rico followed by Cesar Medina followed by Jonathan Shum.

Guadalupe?

Cesar Medina? Si, Cesar Medina. Adelante, creo que Guadalupe no esta. No, viene después de mi.

Good afternoon, Mr. Alcalde, member of the Honorable Consejo. I'm César Medina, of the organization Sullivan in Action.

And we are here to congratulate you, Mr. Alcalde, Mr. Miembros, for the initiative and the work that they are doing. to celebrate that decision, that desire to help the population of Santana. Because it is a matter of fact that, with the need that there are, there are many houses, many houses that sub-arrendan, three, four and even five, have five sub-arrendatarios. What is not convenient?

No, it is not good. Why? There is no privacy. It is fundamental. There is a common use of all the families, especially in the areas. In total, they will have to give me the reason. No can be so well.

We want to take care of these asequibles to take into account the Muglojón. I live in a Muglojón. in the space 30, of a park called Country Club. I don't want to talk about the internal problems that are in the Country Club. I'm only, and I'm here, to support your initiative, taking into account that in Santa Ana can live better. And one of the best possibilities is that people have a way of living. digna.

Apoyamos

el ajuste de 5 dólares a 15 porque va a tener más recursos la ciudad. Queremos también agradecer por las iniciativas que han tenido ustedes para el control de renta. Quisiéramos también que estas iniciativas se amplíen hacia el control del agua

that in this case is high for us, although we know that the corporations win, but that money does not transmit to us, but that we keep with them.

And to finish,

we want to make this idea more socialize, more, for that we can be at least in this salon. I just met in half of this ordinance, I have come to the Apuro, not only to participate or to have the approval of you or of someone in special, but for that the Alcaldes and you have the support of those who have been sent to the city where you are sentados. O sea, el pueblo. Porque en el centro de la ciudad se puede vivir mejor. Gracias, señores.

Gracias.

Good afternoon, Mayor and Council. My name is Cesar Medina, and I'm here to congratulate you, Mr. Mayor and the City Council members. I am a member of a group called Sullivan in Action, and I want to, here to support this initiative that you are considering, we would like to collaborate because we want to have a better Santa Ana. And we know that there's a big need in housing, affordable housing. There's housing with subleasing, with three, four, and five subleases within a unit, a house.

And this is not practical because for one there's no privacy, there's less common places to live, and people just do not live well like this. This is important and we'd like for you to include in your initiative mobile homes. I live in a mobile home myself, Country Club, space number 30. And I'm not here to talk about the problems inside this place. but here to support your initiative. We want Santa Ana to, we know that Santa Ana can, we can live better in Santa Ana with dignified housing.

We support you increasing the fee from $5 to $15 because this way the city will have more money. And we want to thank you for the rent control measures that initiatives that you have implemented. And we want you to extend those to water because water is very high for us. Of course, corporations make a lot of money, but they don't share this money with us. So I'd also like to make this more public because we want to fill this room because we are here to support you in what you're doing. Because you are here because of the people, Mayor and City Council, and we want to support you.

Thank you for that. Guadalupe Rico, followed by Jonathan Shun, followed by John Hennam.

Madam Clerk I think we'll need a, we may need a translator, I'm not sure.

I have increased income of the rent. I got to pay $225 and now I'm paying $1,500. Where are we going to get? I have a business on the 4th Street Street. I'm thinking of moving myself because this is a big problem. Where are we going to send out the city of Santana? I have a lot of love in the city of Santana. My children have grown here. I've seen a lot of adolescents grow here, but if the increase of rent doesn't stop here,

then we're going to go to Riverside, to Corona, while our children have grown here. In terms of utilities, we pay a lot of water. and the community or the place where I live is paid to the city of Santana and we pay much money for water sometimes I get the bill of $220 dollars and I would like to see you Vicente Sarmiento that help us as I have the last time I came and asked

that is a little bit of a cry and I have also been given to you as a mayor, I think you have the possibility of extending the hand to the people who are needed. I thank you very much for listening. Until then, good evening.

Good evening. Thank you to the City Council for listening to us. As my brother just said, we are here for you to make this a priority, to stop the rent increases. When I came here, I used to pay $225. Now I pay $1,500. That's a big jump. I have a business on 4th Street, and I am thinking of moving because this is just untenable. This is not sustainable. Where are we going to go? So my kids, I love Santa Ana. My kids grow up here.

But if the rents keep increasing and there's no control over that, we're going to have to move to Riverside, to Corona, or somewhere else. Also, the utilities are very high. Water is very high. The community, we pay water to the city of Santa Ana. And it's a lot of money. For water, I pay, sometimes I pay $220 just for water. and Mr. Vicente Sarmiento, I think you can help us. We're coming back again. This is a desperate cry and we're coming to you as mayor because we think you can help us. So thank you all for listening to us.

Jonathan Shum followed by John Hanna followed by Francisco Gomez.

Good evening Mayor Sarmiento and honorable council members. My name is Jonathan Shum and I am a senior vice president at Related California, developer of affordable and market rate housing along with mixed use projects throughout California. My colleagues and I want to say thank you to the mayor and the council members and city staff for hosting this important work study session to review the proposed amendment to the affordable housing opportunity and creation ordinance. As one of the largest producers of affordable housing in the state, related recognizes the importance of generating safe and obtainable housing

due to the ongoing housing crisis. We understand this after completing the 114 affordable housing units at Chiara Station District with the city of Santa Ana, Crossroads at Washington and 83 unit public private project under development with Santa Ana and numerous projects throughout Orange County. Related California along with a group of housing professionals have carefully reviewed the proposed amendment and the materials presented at the July 6 City Council meeting. Based on our analysis, it became clear the Supportable and Luffy memo prepared by Kaiser

Markston Associates did not have access to real-time market rate, access to real-time market information and data to accurately determine the Supportable and Luffy amounts cited for high-density multi-family development. We wanted to reiterate that Kaiser Markston is a reputable affordable housing firm with years of experience and a firm that we have successfully worked with on projects in orange county that said we all know that housing development takes time to implement and is subject to multiple variables and nuances as a result we would like to take

the opportunity to continue the dialogue and work with city staff kaiser marston and other stakeholders to refine the fee analysis to ensure all parties and the public are working with the accurate set of facts and their assumptions. This will enable the city to propose and approve an amendment supported by sound data and information and ultimately generate the long-term and sustainable housing desired by the citizens of San An. Thank you. Thank you for that. John Hanna

followed by Francisco Gomez followed by Manuel Escamilla. Thank you Mr. Mayor, Council Members,

John Hanna representing the Southwest Regional Council of Carpenters who about 60,000 strong in the Southwest United States and almost a thousand here in Santa Ana and we have a few of them here in the audience I just want to make a few observations I want to thank the council for taking looking at this again there was a study and it talked about what's happened in the last year but But one thing that I found interesting was that part of that original ordinance talked about an aspirational use of skilled and trained workforce for the labor force.

That wasn't even looked at at all to measure whether that had even been utilized.

And I think that's, it was kind of an aspirational afterthought, but we thought it should have at least been measured. I think that Santa Ana had the answer. And one of the problems is that in the residential construction industry, half the families of construction workers total are enrolled in safety net programs in our country and in California, whereas only a third of other workers are. And according to the UC Berkeley study this year, they found that structural features of the residential sector incentivized a race to the bottom

and employees are now governed by the operating principle to reduce labor costs through whatever means possible. So in other words, we're subsidizing to taxpayers a lot of these residential developments. So what's the solution? I thought the Santa Ana Planning Commission had that and now Council Member Fan was very eloquent in getting that through. but unfortunately when the council got to it only now Mayor Sarmiento and Councilmember Mendoza voted to keep that mandatory language so the aspirational

was left. My suggestion is that you take a look at this and if a developer does not want to use a skilled and trained labor force then make them pay the 17 your study says that they can afford to pay. If they're willing to use a skilled and trained workforce as set forth in the California codes, then we should go back to the language that the Planning Commission suggested and allow them to have a reduction. The council may need to look at what rate that is, but it's an important thing to do. And I thought Mr. Medrano made a good point

about having a local hire component. And in the language that you have here in the ordinance, there already is a local component of getting people to live in those housings. Why not make that a local component for people to work in it? So if you're gonna raise it, raise it all the way and a little more for people who are not willing to use a skilled and trained workforce. If they are, I think you should give them some reduction. And what that should be, I think the council needs to make that determination. Thank you very much.

Thank you for that. Francisco Gomez, followed by Manuel Escamilla, followed by Celica Diaz.

Good evening, city council. all do appreciate you giving me the opportunity to speak today i am a resident of santa ana and because of the carpenters union and the wage i make i was able to buy my home here very fortunate especially this economy that these houses are going up up up and up i was just fortunate when i bought about a low price uh the other thing too is i'm also part of that skilled and trained labor that they're talking about if it wasn't for them we i don't know where i would be especially if i'm not skilled or not trained not being able to produce the type of work that I do the third

thing is also a job like this will keep me home you don't know how many hours we spend on the road waking up early getting to work and from work especially if there's a lot of the majority of work is in LA driving to LA is no problem takes me 45 minutes to an hour depending on traffic and depending the time I get out of here. Coming home is the part where we get beat up a lot. We just get off of work, we get in our cars. And sometimes it's at anywhere from an hour and a half to two hours to two and a half hours, depending on traffic, especially on a Friday afternoon.

Sometimes we're just hoping that let's see if our foreman lets us go home early. You know what I mean? So jobs like this will keep us local. I'll be spending my money local. I'll be gas station locally. That's all revenue for the city of Santa Ana. I live on Euclid and First Street. I'm very borderline of Garden Grove, Westminster, Fountain Valley, and Costa Mesa. So anytime I get an opportunity to speak, especially on agendas like this, I say I'm a resident of all those cities, especially this one. I got the majority of my family lives here. My mom's side of the family are all in this area. I got a few on my dad that are also here.

But we need these jobs so I can stay home. I've got a two-year-old daughter that I want to spend time with her in the afternoons, especially right now that the daylight is towards 7 o'clock. I want to come home to go play with her, take her to the park or things like that. And I've got a newborn on the way. My wife's pregnant. So we need these jobs here.

I'm done basically working in L.A., but I'll work in L.A. because I've got to feed my family. but a job like this will keep me home and we need this thank you very much and

have a good day appreciate it thank you Manuel Escamilla followed by Salika Diaz

cool all right hello mayor and council

Okay, sorry. Hello, Mayor and Council. Thanks for hosting this and it's a very important topic for sure with a lot of moving parts. And at the end of the day, it's going to be a political decision, obviously. There are a lot of kind of technical questions I'm hoping that you all can bring up during this discussion. So I'm going to try to get through those. You know, the first of which is really just what this who is actually going to apply to. So in the staff report, it doesn't quite make it clear where these units or this fee is actually going to apply.

I know it basically says everything that's been up zoned after 2011. So for a developer coming in, might not know exactly where their parcel is. So just developing a map or just some kind of very easy to use tool so that we know which parcels are actually going to be subject to this fee would be a good step. I don't see that in the staff report, but it would be good to discuss here. Just because it looks like most of the units or potential developments where this would apply have already been entitled. So we have probably about two different projects that might need to pay whatever this higher

fee is if the fee is changed. So a little clarification on that. And in prior years, we saw that a lot of folks would pay the in-lieu fee rather than pay or develop anything on-site, which to me indicates that as rational actors from an economic perspective, developers will pay whatever costs less. So at a certain point, you know, it made more sense to pay the fee rather than to develop on-site. So there might be a consideration for mandating on-site at a certain threshold. Again, what you're kind of proposing here, which I like, is that you're increasing cost as the units get larger. So we know larger projects have bigger impacts.

We know that people tend to prefer smaller projects, so having that sliding scale is very helpful. But it might be worth considering making the mandate for on-site inclusionary housing at certain point. I don't know what that point is but that point should be addressed by the council. And four, there used to be a provision for a local density bonus which actually produced several units along East First in the metro east area. I think there's some controversy as far as how many units that ended up producing but it is another thing you can do locally to encourage the

creation of affordable housing without actually costing the developers anything. So if it does pencil out for them having that additional local density bonus was something that was in the WHO before but is no longer in there. Let's see. Five, I do think that part of creating a winning coalition around this idea is also adding additional language around rental protection. So right now that language seems to only apply when there's refurbishment, not necessarily redevelopment. So if someone comes in, gets a nice piece of property and develops 50 units on it,

but there used to be four renters there, those renters have no protections already. So it might be worth considering having some additional protection there, a right to return, right to remain, so forth. Number six is really just kind of yellow light. Number six and final point is it's probably too late for about $40 million that would have come into the city. So the last decision that was made this last September, for my calculation, cost the city $38 million. So those are kind of the numbers that we're working with here. So having a really good idea on a project-by-project basis as far as what the final decision

what outcome will happen. I think it's really important that we do this discussing real numbers. So with that, thank you for having me here. And I think I'm still within time.

Thank you. Celica Diaz.

Sorry. Hello. My name is Celica Diaz, and I live and work at the Pacific Park neighborhood. I work as a property manager for four different buildings that are located in the area. And I was asked to come here today to give perhaps just my opinion. I think that the fees are definitely too low. I know the developers are going to hate me, but I still think they're very, very low. For example, for a five to nine unit, it's $6 a square footage. I think that's definitely ridiculous.

But I would suggest that in lieu of them paying a fee, why not make sure that 50 to 20 percent of the new development or restored development becomes available for low-income housing? I would also like to see that we get or create more developments where there could be condominiums or townhomes. I would love to see more Sarana residents become homeowners because the more homeowners that we have It's the people care more about their community. So that is my my take and thank you very much

Thank you Celica. We had somebody who came in and there were no speaker cards out front And I believe they came in just a few minutes late So Eric Aldretti you're our last speaker in person speaker. Then we go to the online speakers

thank you mr mayor and the council i wanted to thank you for taking the time to delve further into the the who i was on the planning commission when the food when the who was first considered and i supported it then and i support it now i think a higher end luffy closer to what kaiser marston suggested is the way to go and the reason why i say that that's the 17 to 18 And the reason why I say that is because I would ask the council to consider a few sobering statistics. Nearly 54% of Santa Ana residents rent.

In 2019, nearly 60% of renters were moderately or severely cost burdened. And now it's much worse in 2021. The gap between income and rent has increased substantially. And I think that's important to note because that figure is a key driver of poverty. And so I think we ought to consider that when we're making policy. The reality is clear. The vast majority of residents cannot afford the rent in this city. And while I think we're doing a good job in Santa Ana of creating affordable housing, we also have the greatest need in this area, more than our neighboring cities.

So their policy failures can't dictate what we do. we have to do for our own residents. I think it's important to note that the WHO is one tool that we can use for affordable housing. I think the last figure was, and I don't know if this is final, it created 107 units at La Placita Cinco. It also created additional units at Santa Ana Arts Collective and other projects, and I think that's significant. While it doesn't satisfy the problem, it addresses it and i don't think anything that we have in our tools to satisfy affordable housing

can be addressed with one tool we have to have many tools and while i personally believe that the units ought to be built but we shouldn't have it in luffy we should have these units required to be built i understand that there's flexibility that's needed and i think that's what we're giving the developers through this process is a flexible option to to do the include fee and we can then take those in-lieu fees and leverage for more affordable housing i don't think the time is now is the time to lower the in-lieu fees i think this is the time where we increase them from the 5

to the 18. and it's up to the council to decide whether or not that's the best policy but i submit that it is and i think now more than ever it is desperate and our residents are crying out for help and I would ask that you help. Thank you very much. Thank you that was the last speaker.

Madam Clerk do we have any members of the public that wish to address the council that are online?

Yes thank you Mayor. Speakers on the queue may provide their comments on the agenda item. When unmuted please announce your name, ward or neighborhood that you reside in within the city of Santa Ana for the record. You will have three minutes to speak. To request to speak dial star 9 from your phone or select raise hand from Zoom. Before unmuting callers I'd like to begin by reporting the following summary of emails provided as of today. We received one residency not disclosed in support for non Santa Ana residents, one residency not disclosed in opposition, and one non Santa Ana resident in

opposition and with that um zoom id t o'brien if you would please proceed with your comment

uh yes uh mayor sanarmiento and um council members it's tim o'brien i'm with uh legacy partners um really appreciate the opportunity to speak tonight um and um uh you know i'd like to i'd like to first commend the prior city council for the support for the fee reduction um as is many of you know um the our sunflower project um uh was a beneficiary of the reduced fee um and this was

at a time when the uh at the pen the the pandemic pandemic was uh at its highest point um this this was a project that would not have started and would not be under construction today if it wasn't for that fee reduction um you know and and what is the result i mean there's hundreds of jobs including union jobs by the way um and and 100 million dollars worth of investment not to mention the fact that you know the 900 000 who fee that we paid was the first we actually paid since since the fee was increased to $50.

So when it came down, that was the result.

So we do not have a project in the city at this time, but when I see the proposal for the fee increase, coupled with a skilled labor requirement, which to the market equates to union housing, what we see is cost increases here, which aren't supported by the rent that's in the market. And I think the KMA study is inaccurate. It's misdirected because when it really, these fees and increased fees, any kind of impact fee really impacts landowners. We developers work on a static fee, our static return basis. So unless the rents are higher in the market,

you won't know. And the lack of new developments will just put more and more pressure on your city. So, you know, it really concerns me to see that.

And so in any event, you really have a great historical case setting. When you raise the fees to $15, it stopped housing development. When they were lowered for a period of time, it stimulated it. And so I think, you know, it'll be important to find the right balance

and write policy. So anyways, again, I do appreciate the opportunity to speak, and I appreciate your prior support and our ability to get the Sunflower Project started. Thank you.

Thank you.

Zoom ID, Jose, if you would please select the microphone icon to unmute your call.

Persona con el nombre Jose, por favor seleccione el icono de micrófono para activar el sonido en el aparato.

Zoom ID Simon if you would please select your microphone icon to unmute your call thank you

yeah hi my name is Simon Garcia

thank you you may proceed yes we could hear you you may proceed with your comment

My name is Samuel Garcia, and I do recommend that, you know, you guys keep that wages at that because I'm a skilled carpenter. You know, I live here in Santa Ana. I was raised here in Santa Ana. I've lived here for 30 years, and I've seen the city change, you know, and I became a carpenter, skilled carpenter, you know. So I recommend that I stay, you know, the wages go up because I need these jobs to stay local for I don't have to drive so far to work. So I recommend that the wages, the rate go to $18. And I would really like that to happen here. Thank you.

Thank you.

Zoom ID Jennifer Ward with OCBC. If you would please select the microphone icon to unmute your device.

Zoom ID Jennifer Ward, if you would please select the microphone icon to unmute your device and you may proceed with your comment.

Thank you. You may proceed with your comment.

Hi, this is Jennifer. Can you hear me?

Yes, we can hear you.

We can hear you if you want to proceed with your comment, please.

Oh, sorry about that. I was having a connection problem. Thank you. My name is Jennifer Ward and I'm Senior Vice President of Advocacy and Government Affairs with the Orange County Business Council. Appreciate the opportunity to comment tonight and I just wanted to add my comments. I'm sure you know I don't need to tell you all as leaders in your community about the importance of addressing the housing crisis in California as well as the city.

It's a topic in particular that the Orange County Business Council cares deeply about and has done a lot of research and work on promoting anything and everything to enable the production of more housing in California to address that issue and that challenge, especially here in Orange County. So I just wanted to support some of the comments that were included in the Building Industry Association of Orange County letter and ask that we do have an opportunity to conduct further analysis and to really look at the financial impacts of an increase in the in-lose fee.

We were happy to support the reduction of the fee last year that the council approved and would like to, like I said, see a little bit more of that economic impact analysis because you do have a lot of experts from the building and development community at your disposal to get information about what really impacts the ability to build here in Orange County and Santa Ana on the ground. So, would support working with them on looking at those impacts before increasing the fee. Thank you very much. Sorry, again, some technical difficulties.

Thank you. Zoom ID, Biff Baker, if you would please select the microphone icon on your device.

Yes, thank you. You can hear me?

Yes, we can hear you. You may proceed with your comment.

My name is Biff Baker. I am a longtime parishioner at the Episcopal Church of the Messiah in Santa Anna and a volunteer with OCO, the Orange County Congregations Community Organization. And I'm here to make a public comment in favor of prioritizing support for affordable housing. By affordable housing, I mean specifically for the levels designated low income and very low income and I understand we now have a new designation extremely low income and I would certainly include that in this in this advocacy in in OCO we get a lot of education on a variety of

of important topics but among them we've had the the opportunity to study and learn about the housing element and how it influences housing construction in Santa Ana as I'm sure many of you are aware if you've studied this the most recent housing element eight years ago set or seven years ago set guidelines for construction of low-income and very low-income housing as well as for other income levels during the period that they were in effect the guidelines for low-income and very low-income housing were not fulfilled not even close whereas the guidelines

for medium and higher income housing were over fulfilled to a significant degree. And if you haven't looked at this, I definitely recommend taking a look at it.

I've had the opportunity over the last 30 plus years to witness various changes that have taken place in Santa Ana. And I love Santa Ana. I love it more than the place I live. Right now, we see people who have been part of the fabric of life in this city who are being forced to leave by the increased cost of housing. And one of the ladies who spoke in person, I'm afraid I missed her name, but she testified to that.

Others who remain often live crammed into inadequate buildings in undignified conditions, as Senor Medina described a few minutes ago. In the wake of the pandemic, many people face eviction, threatening to aggravate the homelessness crisis. The vision that many of us wish to promote for Santa Ana is a city that offers a healthy, sustainable, and dignified life for all of its residents, with regulatory structures in place to ensure that people live in conditions none of us would recoil at, with green spaces and a community life and thriving small businesses and safe streets

and excellent schools as part of that vision we urge you to prioritize support for affordable housing for the low income and very low income and also the extremely low income communities thank you very much thank you

Thank you. Zoom ID Eric Nelson, if you would please select the microphone icon on your

device. Good evening. Mr. Mayor, members of the City Council, my name is Eric Nelson on behalf of the BIA. I want to speak tonight about this proposal. The last project I built in Santa Ana included a fee of well over 1.5 million dollars. It went right towards affordable housing and equated to what was amounted to about seven dollars a square foot. And with that in mind, I have some concerns with some of the key elements in the KMA study that I think must be addressed before concluding anything. As the baseline and justification for your fee is off the prototype, and it should be a realistic

one based on similar projects with similar COPs. That's not the case here, though. And if you go to the list of the previous projects used to justify this increase, which will be found in appendix a, you'll see the stark difference. I mean, the prototype projects 36 units to the acre. And then when you look at the list of projects that are compared to, you have the one at 607 North Garvey's 18 units to the acre 1642 New Hope is 14 to the acre 1016 Hope Lane is a detached housing project of nine to the acre. Take a minute and Google all of the sites for yourself and you're

going to see real quickly that they're far different than the study that was analyzed. Many of these are really a close comparison to the prototype and many cases are located in other cities with material and different costs and revenue implications. Be curious. Ask yourself and moreover ask your consultants why the analysis included prototypical projects not found in Santa Ana. A project that wouldn't be allowed in most of your residential districts and a density that doesn't work in Santa Ana for the simple fact that the revenues fall below costs.

ask yourselves do you want to implement a policy that results in projects that don't meet even calpers minimum requirements for returns you know calpers heavily invest in residential projects and they wouldn't invest at the return rates suggested in the study the underwriting also references project returns based on costs and i think that's an important thing to know because what it shows is a lack of detailed understanding of home building the public markets and acceptable returns and our profit is a profit based on net revenue not development costs which means that

profit on the prototype project that's compared is not 8.5 percent it's actually less it's eight percent or it's less than eight percent and the justified return the debate to fiat results in sub five percent and it's important also to note that that didn't include labor restrictions these are critical because the prototype relies on density but doesn't account for the impact on revenue density increases so do the cost the costs go up and we all know that because many people are living under the same roof sharing the same walls and the same floors the requirements are much

higher higher fire resistance noise seismic structure and at the same time your value goes down so um one thing that's super clear uh is that the projects aren't similar and you really got look at that you know nobody's saying don't do any fees but it's got to be measured and it's got to be one that's sustainable and we don't believe i certainly don't believe that this is a sustainable strategy nor will it result in any fundamental increase in housing or fees thank you thank you

caller with the last three numbers 925 if you would please select star six to unmute your call or select the microphone icon to unmute your call.

Thank you. You may proceed with your comment.

Hello. My name is Concepcion Rodriguez, and I am a resident of Santa Ana. I live in a lazy neighborhood. I agree with the changes that the committee is recommending to make the housing ordinance stronger. We need more affordable housing for our families in Santa Ana. and not housing at market costs. The changes will ensure that the ordinance does what it was originally intended to do and away the benefits of community. I ask the council to accept the recommendations and continue with the process of amending the ordinance. Thank you.

Thank you.

Zoom ID, Yelanda Martinez, if you would please select the microphone icon to unmute your call.

Thank you. You may proceed with your comment.

Zoom ID Irlanda Martinez, you have successfully unmuted your call. If you would please proceed with your comment.

Zoom ID, Irlanda Martinez.

Hi, can you hear me? Oh yes, now I can hear you.

Oh, I'm sorry, I was having some issues. Thank you. Good evening, Mayor and members of the council. My name is Irlanda Martinez. I am a commissioner with the Community Development and Housing Commission. I'm also a public policy consultant specializing in affordable housing, and I'm a resident of Santana. first off i wanted to congratulate staff and the ad hoc committee on some great recommendations i think that you're all pushing us in the right direction i also wanted to address two things on the suggested changes my only concern is that the trigger that is included in the language

i don't think it would be a good thing i wholeheartedly believe that the inclusionary requirement should apply to all new development above four units and not just those that go above the density requirement although i know developers will gasp at the thought of all new development being requirement required to have an affordable housing requirement when we think about it that would only generate a number of units equivalent to 15 at most of all new developments if you ask me that's really not a lot and yes building affordable housing is expensive but the money

generated in the market rate development business is also significant i would also like to encourage the city to add a provision that allows for who funds to be used to support our local community land trust which would help further our efforts to develop more affordable housing in the city i also wanted to address some arguments that are often brought to the table and that we have already heard against inclusionary housing the first would be that increasing fees will discourage development i think that this is often used by developers to instill fear in communities by

making us believe that if we don't play by the rules the game is over however i would argue that the reason all of these folks showed up tonight is because developers have turned san anna into a gentrification hot spot ready for explo exploitation and their profits are being threatened um sanana is in a city that suffers from a shortage of developer interest and everybody wants to build here so the city has leverage frankly if developers say that housing development will be discouraged over increased fees i say let's find out the second argument is that more

supply will lead to lower rents and while there is a small truth to that the market will not regulate itself in time to make rents affordable you don't have to take this from me though san francisco's chief economist ted egan conducted a study in 2012 where he determined that the city would have to build 100 000 units by 2020 to significantly increase affordability at large for reference that is how many units san francisco had built since 1920 which was almost 100 years so egan also mention that there were other solutions like down 15 seconds left program which is 75 000 and

subsidize the low market rate housing for a quarter of the market and we are only looking at 15 percent thank you all and have a good night thank you

zoom id victor cow if you would please select the microphone icon on your device

Hello. Hi. Thank you. You may proceed with your comment.

Thank you. Good evening, Mayor Sarmiento and members of the city council. My name is Victor Cao. I represent the California Apartment Association. The California Apartment Association represents over 70,000 professionals in the rental housing industry who own, operate, and develop multifamily housing. Our members represent over 2 million units of market rate and affordable housing throughout the state of california we appreciate st anne's efforts to ensure the city has the proper tools to meet its affordable housing needs we do have some concerns that

we would request that you look further into namely are the assumptions that are in the kma study as our as my colleagues from the building industry association have pointed out there was a period where the fee was $15 an hour and not one permit was issued many of those permits that were pulled were grandfathered into an older fee. And then secondly, while new projects were entitled, very exciting projects that were entitled in this period. Again, not one

permit was pulled under under the old fee of $15 an hour. Developers want to do business with the city but they can only do so when it's economically feasible as it was commented these units the the fees essentially get paid by renters and home buyers it's essentially a tax the higher regulatory costs only foster an environment where only high income and luxury housing is developed that is essentially the consequence of challenging regulatory environments

And you see the stratification up and down the state where more high income and luxury developments, smaller units that are being developed, which is very counterintuitive to the stated goals of the ad hoc committees, ad hoc committee in which you identified, which is you want larger three bedroom units to accommodate families within the community. The concern, again, is that these are all job-killing and housing-killing policies. You may, for the developments that are economically feasible, again, they're paying higher construction costs and therefore charging higher rents.

And then some of those monies may trickle down into this inclusionary housing fee. And so when you look at this multiplier, if the regulatory environment is so challenging that there's zero permits that are being pulled, then there are zero dollars going into that fund.

Therefore, that is something that you would have to look into. So it's important that we look at the assumptions of the fee study and look at real comps, as some of the other speakers have alluded to. 15 seconds left. This issue is exasperating the issue where middle-income buyers and renters are forced to either buy up or down, meaning that they are either buying up and reaching to be more housing burdened or they're renting down and essentially gentrifying into lower housing stock. The central issue is supply and demand. And so we look forward to having this further discussion with you. Thank you.

Thank you.

Zoom ID, Santee Kumjin, if you would please select the microphone icon. Thank you. You may proceed with your comment.

Good evening, Mayor and City Council members. My name is Santi Khomjian and I'm the current president of the Building Industry Association's Orange County chapter and I'm a residential developer with thousands of units under development throughout the state. Undeniably our state, our county, and your city are in the midst of a severe housing crisis driven by a lack of supply. While the reasons for the lack of supply may seem complex, At the end of the day, it's rather simple. A housing crisis because of housing policy decisions made by local officials just like yourselves.

All too often, politically popular and usually with good intent, elected policymakers make the decision to burden new housing development. In nearly every instance, these policies, just like the WHO that's being discussed tonight, effectively limit new supply by making new development financially unfeasible. Now, I understand there may be apprehension by some to take the word of an industry advocate and a real estate developer. But the city's been down this path before, and the results

are crystal clear. Just look at the city's own data. Look at what happened with the old fees and then look what happened when they were decreased. When the city made the prudent but unpopular decision to reduce the WHO fee, a significant number of units started to move forward again. The bottom line is if you want to stifle new development, collect zero in fees, then by all means move forward with the proposal that is being recommended. However, if you want to actually see new units built and some fees collected, then don't change the current policy. Thank you for your time this evening.

Thank you for your service to your community, and best of luck.

Thank you.

Zoom ID Cezan Kovarubias, if you would please select the microphone icon on your device. to unmute your call.

Thank you. Good evening, council members and Mayor Sarmiento. Thank you for taking this important discussion today. We, as the Kennedy Commission, would like to support the recommended or recommendations to change the fee and also the application to ensure that Santana has the ability to meet housing needs in the community. as was mentioned earlier by most of the comments from developers their intent is not to build housing for santana residents who need affordable housing their intent is to build market rate

housing that's going to produce the best profit for them just as a quick reminder 80 of the population santana falls into what's called a low and very low income category since most of the families in Santana make around $70,000 or less a year. So it's important to make sure that when we are doing this, we're thinking about why we are trying to make these changes. You're trying to make these changes to create balance in housing development. Santana has done a tremendous job in creating opportunities for development as is evidenced by all developers participating on this call and the amount of development is happening in the city.

What the community continues to focus on and to voice is that housing that's being produced is not affordable. And so therefore we need affordable housing. And in the case of development, developers are saying, we don't want to produce housing that's affordable. We would rather pay a fee. So you Santana, you have the burden to provide housing for your residents, because we're providing housing for other folks who can afford higher rents. So if that is the case, I would also want to remind folks who are citing the study that there's a very key part of the study that indicates the cost to produce an affordable housing or a market rate

unit could be anywhere from $250,000 to $400,000 per unit. Yet the fee that's being placed, even if it's at $17 or $18, is asking the developer to pay a percentage, roughly about 4% or 5% of what it would cost to develop affordable housing in your city. And saying, here's the 4% city, you go find all the other funding sources. And that's important because today, in today's budget or the budget that the governor proposed, he proposed $12 billion for affordable housing

and homelessness and there's federal resources that are also coming down the pike but santana will only be able to leverage that money to create affordable housing if you have your local funding and that's where it's crucial that you have a fee that is representative of what would allow you to be able to leverage that funding and five five dollars a square foot is not allowing you to leverage a lot of money it'll take years for you to build 10 seconds left a fund that would allow to then leverage the funding that's available thank you for your participation in this great

meet in the city thank you zoom id isuri ramos if you would please select the microphone icon on your device hi can you hear me yes we can hear you you may proceed with your comment

thank you good evening mayor and council my name is isuri ramos i am a resident of the city of Santana and a member of the planning commission. I come to you tonight to speak in support of strengthening the house opportunity ordinance. We heard developers think the previous council for the fee reduction. And I want to remind the council and the public that just before the fee was reduced, city staff helped stakeholder meetings in 2019 and staff's recommendation was to increase the new fee from the then $15 and to remove triggers so that the HOO would apply to all new residential development over four or five units.

As you consider your options, I ask that you reflect on the great need that exists within the city and the police from community residents for relief from this housing crisis. For profit and market rate developers have called in tonight in their self-interest and not in the interest of Santa Ana's most vulnerable resident. I support the ad hoc's recommendations and I ask that you go beyond them. Developers can a 40 fee at $17 or $18 and the HO should apply to all new residential development over five units. as your city staff was recommended in 2019.

Thank you. Thank you.

Zoom ID OCCCO, if you would please select the microphone icon on your device. Thank you. You may proceed with your comment.

Good evening, Mayor Sarmiento and honorable members of the council. My name is Karen Alvarado and I am the lead organizer for Orange County Congregation Community Organization, also known as OCO. I work with faith-based leaders in the city of Santa Ana, many of whom are low-income or, as categorized also, very low-income residents. They are folks that are committed to the well-being of their communities and enrich the city of Santa Ana. I am here to urge the council to approve the increase of affordable housing units for low-income and very low-income residents, as the Ad Hoc Committee study recommends.

This investment in our most vulnerable communities will be a great first step to help end the cycle of poverty for our residents. As I'm sure most of you know, our folks spend well over 50% of their income on housing with minimal spending power. So affordable housing, you know, as I've heard tonight, unfortunately, is a topic that's largely misunderstood by folks that oppose it. And there's a lot of myths and misconceptions about what this development is based primarily on fear around negative stereotypes, property values, and the change it brings to neighborhoods,

all of which are common arguments in opposition to new affordable housing for our community.

However, is that the lack of safe and affordable housing is one of the major reasons residents are driven out of the city, also lose potential workers and discourage growth in their local economies and not increase it. So as you know, we beyond these full study facts, our multi-faith community believes it is our moral obligation to support those that need it most. And we're all trying to recover from one of the hardest times coming out of the COVID-19 pandemic. And as we've seen before, Santa Ana was one of the hardest hit cities.

So we are here to stand with our brothers and sisters who are still struggling to get back on their feet because, you know, we refuse to engage in creative and compassionate ways to help meet the pledge that you all made at the beginning of this meeting to serve and to provide liberty and justice for all. And housing justice with dignity cannot be the exception. Thank you and God bless you all.

Thank you. Thank you. Zoom ID, Steven Lamote, if you would please select the microphone icon on your device. Thank you. You may proceed with your comment.

Can you hear me?

Can you hear me?

Yes, we can hear you. You may proceed with your comment.

Mayor, City Council members, thank you so much. I just had a neat procedure. Otherwise, I'd be there in person. Thank you for allowing the remote option. It is still very beneficial. Steve Lamont Building Industry Association of Orange County Executive Officer. As you know, we submitted a letter. It was referenced a couple of times. And I just kind of wanted to go over a couple of those points. I've kind of lost count of how many times, you know, we've talked about this issue at the city council, because it's only been a year since this policy was brought forward to the city council, because it was drastically hurting development.

People, you know, a couple of speakers have said, let's see what would happen. But as you know, the amendment responded to a simple fact, which was no permits were pulled after the 2015 increase. 2,900 units were approved. And this is directly from staff, but yet not one permit was pulled. So in effect, this means no new housing units at all are moving forward. No new affordable dollars are going into the city accounts. And this has been said multiple times. So, you know, I guess we're, you know, we're having trouble in terms of why this would come back to the city with amendments that are even more drastic than before.

I mean, going through this policy, you're looking you're looking to apply the fee to smaller developments. You're, of course, looking to increase the fee for the 20 units or more projects looking to mandate a certain type of labor, you know, benefiting a small group, which would just make it more difficult and more expensive to build the units. And I know this council is very aware of what the BIA would say and what we, you know, what we obviously think about this policy in general. And we're not talking about going to zero. We're just talking about keeping the policy, you know, where it is and where it's been working.

But you, again, you, I know you're aware of this. And so we, we're trying, I guess we're trying to figure out why. And so we have technical data supported by Kaiser Marsh and our KMA that we had some of our members look at. I know some developers have referenced it in the past, and I just want to touch on some of the discrepancies that we have seen and is in detail in the letter that I submitted. And please keep in mind, you know, our members, the developers, they're literally building these projects. They're looking at the land. They're employing people. They're paying these fees.

And, you know, with all due respect, I'm not aware of Kaiser Marston, you know, doing this. And so in looking at some of the assumptions, as was kind of mentioned prior, you know, the acquisition land costs are significantly understated. And there, you know, BIA members, the actual projects demonstrate higher land costs, you know, upwards of 100,000.

15 seconds left.

Realistic. Construction costs are significantly understated. Parking costs are understated. and they don't even state what type of parking they're actually referencing, which if you look at underground or above or on the ground, all of them are drastically different in terms of cost. And so this study needs to be looked at. It's a little scary that the city paid for this in terms of the baselines to actually create and vote on the-

Thank you for your comment. Your time is up. Thank you.

Zoom ID, Carla Juarez, if you would please select the microphone icon on your device.

I will not be able to proceed with your comment.

I am a resident from Ward 4. Thank you for letting me be here. I am not sure why I am not sure why say we wanted more housing we said we wanted housing that is affordable a person who earns minimum wage cannot afford to live by themselves 15 an hour for 40 hours 10 4.3 weeks gives you

2 580 that's before taxes after taxes at 15 gives you 2 193 most places require for you not to spend more than 30 percent of your income in rent in this scenario after the 30 percent you would only be able to pay 658 dollars for a place i only see rooms being rented around that price and they don't rent to senior folks or families or family with a kid or kids majority of the san jana residents are renters about 30 percent of san jana are rent burning i recommend for the required amount for

affordable housing units to be in this to be increased to at least 30 percent in the event that the developer does not want poor residents low-income families in their community and would rather pay to not have them live there to not have low-income families live in their units I recommend that the fee, the in-lieu fee, to be larger than the total cost to build 30% affordable low-income units.

This would help as an incentive to the developers to be inclusive by building affordable housing on site. But if they still would rather pay their fee to not have low-income families live there, I recommend the money from the end of fees we collected and go to investing in community land trust a community land trust is owned by the community in the city and is a strategy to make sure that's affordable housing is built and it's beneficial and responsive to the local

residents and neighborhoods a community land trust has a community control through the community land trust model and would give local residents greater oversight into the management and even play affordable housing it would help build affordable housing i also wanna i the arena numbers if you look at those which is the required amount of housing to build there's six times the amount of houses 15 seconds and above um housing and not even close to that number for low-income families. So I'm saying that we are, like,

we're focusing on making profit, and it should be people over profit. I mean, people over profit should be our goal during our time on Earth. It is the life that we affect that will have the greatest rebel in time. Thank you. So how are we investing in the greatest access? Thank you.

Thank you. Zoom ID, Daisy Cruz, if you would please select the microphone icon to unmute your device. Hi, can you hear me? Yes, we can hear you. You may proceed with your comment.

Awesome. Good evening, Mayor Sambiento and City Council and members of the community. My name is Daisy and I'm with the Kennedy Commission and I'm calling in to support the proposed amendments to the housing opportunity ordinance the city of santana is a renter majority city and despite the city's progress towards meeting its regional housing needs assessment arena allocation for very low and for very low and low income housing housing there continues to be a great need for housing that is affordable to its residents the current pandemic has increased the economic and

housing pressures on low-income families in Santa Ana. While the city has seen an increase in production of affordable housing, there has been a larger increase in above moderate housing with average rents of $2,000 to $4,000. None of these above market rental units are affordable to most of Santa Ana's working families. The city needs to update the in-loop fee from $5 to $15 or above to be in line with a fee that is fair and allows the city to create the In-Loo fund that will help build affordable housing for its residents. The proposed fee is in line with the region's In-Loo fees and it has been recommended based

on feasibility study of Santa Ana's housing and real estate market. The WHO should also apply to all residential developments in the city. Additionally, the city needs to make new construction of affordable housing a priority when using the housing fund to increase availability of housing options for Santa Ana residents. Diversion of these funds to other programs will not be directly related to increasing and improving the supply of affordable housing. Thank you.

Thank you.

Zoom ID Lucero, if you would please select the microphone icon on your device to unmute.

Thank you. You may proceed with your comment. Hi, my name is Lucero Garcia Mondragon and I'm a board member of the very first and only community land trust in the city of Santana Thrive Santana which has been a form to include the residents and center their voices in the development of land and I'm here to communicate that the city of Santana needs more affordable housing and not less with stronger requirements for developer developers to provide affordable housing for

santana's low-income residents and more units add deeper affordability it's important for the city of santana to include community land trust such as thrive santana in the distribution of affordable housing funds to ensure affordable housing projects to respond to local residents needs and concerns and funds from the housing opportunity ordinance should include again community land trust as a strategy to make sure affordable housing is beneficial and responsive to local residents and neighborhoods and community control through a CLT model would give local residents greater

oversight into the management and even plain plain field with affordable housing developers So please, I ask you to consider my comments and the comments of those who have spoken before me. Thank you.

Thank you.

Zoom ID, Jesus Santana, if you would please select the microphone icon on your device. Thank you. You may proceed with your comment.

Hello, Mayor and Council members. I think for me, I just want to say thank you for inviting the Sullivan and Action Group. I'm a community organizer who's been trying to support the Sullivan community. And again, the Sullivan community is a unique community in regards to housing. It has mobile homes, apartments, condominiums, and single-family homes. And I think when we talk about affordable housing we also got to address the the cost of um utilities as well and ensure that when we are creating these new properties you know for development overall is how can we make

sure that there's programs that are regulated uh by the city because sometimes for example with the mobile homes like guadalupe who was sharing earlier they have they have an issue with the water and they're unsure on who to address or who to go to because when they try addressing it with their mobile home manager, they tell them we can't help you. And when they've gone to the city, they're like, we're sorry, we can't help you. So I think it's making sure that moving forward, when we talk about creating more affordable housing, how can we make sure that these utilities like water, electricity, gas

are also thought about because we need to make sure that we are doing more than we can to support our community now. And I think moving forward, I would support and I am in favor of the recommendations that the ad hoc has proposed, as well as the community land trust. I think funds should definitely go towards that because we don't need no more property owners who don't live here or who don't know the community at all. We need to make sure that people who own property are our people, Santaneros. I think overall it's time that we need to make sure we are allowing our people to get the dignity they deserve. Thank you so much.

Thank you.

Zoom ID Luis Sarmiento, if you would please select the microphone icon to unmute your device.

Thank you. You may proceed with your comment. Hello, can you hear me? Yes, we could hear you. You may proceed with your comment.

Thank you very much. My name is Luis Armiento. I'm program manager for our community land trust, Drive Santana. And thank you for hearing us tonight. I believe that the COVID-19 pandemic showed us a lot about who we are as a city and showed us a lot about the right way to take care of our most vulnerable community members and how that is a way to take care of all of us. And the same thing can be said about housing development.

We know that there is a need for housing for the lower income brackets in our city.

The rolling back of the affordable housing requirements was one of the actions of the,

if I remember correctly, of some of the outgoing city council members who were pushing us in a different direction. And I want to believe that the current city council knows better and understands that we need to work with developers who want to work with the community. If there are developers who don't want to build affordable housing and who don't want to work with local residents, then we don't want them here either. We want to work with those developers who understand the importance of partnering with residents.

And that's also why we are including the request to include the community land trust as a potential strategy within the WHO as a way to make sure that affordable housing development is also happening in partnership with local residents. and we could talk about a lot of numbers about the need for housing for lower income families. We know that Santana is a majority renter city, that two out of three renters are rent burdened.

One out of three are extremely rent burdened. And with families that make between $20,000 and $35,000 a year, 95% of those families are remburdened. And so these are the families that make Santana who we are. And these are the families that you're hearing from tonight. And so we invite you to make the right decisions when it comes to the housing opportunities ordinance. Thank you.

Thank you.

Zoom ID, Dave, if you would please select the microphone icon on your device to unmute your call.

Mayor Sarmiento and council members Dave Elliott, San Antonio Chamber of Commerce. I think you hear me?

Yes, we can hear you. You may proceed with your comment.

Just an observation or comment.

We all come through and we're still coming through the pandemic. And my concern is that we start putting additional regulatory things on our businesses, as well as additional fees and taxes. I don't think this is the time to do that right now. I think there's further study that can be done based on what the BIA has shared. I read through their report earlier this afternoon, and I think that there's some things in there that we need to look at further before we go back and increase the fee. I'm just concerned that we need housing. We all agree we need housing. We need affordable housing.

But how we get there, we're not maybe on the same page right now. I'm concerned that when we were at $15, we were getting no business, and when we dropped it to $5, we started getting little business when it comes to our affordable housing. opportunities. So I'm just concerned about the adding additional regulations right now, the timing of this, especially. And we just had this discussion just a little over a year ago. And my understanding is right prior to that, we were getting nothing when it comes to the $15 fee. But since then, at the $5 fee, we've had a couple of projects and some income that has come from

that so that's my concern um and moving forward that do we not uh just jump on jump on this right now that we give it a little bit more time and further study again it's not a good time coming out of the pandemic and we're still not out and then to increase fees taxes regulation so thank you for the work that you guys are doing and appreciate uh and we'll continue to support all the decisions and things that you make there at City Hall. Thank you. Thank you, Mayor. That

was the last speaker. Thank you, Madam Clerk. Let me go ahead and just bring it back to the council and staff. And I wanted to ask staff if there's anything that they'd like to provide in addition to what they presented early on, or was everything fairly comprehensive? I know we've spoken about this previously, but to the extent there's something that staff would like to add that would be appreciated the only thing we wanted to add was to

provide a some of the next steps if the council as a body provide directions for us tonight with information on how to make the changes we are prepared to work through the ordinance and our estimated timeline is that we can initiate the public hearing process between 45 to 60 days if we get clear direction tonight how to proceed with some of these recommended changes great and I know

there was a lot of discussion about the study that was mentioned by Kaiser Marsden and I think that I'm not sure if it's a recent study or if it's a study that maybe was done last year that was maybe modified and updated for some for for today's discussion or for the discussion on the proposed amendments but do we have the staff person, Kathy Head, on the line in the event that anybody on the council has a question?

We do. Kathy is on the line.

Great. So with that, I'll bring it back to the council if there's any sort of concluding comments or any additional questions.

and I certainly appreciate everybody who came to the council meeting in person and those who waited online to go ahead and give us their comments and share that. And I want to thank Council Member Phan for making this additional opportunity available because we were going to go without these comments that I think were valuable and important for all of us to hear. So thank you, Council Member, and let me go ahead and bring it back and see if there's any questions or comments from the city council.

I have some questions.

Councilmember Phan.

Thai Viet Phan

Thanks. This is for Kathy, our consultant. Just some questions to follow up as it was brought up multiple times by the speakers, our commentators. And so I guess I just wanted some clarification. So the first issue, I think it was mentioned in the BIA letter on page 6, that condo construction is cheaper than rental construction. Can you explain that or why that is the case? Because they seem to view that as kind of the opposite of what it would typically be.

Kathy can you raise your hand please?

Kathy is able to unmute herself. She's on the panelist side. Kathy Head if you can please unmute your.

I was waving my hands but that didn't really work.

If I could just answer more generally than specifically. There were a number of points made about the cost and the analysis, and I'm sure many of them are valid. And I think that anytime you do a prototype analysis, there are going to be other prototypes that are more expensive or different product types. What I wanted to really focus on, though, given the opportunity to talk, is if you look through the whole analysis, the real focus, The only reason I did cost at all, honestly, was because I wanted to figure out what was really a supportable production requirement before I figured out what the in-luffy was.

Because what gets really lost in these studies everywhere, not just here, is what you're really trying to look for is the affordability gap. What's the difference between the market rent and the affordable rent? What's the difference between the market sales price and the affordable sales price? But what happens commonly or always is that those gaps can be very large and not feasible to place all of that burden on the development community. And so the only reason, honestly, the only reason that I did any cost analysis at all was so that I could then mitigate the difference in the affordability gap.

If we did this just straight on a 15% requirement with the standards being discussed, the fee would be twice as much as my analysis. But what I did was I said, oh, well, let me go through it because I think that's a problem. And I mean, clearly you don't want a program that's not feasible that stops development. I don't think that's anyone's objective. It's certainly not mine. And so I'm most willing to talk to the development community at large about that component of the study, the cost component of the study. But I don't want to lose track of the fact that the in lieu fee is a surrogate for production.

And a $5 fee, as I believe any number of people mentioned, is only going to give you a fraction of that cost to produce that 15%. and the $15 only gives you a bigger fraction of the cost to produce it, but it doesn't actually fill the whole affordability gap with a 15% requirement. So yes, I mean, I really prefer not to go line by line on development costs really ever, but certainly not in this kind of a setting, but I'm happy to sit down with anybody and talk about it. And clearly I'm open to discussion on it.

Thai Viet Phan

Great, thanks. And so, you know, I'm asking these questions because we did get a letter that was very detailed and I do appreciate that. That's why I think many of us up here wanted to have this public discussion on this issue. And so the other question is just really regarding, you know, a comparison of your prototype with, I guess, current scenarios of the cost of building affordable rental projects by BIA members. I understand that you're using a prototype, so it's a little bit of an amalgamation of a number of projects.

Thai Viet Phan

But maybe you can kind of help us understand why it seems the price differential or the cost per unit is so, or it seems quite large, or maybe you don't have an answer for that, but I figured I'd ask.

No, it's a fair question. It's absolutely a fair question. I think another thing to think about, and again, just talking about big concepts and sort of logic, is all of the focus on the folks who are opposed to raising the fee was discussing how my costs were too low. The flip side was never discussed about how perhaps my rents and my sales prices were also too low. and if they're not so if my costs are too low but my rents or my sales prices are correct then market rate development is not feasible at all i mean if you do the math with you just raise

all the costs that leaves the rents and the sales prices forget affordability it's just not feasible now if that can be true by the way that can be true that development is not feasible but ultimately what would happen when it's not feasible is then and somebody mentioned this was then land prices adjust. They adjust either up or down based on changes in the marketplace. And so again, happy to discuss it with anyone, but I do, I always do have a, I almost laugh to some extent where I always hear my costs are too low, but I never ever hear that my rents are too low. And so I think that's a really important thing

to keep in mind when you're looking at all the comments. And I think if you look at the comments, and I think if we had the, you know, I've done this in other cities. I did this in Pasadena where I sat down with the development community and we went over all the assumptions. And, you know, the first few times through, it was like the costs were very high and the revenues were low and projects just didn't look like they worked at all, even though people were building all over Pasadena. So there are limitations to performance from both sides. There are limitations from my side, certainly,

and limitations from the development community side. Performance are only as good as the numbers you put into them. And, you know, I did the best I can. I'm sure they're doing the best they can. But I think that's important to recognize, just to stay within the concepts. I did want to make one more comment while I'm talking. One gentleman mentioned that I measured profit as a share of development costs rather than value. The reason I do that, I do it for a very specific reason, is because I'm doing both market rate scenarios and then comparing them to affordable scenarios.

and in fact when you have an affordable scenario in there then your revenues are lower well there's no rational reason that a developer would want to take a lower percentage return because they had a requirement you know so a lower percentage return on those units because they rent for less or they have a lower sales price so what i use i use specifically for inclusionary i use development costs as a measure because development costs stay static and so when when you're imposing those lower prices they don't automatically get this lower profit percentage so that that's the reason I do

Thai Viet Phan

it okay and apologies if I'm not understanding but can you I guess better clarify for me when you're saying no one's complaining about your rent estimates being too low what exactly do you mean are you saying that you know your the estimates that you put into your report is not something that they think is improbable or impossible? I think it means that it doesn't

advance their argument. No I do. I mean and I don't blame them. I mean I think if you say costs are too low then it shows that they should be higher and if they're higher then the project's not feasible. But if you don't then look at on the other side on the next page and evaluate the rents or the sales prices in that same light and say, oh, well, maybe those seem too low too. Or, you know, maybe they don't. But I mean, that's my whole point is nobody gets up ever and tells me my rents or my sales prices are too low. Ever. But they often tell me my costs are.

Thai Viet Phan

Got it. The other one I wanted to mention was regarding the reasonable rates of return. You know, the letter mentions that you had 4.6%. The developer said it should have been 5.25%. You know, what is something you typically see in your experience?

Now, that's a really good question. And the point is, again, that's not saying that that's a reasonable return. That's saying it's the return that falls out of my market rate analysis. and so again I'm only doing a comparison of what does a market rate project return versus what a project with affordable units returns so again if you start and you say oh well there's now a threshold return which is true every developer will do that for a project they'll say what's my threshold return you know that I'll go forward with my concern with doing that

methodology for an inclusionary policy or an affordable policy is then again, you're starting off by saying the project isn't feasible as a market rate project. And again, this is again, because pro farmers are, you know, they're just a tool. We know they're feasible because they're being developed. And so it's a relative number. It's how much does imposing that affordability requirement change the return not was the first return reasonable you know it if the return was too high i don't adjust for that either i just it's a marginal or an incremental analysis to say

what is the impact of this one change and this one change is imposing affordable housing

Thai Viet Phan

restrictions on the project okay so for further clarification if say that the project that you have here, 4.6% is saying, okay, we're requiring X number of affordable units. If the developer pays the fee and builds no affordable units, you're saying that 4.6% could be higher?

Yes.

Thai Viet Phan

Got it.

Oh, look, now I'm on the screen.

Thai Viet Phan

Hello. So just, okay, so because the vast majority of developments in the city that, you know, fall under who requirements do not build affordable units right they pay the fee and then they build market rate and charge whatever the market will bear so that that also helps me better understand that the other thing was just a parking question and the cost of parking um maybe i'm a little naive or i haven't been to enough developments in the city but i personally haven't experienced any underground parking here in santa anna when i was living in la there were many of those and i know

Thai Viet Phan

those are quite expensive so yeah the other thing was you know your parking estimates were too low did you take into account what type of parking did it not

matter no yeah yeah no it does so it absolutely doesn't and you know land cost plays into what type of parking you do I think I keep banishing to here sorry land cost play into that so if you can buy land and expensively then you won't build intense parking like underground as land prices get higher it's cheaper to start building underground than to buy more land so that's that's why great

Thai Viet Phan

that actually makes a lot of sense and I don't know what's happening so the other question I had is you know one of the developers spoke to the estimate of land costs being too low you know at two million dollars whereas in his experience it's five or six million dollars I guess how old is that land cost estimate that you have there and what is your experience today yeah so

right now at the moment I'm not working on any projects in Santa Ana and so and land prices change radically and have changed radically over time again it's conceivable it's absolutely i'm not denying many of the contentions you know as being plausible i'm just once again saying then the argument would then be then it's not feasible to build market rate even if there's no inclusionary and that's just not being borne out in fact um okay thank you and Can I just answer a question you didn't ask just a minute ago, but you sort of almost did? The reason people pay the fee instead of producing is twofold.

One, it's significantly less than the affordability gap, and this was mentioned numerous times in the public comment. It's dramatically less than the gap between the market rate price and the affordable price, and so it just makes good economic sense to pay the fee. And the other reason is developers love certainty. and so they know what the fee amount is and then they get full upside potential on all their units but the key and this always gets lost in inclusionary is you're really measuring against a production requirement and so if that part gets lost in this analysis then then it loses

it's sort of at that point you say well why do the analysis at all just pick a fee and use it

Thai Viet Phan

Thank you. And the last kind of topic I wanted to ask about is, and this wasn't in the analysis, I don't think it was in the original request for the project either, or excuse me, the report either, but a number of speakers had mentioned the use of skilled and trained workforce as well as a local hire requirement. I think one gentleman had mentioned potentially doing a tiering system in which a fee would I guess step down based on the number of skilled and trained workers that they use I guess what is your experience with that do other cities to use this and do

you have any thoughts on that further there are definitely cities that have imposed skilled labor requirements in their programs and there are cities when the majority of cities that I work in have not it is another impact on cost You know, it does have that impact. It needs to be factored in because the use of skilled labor, well, great from policy perspectives and a number of very good reasons. It doesn't add value to the project. And so it's another cost that's then not recouped with additional sales prices or additional rent. And so much like much like the in Luffy, it's just another thing that reduces profit.

And while I think it's important not to establish guidelines, be it inclusionary, be it skilled labor, that deprive a developer of a reasonable return, because if they're not making a reasonable return, and this point was made a number of times, they just won't develop. I mean, that's true. You know, if they're going to not make as much money as they could make in another community or they could make on another type of project, they'll choose the other community or the other type of project.

Thai Viet Phan

Great. Thank you for that. That's done with my first round of questions. Thanks, Mayor.

Great. Thank you, Councilmember. Any other questions or comments from the Council?

Phil Bacerra

Councilmember Becerra. Thank you, Mr. Mayor. I'm not going to belittle, I'm not going to continue to repeat myself, but I will just in this one instance. 15 times zero over five years is zero. We had zero dollars coming in. Now my colleagues with only five months under its belt, the revisions five dollars a foot times five months equated to three point seven million dollars in in lieu funds that went to helping sustain our community, that help with down payment assistance, which by the way is something I don't see in this draft, which is kind of concerning to

Phil Bacerra

me. It goes towards rehabbing units that the Covenant is about to expire, which is important because if you have an affordable unit that became affordable back in 1969, it probably needs a little work by now. Just saying. The other thing, and I've said this last time, is that with the WHO altogether, if we didn't have a WHO, we would still be generating affordable housing. In fact, out of the 844 units that we produced that were low and very low, only 107 received any sort of financing related to in lieu funds from the WHO. That's it. So in other words,

Phil Bacerra

affordable housing will be constructed in Santa Ana as the track record has shown. One of the comments I wanted to address that I heard from the community that talked about, you know it would take years to build the WHO funds so that they can leverage them for other affordable units. As we just saw over the last five months it won't take years if you have the right policy. It'll take months. 3.7 million in five months in case you didn't catch that the first time. Okay and then as far as the study goes we could sit here with the scalpel and pick it apart and say

Phil Bacerra

well they didn't account for this the cost was too low here the cost was too high there but here's a very telling thing the study talks about scenarios it talks about prototypes we've had five years of fifteen dollars a foot and it equated to wait for it zero zero whereas five dollars a foot equated to 3.7 million in five months so we don't need scenarios we actually have a track record that shows we have history that shows it it's not hypothetical it's right there in black and white. It's scientific. It has shown that when we reduce that fee,

Phil Bacerra

we were starting to attract, not only did we get sticks in the ground, we got construction going. In fact, there are folks here from the carpenters and the laborers that actually were building, or are building projects here in the city because of that. And so I would actually say to my colleagues, if there's anything I would like to see us further study, and preferably with somebody that could actually have experience in this particular arena, and that would be, I would like to see us analyze a sliding scale when it comes to utilizing a local skilled trained

Phil Bacerra

workforce and to see how we can do that where taking the existing WHO fee and looking at how we can incentivize developers through a reduction in that fee to make sure that we're bringing in that local skilled trained workforce because you know I think as one of my colleagues had said during the last time we talked about this you know if we can improve. It's not just about trying to artificially suppress the cost of housing, but to actually put money in the pockets of our workers. That's what's going to allow for housing affordability. You know, it feels so much better to see somebody be able to afford it because they've got a good

Phil Bacerra

paying job. They've got the dignity, the pride that that's what's happening. But no, we're not talking about that. We're taking Ecom 101, ripping up the book and saying supply and demand, that's That's crazy. No, but let's look at it from how we can actually make housing affordability work by actually employing that local skilled trained workforce. Let's incentivize developers to utilize our local workers. One gentleman came up here and said, I don't want to build in LA. I don't want you to either. I want you to put some sticks in the ground right here in Santa Ana and help us address the housing crisis here when it comes to supply.

Phil Bacerra

We need supply. So those are my comments at this moment, Mr. Mayor. So I hope that we will if if there's any sort of homework that we do after this I'd like to see us analyze that particular aspect thank you great thank you for those comments let

me bring it back to anybody else councilmember Lopez yeah thank you mayor

Jessie Lopez

I have a couple questions for staff you know what we learned in the previous session that we had was that there were two ad hoc committees last year that were put together to study this topic that we're talking about now how many I guess how many reports did those ad hoc put together in terms of the study that

we the Kaiser Martin report was originally requested as part of the

Jessie Lopez

initial process by the first committee okay so they did the same essentially the same study that we have now in front of us the study in front of you is an

updated study based on that 2020 study okay thank you and then one of the

Jessie Lopez

things that as an ad hoc we discussed that people you know the public has questions about is why isn't one of the recommendations that we don't implement this to all new development can you walk us through that director i'm sorry can you i was trying to listen to the question can you repeat that so why isn't one of the recommendations or not necessarily why it is not but what was the conversation about why you know our recommendation doesn't necessarily cover all development being built in the city the reason is that the

The necessity for covering all development would have to be evaluated based on the totality of the development in the city and be completed through financial analysis. The goal of the committee was to evaluate development and requirement based on actions that were taken by the city and not necessarily having to apply to all projects.

It was seen as somewhat of a burden to apply to all projects, but rather just to look at projects that benefits from city action that increases residential or allow for residential density to occur.

Jessie Lopez

Okay. And another question I had is if, you know, down the line within the 45, 60 days, direction comes back and the council approves this, would that cover the new entitled projects?

That is going to be a policy question for the council is to at what point and how to apply the ordinance. there are projects that are have been entitled under the current ordinance but have not pulled building permit and it would be a policy a direction if this council decided to move forward with the recommended changes is to at what point in time do you apply the fee to those project that has already been entitled past ordinances have allowed for and recognized the entitlement of a project and it was conceived at a different financial times and those projects

would be considered grandfathered into a fee structure and the proposal could then apply to project moving day forward meaning that when the ordinance is effective and that's when it would

Jessie Lopez

apply to projects okay thank you and another question that i have is i think what was it 3.7 million that we got from the ho fees last year did i hear that correctly about 3.7 million okay um and if the h o would not have been amended what would have what would have what would have

what would have been that dollar amount uh 10.1 but three three times about three times yes so how much would you say that we left out on the table six point seven point four

Jessie Lopez

Wow okay thank you another question that I have actually I don't have any more

thank you thank you councilmember any other question I know we oh I'm sorry we have councilmember Mendoza who has some questions and comments councilmember

Council member Mendoza can you hear us

she might be dialing in it looks like where she's located maybe her audio device isn't picking up very well the only thing i can do is mute her

council member mendoza

can she call back on another line or something or yes i will send her that information

all right well let's keep trying let's see if we can give her another number for her to call in on

any other questions Councilmember Hernandez yes director tie I'm sorry if you can just confirm

Johnathan Ryan Hernandez

that that last amount that you shared with Councilwoman Lopez had we not decreased the in-lue fee how much money could we have potentially generated so what we what I can

say is that the fee that were paid were at five dollars and it amounts to 3.7 under the old process that would have been fifteen dollars so um you collected one third an additional two-thirds i evaluated but 11.2 just shy of 12 million dollars in total but the collection was 3.7

Johnathan Ryan Hernandez

thank you thank you my apologies i i wasn't sure the the number what it was referring to so i just wanted some clarification. Thank you, Director Tai. I just wanted to echo the ad hoc committee recommendations on the key WHO provisions. I want to thank my colleagues that sit on that ad hoc. I just wanted to offer my support for making the skilled and trained workforce a mandatory commitment. I think that that is going to improve not only housing here in the city, but it's going to vastly improve the the whole preface behind why the skilled and trained

Johnathan Ryan Hernandez

workforce is so important because at the end of the day development is going to happen in our city we want to make sure that the development that happens is good development and that it's done by people that live and work here locally when we don't have skilled and trained workforce and local hire at the table what ends up happening is we have developers come to our city bring workers from out of town and maybe they spend 15 or 20 dollars here on a daily basis and that's lunch and a drink and then they go home and spend that money in their communities and Santa Ana doesn't see any of that so if we want to not only help our

Johnathan Ryan Hernandez

residents out by giving them access to affordable housing but we also want to make sure that we're giving a hand up to the workers that are living in our community that are spending their dollars down here so I just wanted to echo that that's something I'm supporting is considering making this provision a mandatory commitment. Furthermore, I also liked seeing the additional enhancements to the ordinance, which was a priority for the creation of new affordable housing opportunities for large families currently living in the city. We're very limited to the amount of units that we

Johnathan Ryan Hernandez

have that are upwards of three to four bedrooms, but yet we have, and it's pretty normal in the of Santa Ana for families to live in a two-bedroom house or a two-bedroom apartment with three to four families. So to accommodate that, I think that would be a big priority for us. And I just had some additional recommendations that I would like to see added to the ordinance, some additional enhancements, I think, which would strengthen the coup would be a local hire component because that increases the quality of life for our neighbors. and what value are these projects? I mean if it's built by somebody that you

Johnathan Ryan Hernandez

trust and and that you know that grew up in your community I think that that is that is extremely valuable to me and in addition to that one of our residents brought up maybe we incentivize some of these developers for having a local diversity bonus and in addition to that something that is extremely important to me is like I mentioned a skilled and trained workforce, renter protections, right to remain, right to return. I know that there's developments that happen and eventually you know from time to time there's expansion. I would hate to see something like that happen and residents not have the ability to return to their

Johnathan Ryan Hernandez

homes. So that's extremely important to me. And lastly Councilmember Becerra brought it up down payment assistance I think that that's a great idea so I would I would be interested in looking into that as well and that concludes my

comments mr. mayor thank you councilmember Hernandez I think we we may be successful with councilmember Mendoza I know she's trying to log on on another or calling on another line let madam clerk is there any response she hasn't

reconnected yet I'm still waiting for her to reconnect got it well give me a

hand signal or something when she's ready to come back to us.

Phil Bacerra

Mayor Redekopoulos, Mayor of the United States, May I just ask one clarifying question to Director Todd?

Director Todd Todd, Director of the United States, Sure, go ahead.

Phil Bacerra

Mayor Redekopoulos, So in response to one of my colleagues' questions, you said that $6 million was left on the table. So are you telling me, before you answer, are you telling me that you had commitments from developers that were ready to pay $15 a foot and that they deliberately held off because they thought $5 a foot was coming?

What I discussed was the difference between the $3.7 and the $11 million that would have been the fee, the difference between $5 and $15. I can't estimate as to who would pay that fee or not. All we do know is that who paid the fee and at what rate, which we do have a...

Phil Bacerra

I mean, and if you do the math, if we had $30 a foot, maybe we left a lot more on the table. And if it was $50 a foot, I mean, that's a lot more we left on the table. But the reality is nobody was paying that, correct?

I can only tell you what has been paid, which is at $5.

Phil Bacerra

So five years at $15 a foot, how many folks paid that?

No one paid the $15 fee.

Phil Bacerra

Zero. So to say that anybody left any money on the table, I think is not fair. I think the reality is if the fee was larger, and this is the key part, and developers were willing to pay it, then I think it's very fair to say we left money on the table. But the reason why we dropped the fee to $5 a foot was to spur construction, to spur payment of the WHO fee. So I just want to clarify because it just sounds awful to sound like we just left money on the table. We didn't leave money on the table. The money wasn't coming to the table. That's why we dropped the fee. So that's all I wanted to clarify. Thank you.

Great. Thank you, Councilmember. I know a couple of Councilmembers haven't spoken, and I want to make sure that they have a chance to speak. and we may go a second round hopefully not a third but um i think a second should be plenty but in case um mayor pro tem are you good good and we're still waiting for council member mendoza i just i just have a couple of comments and i know council member fan has some follow-up as well so look i just want to thank everybody who came to speak tonight and those who offered their comments by phone and staff who provided presentation information background and

yeah this this is you know it's funny we didn't have a housing opportunity ordinance or for lack of a better term we didn't have an affordability or an affordable housing ordinance I'm ever in the city I think the first one was I think in 2011 if I'm not mistaken and you know if the idea was what kind of community do we live in right do we need this what kind of demographic do we have what's the average median income for a resident that lives in St. Anna and I was struck by you know somebody's simple math that said you know an average person

and this is you know on a good day makes minimum wage about $15 an hour and they work 40 hours a week and they earn if we do some simple math $2,400 a month just and that's you know before taxes so for that person to afford one of the one-bedroom units that is market rate what's the I guess you know again I'm a liberal arts major so mr. tie if you can explain to me what the average monthly rent for a one-bedroom apartment market rate apartment is going for these days

based on the KMA study let me look for it here

Kathy do you happen to have that rent number handy?

I'm muted again just a second I am pulling it up

we'll take a second okay

the rent um for the rent that the average rent if you take it all across the the average ended up being about two dollars and 77 cents a square foot a month it ranged from 2420 for studio units

up to 3750 for three bedroom units got it so just i guess roughly speaking if we had somebody who was earning minimum wage here single parent and was earning 2400 a month full-time right we do Is there anything market rate that would be available to them if they wanted to have any money left over to eat, to clothe their kids, clothe themselves, feed themselves, provide medicine for themselves? Probably tough, right?

So in any event, let me just go back to that, come back to that in a little bit. But look, I want to thank everybody who's been asking really intelligent, critical questions of this because it's important. But I know there's been a lot of discussion on the summary and the study that was prepared by Kaiser Marsden last year for the two ad hoc committees that were convened.

and just as a question you know Kathy or men can you tell me how long Kaiser Marsden has been providing studies and consulting information for the city of

Santa Ana I can tell you we've been doing it since the late 1970s so since

for the past 50 years or close to 50 years close to close to it well I've been at Kaiser Marsden for 38 and I'm not gonna say you were doing it right to you in 1983. You started when you were 10 years old so I was in junior so so look I want to thank you for you know your firm's support of what we've done with respect to policy here in the city and I think you know people in the industry can disagree just like you know any professionals whether it's lawyers whether it's you know planners or anything else can disagree but I think

that your findings and your assumptions could certainly be questioned but I think in the end I think the city has trusted your rep the reputation of your firm which is why we have continued to to retain you so I just want to thank you and I I certainly thought that your direct your findings last year to a study that I didn't see showed that we were somewhere in between 14 and 15 at that point you know and and so now we're at seven between 17 and 18 and these are that just thresholds that would be able to withstand challenge and not be

considered takings so to the extent we were to go like somebody said let's do you know 30% you know in Luffy that probably wouldn't withstand a legal challenge and probably would be considered a fifth from a taking under the Fifth Amendment. So I certainly think that your approach has been reasonable. I think it's been legally sustainable. So all those things are important to me. But, you know, I do kind of want to, you know, just come back to what some others were saying. And I think that, you know, for me,

I was looking at these other cities. So if somebody can explain to me, and Kathy, you might be the right person to explain is there development happening in the city of Pasadena yes okay is there city happening in the in the or excuse me is there development happening in the city of Irvine yes okay so the city of Pasadena has a set-aside of 20% affordability and the city of Irvine has has their in lieu fee at 15%. So to say that you're going to have zero development when you have fees that are at 15% or 20%

doesn't really make sense to me. I know that I'm the only one on the council, I think, that was here in 2015. Look, I don't know what happened and why there wasn't development, but sort of what I had heard, it was there was a chilling amongst the industry saying that look just wait and don't develop don't pull permit fees go ahead and get entitled but don't pay any fees because we you know we may go ahead and reduce these fees to zero and that's what some of the development community had told me and so i don't know if that's true that's anecdotal as anecdotal is what um you know a person pays for

an affordable unit, which is about $500 or $600, and what the market rate units go for, which is close to $2,500. So to the extent that there was an artificial chilling of that, of the use of the housing opportunity ordinance, I don't know. That's an open question. But there certainly is, I think, there certainly are other communities that have been able to have development within their communities at 15 to 20 so I don't think we're off base here and Irvine and Pasadena have a much higher AMI for their demographic

Santa Ana is one of the lowest income communities definitely in the in the county but in the state so to the extent that we build and we have to ask ourselves our this baseline question that I try to ask myself who are we building for if we're going to do market rate we know it's not for the for the for the majority of Santa Ana residents there may be some that will afford it but not many so if that's our goal to build for others outside our community then I think we go to zero or I think we stay at five let's go ahead and build for others that don't reside on our community and that don't have the need so

if that's the if that's the goal then yeah I think we're right we're right where we need to be but I think what I've heard from the ad hoc committee what I heard from many residents is let's have balance I think that the what does RENA stand for I always forget regional housing needs assessment so the RENA requirements for market rate housing and moderate housing we've exceeded by leaps and bounds we've exceeded the affordability as well but we've definitely exceeded the market rate requirement that was asked of us on that.

So we've certainly done our share in that area, but I guess to me, we just haven't been building enough for the residents that have the highest need. We certainly have been building for those that have the highest income. And that's the question. Who are we building for? Those with the highest income or those with the highest need? So that's sort of guiding, that's the principle guiding my decision making here, is trying to build for the residents that have asked us. We need help. We all have been talking about a housing crisis. And those folks are not asking us to go to 50%, 60%.

They're just saying set some aside for us so we can leverage those monies. Because there are monies at the state that are available. And to the extent we have some money to be able to use to bundle them with other state and federal funds to develop more affordable housing for our community, make it a safer community, have families that will live in a dignified way, one family household to a unit as opposed to having three and four to a unit because they can't make the rent, then that's sort of the principled question that I'm trying to grapple with. And I think that the balance here is not to dissuade or to discourage development.

It's to encourage development while at the same time being respectful of the community that you're building in. It is a privilege to do business in Santa Ana. And I will say that. It is a community that welcomes you. It's a community that will do anything else to go ahead and continue to offset any issues or obstacles you may have. And I've said this to the ad hoc. let's delay or defer some of those the fees till the the certificate of occupancy issue is issued other ways we can do to go ahead and provide relief but we asked the development community why don't you join us in wanting to

build more for our community that needs it that's what I'm asking of you and I think it's a fair ask because this is a partnership and it shouldn't be the city just simply giving things away and saying zero fees and don't help our struggling families our working families families that are going to have to leave santa anna because they can't afford to live here anymore that's the ask i guess i'm making of you so with that um let me go ahead and go to a second round oh uh council member mendoza i believe is ready council member

good afternoon i'm good evening mayor and fellow council members am am i on you can hear me okay we can hear you great okay very good well i i appreciate all the hard work that the staff has done and i want to thank all the stakeholders who have pre appeared in person and over the phone and I'm sure you will agree that this is a very difficult decision it's a it's a very controversial controversial issue and we do want to as the

mayor mentioned and I agree totally that we need to have a total balance and one way to do that is to continue to encourage the developers to build affordable housing and these would be the developers who are not going to be using the skilled the trained and skilled workforce i think that that would be reasonable and increasing the fee however i do i see a an alternative plan is

is not just giving away the services and housing. I see maybe we need to have some kind of plan in action to encourage our citizens to get a, make a way, a path, a journey to better living conditions through education or some kind of training. And so what I see if our residents are able to get this, training that they are they will be able to afford living in their own apartment as opposed to three

or four families in the same apartment and i realize that many of our citizens are low income and they are working three and four jobs but what if we could help them to get the training and then just get that one job that will help them rent something that decent and dignified living um so because if if we continue to give them the fish they're not going to learn to fish and and be self-supported so we need to find some way to to have them be able to afford their own

their own housing you know i was one of those low-income residents at one time as an immigrant But I followed the educational path and the hands-on training in other ways. And my salary and earnings increased steadily over the years. And today I have a very nice home here in a beautiful part of a city in Ward. And I'm able to reach that American dream through the education. I did not rely on the city of Santa Ana to give me low income housing and the same goes for my brothers and sisters.

We did it that way. And I know that many of our residents are a little older and probably do not have the ways.

Council member can you hear me?

I think we may have...Council member Mendoza?

Look I think the signal may have gotten frozen. The good thing is that you froze and you had a really nice looking freeze. Sometimes when we freeze we get this awkward look. You froze at the perfect moment. you look great so let me let me bring it back i know council member fan so uh madam clerk if she if we're able to get the council member back council member mendoza just go ahead and call on me so we can interrupt um go uh go right after council member fan

we lost her she looks like she's gonna have to reconnect oh there she is oh there you are am i

back yes you're back oh i i apologize i would have been

have some issues going and i couldn't be there mendoza can you just turn off your

video to see if maybe you can have a better response

hello everyone good evening how are you doing better better better all right thank you i apologize for that um normally my internet is works just fine here from home so i was uh as i was mentioning that um myself and my family we were able to buy our homes we all own a home and we were at that time when we were going through our early years there was no such programs as housing assistance or or and I don't think we ever had any who ordinance that helped us to purchase a home

and so I want to encourage our residents to to continue to work hard for their family as they have been but also to find a way to get better jobs through better training and education and we have those resources, especially now with the CARES money. We could provide some kind of training so that in the future, instead of $10 an hour, you're making $20, $30 an hour. And with that, I think our residents would be able to afford a place where they can live

in a dignified manner with their families and not living on three or four families in a single family home. So my recommendation would be to maybe continue this and have a further analysis, kind of like a second opinion, if you have a condition that you're not quite sure of the diagnosis, that we have a second analysis from a different source and let's see how we can,

if there's a way where we can keep it at a rate that is reasonable for the developers and to encourage them to build but at the same time what would it look like if we were to to increase the fee for those developers who chose who choose not to use the trained and skilled workforce but i'm i'm um i want to point out and emphasized that the lowering of the fee, $5, actually brought in more building, new construction so that the residents can have more housing. If we had not done that,

supposedly 7.4 million that we missed out on that the city would have obtained, actually that's that's not that that was not going to happen because developers would not have built so we are very fortunate that the developers came in and started building when that that fee was reduced to five dollars so i would like to entertain that we we we continue this and have a better detailed and analysis on on this because it seems like there's

there's some areas where it's a little gray and so I'd like to see a black and white and so I recommend a continuation thank you councilmember and we're just

since this is a study session we're just giving direction and guidance and comments to staff but your points are well received let me go to mayor pro temp and yalosa and then to councilmember fan Thank You mayor Sarmiento

David Penaloza

So I just wanted to repeat what I said at the last two meetings that I didn't want to repeat what I had said, you know, just under a year ago. I'm not supportive of any of the ad hoc recommendations. I think they're definitely unnecessary at this time. The only one that I am looking to consider is looking at ways where we can consider making the skilled and trained workforce segment at some kind of or a level of mandatory commitment when it's moving down this path. But any of the others, I mean, just looking at the different provisions, in my opinion, not necessary.

David Penaloza

There's, you know, we definitely believe, at least me personally, that there should be a diverse housing stock in this city. That's always been my commitment from day one is that we must have a diverse housing stock in this city, which was why, you know, we have a $5, you know, housing opportunity ordinance, $5 fee. That ensures that we not only spur development like we did last year over five years without seeing any building permits pulled, reducing it to five, voila, we had a bunch of building permits pulled, and now we have money and funds that we could use to provide rental assistance and affordable,

David Penaloza

or money into affordable housing projects. That was a whole goal. My position still stays the same and that is all I have to say, Mr. Mayor.

Great. Thank you, Mayor Pro Tem. Council Member Phan and then Council Member Hernandez.

Thai Viet Phan

Thank you, Mayor. So I just wanted some clarification, Director Tai. So when we did some red lines to the WHO, if I'm not mistaken, the last edits included provisions to allow WHO dollars to go to the purchase and rehabilitation of the WHO. housing units correct that still is a policy that's what i thought it i think the way that section 41-1909 a1 was reorganized maybe changed a little bit but the provisions for you know down payment assistance and whatnot is still there the provision to protect against eviction

Thai Viet Phan

and provide legal housing assistance is still there the provisions for code enforcement are still there. So I'm glad that that stayed. The other, you know, thing I wanted to, a few things I wanted to touch on is I think several of us up here have mentioned that we are interested in looking at, and I would like to see the team look at a kind of a step system when we decide to add on a skilled and trained workforce. You know we as Kathy mentioned it is a cost right just like the WHO fees however a lot of these also include fewer

Thai Viet Phan

accidents on time making things stay on schedule which is what you hope for but there's always contingencies and you know we have evidence to show that these types of skilled and trained workforce ensures that projects save money in the long run. So I would like to see that. What that would look like at the $15, you know, or even going down to my next comment, is that while we do say, okay, $15 a square foot, no one was paying it. But you know what people were paying? Developers were paying $9.35 an hour

Thai Viet Phan

for Skyline Towers, $9.35 an hour for the market, South Coast Metro, $9.35, sorry, not an hour per square feet at city a place 935 per square feet harbor ventures 1080 at the 301 prisma apartments and i can go on so while the 15 an hour as some say may be too high well we have evidence that at least at nine or ten dollars per square foot is feasible and i do want to ask you know those in our development community to help me understand, and please apologies for my ignorance, which

Thai Viet Phan

is how do you go forward with obtaining financing knowing that the who fees are at $15 an hour, go through the entire application process and then say well it's too much we can't build. So I'm just really curious how that works because typically, again please apologies for my ignorance. If you decide to go and build something, you say I have a certain budget and this is the expectation and you go and build it. Maybe they intended to sell the land, maybe they intended to sell the entitlements, I don't know. But I would love to get an answer to that because

Thai Viet Phan

at least two developments who waited to pull building permits after the 2020 who amendments got their applications in and completed them prior to the 2020 amendments. The other question or I guess maybe not a question, is when we're looking at the rental prices, and it's incredibly upsetting in the report because they're so high. Being a renter in our city is less affordable than being a homeowner. Many homeowners in our city bought homes many years ago. I'm going to

Thai Viet Phan

use my house as an example. I bought a townhouse in 2019. We closed May 2019. We paid $467,000 for a little bit under 1,200 square feet, three-bedroom, two-bath townhouse. In 2008, that home sold for $205,000. So in about 12 years, the value of that home doubled. and I pay $2,400 a month for our mortgage. 2440. And when you look at the numbers for the average monthly rent for a studio unit, market rate in Orange County

Thai Viet Phan

or the pro forma analysis is $2,400 for a studio. It's incredibly expensive to be a renter in our city. So I can't imagine having a family not being able to afford a down payment and having to pay for the two bedroom units or the three bedroom units here. So I think it's really important that we keep that in mind as we are looking to use these who funds and why we're looking to adjust it. Because the rental market is there. They are being built, they are being rented out, and folks are still making a profit. There's nothing wrong with that. I want to encourage that, but I also want to make sure that

Thai Viet Phan

as we pursue development in our city, we also make sure that we address the need. A $2,400 studio unit in our city is not affordable for the vast majority of our residents and definitely not affordable for people like my mom. So I definitely want to see us address that. That is why we looked at addressing the WHO numbers. The other thing I want to address, and Director Tai maybe can help clarify for me, is that the 2015 WHO had a trigger. right was it that so it's the same trigger that we have or we're looking to

amend back to today correct you're looking at instituting and reverting back to similar triggers as the former who prior to 2020 okay and so you know

Thai Viet Phan

I guess I look at that and say well it's applying to everybody you're you're on the same playing field if you're in this city. And if you want to go with ballot box zoning or ballot box planning and building, feel free. Costa Mesa is doing that right now. And us up here, we're trying to find a way to not only encourage building, but also encourage a variety of buildings. And so looking at the who, looking at the lockstep or the various steps for skilled and train many of whom live locally to be able to afford the units that they are building is crucial

Thai Viet Phan

those dollars are going back into the community they're not going anywhere else and i think that as we look at housing development in the city we have to really look at who are we serving because i look at these numbers and i can barely fathom myself paying for them and i know i've been very fortunate during this pandemic and in my career and so with that i hope staff will go look at some of those issues and i look forward to further discussion thank you great thank you council

Johnathan Ryan Hernandez

member fan council member hernandez director um ty if you can kindly just tell me what the median rent price is here in the city of santa anna so based on the rent survey

the average price for a one-bedroom is about 2,700 for a two-bedroom is about 3,300 and for three-bedroom it's about 3,700 and that's in Santa Ana that's based on the surveys is for Santa Ana

Johnathan Ryan Hernandez

Okay. For the United States Census Bureau, resident, and this is 2019's information, the average income of residents in the city of Santa Ana is $20,867. That's $1,738 a month.

Johnathan Ryan Hernandez

how do we expect residents to live in this community when,

Johnathan Ryan Hernandez

I mean, the numbers speak for themselves. And the reason why I brought this forth for the public and for my colleagues is to shine a light that we are very fortunate as policy makers to be in a position where we can either help community or harm them. and I'm going to share my story because it's part of why I'm up here at the dais now as a council member. But I became a parent in 2010, and I had just graduated high school. Not the most ideal situation to be in as an 18-year-old young man, but it was my reality, and I own it.

Johnathan Ryan Hernandez

But I rented my first apartment, 333 South Flower Street, apartment 18, right in front of Santa Ana High School. And I was paying $9.75 at that point. By 2012, I moved to 326 South Garden Street, apartment 207, and was paying $11.50 for a two-bedroom. And note, I'm a single father. And fast forward to 2016, the cost of living at that point had then increased to $18.50 for me. And that is all within having a daughter from birth to being seven years of age.

Johnathan Ryan Hernandez

I'm fortunate that throughout that time I was a union member and had union wages and was able to move up and make a much better living and I'm now a homeowner. But that's not the reality for everybody. And as an elected official, I also have to shine a light that part of why development did happen is it's because of the political power that came with that. the ability to change the in luffy from 15 to 5 is what is what obviously was the catalyst for the development to happen but if we have policy makers here that are willing to stand and and put people

Johnathan Ryan Hernandez

over profit and meet the residents where they're at these developers will build and any developer that doesn't want to build to meet the needs of a residents well thank you you did us the favor we We don't want you in our city anyway. Because in this city, housing is not accessible to everybody. And it's the reason why from today to Saturday morning, there was eight violent crimes or robberies or assaults that occurred that we received as electeds in our emails. if we want to get in front of public safety if we want to get in front of the housing crisis

Johnathan Ryan Hernandez

if we want to be proactive when it comes to being responsive to the home to the houseless issue housing is fundamentally a key factor in in people's mental health this is an intersectional policy policy discussion it's not just solely about us not being friendly to developers but But as a city, we have to meet the needs of our residents. And people with housing problems are at a greater risk of mental health problems than people that are not. And I can assure you that the people that went out and made those mistakes over this weekend probably came from households that weren't very sustainable or weren't very solid.

Johnathan Ryan Hernandez

So good quality, affordable and safe housing is a vital component in good mental health. and as well as supporting those with existing mental health conditions. So if we care about public safety, if we care about having clean parks, if we care about having nice community centers, and if we care about having healthy neighbors, this is a step in the right direction. Because it is when you are intersectional and understand all of the benefits that come with having sustainable, thriving community and a strong workforce with protections for the workers and residents,

Johnathan Ryan Hernandez

only then can we be proactive in making sure that this city is a safe and vibrant city. That concludes my comments, Ms. Breyer.

Thank you, Council Member. I believe Council Member Lopez.

Jessie Lopez

Yeah, I do. You know, Council Member Fan just brought up a point and it made me think about a question. So although people were not paying $15, they were paying a fee, correct?

The projects that paid over the last year was at $5 a fee.

Jessie Lopez

Okay. And how many developers contributed to the $3.7 million?

That was two projects.

Jessie Lopez

Two projects?

Correct.

Jessie Lopez

Okay. Thank you for that. So, you know, there was a community member that came and said in Spanish, in Santana se puede vivir mejor. And for me, that is the goal, always and in all ways. And housing is one of those ways. My job as a council member is not to make people's lives harder, especially War III families' lives harder. And so, you know, part of being on the housing ad hoc and looking at the HOO, that's really where I was coming from. And so, I care about the fight for stable housing here.

Jessie Lopez

And we've heard enough to know that people are rent burdened, to know that people, when they look at their own budgets, more than 30% they're spending on their rent. And so they're not able to invest back in our local economy. And they're not able to save. And so when we talk about people pulling themselves up by the bootstrap, it's not like houses cost $100,000 or $200,000 like they used to. You know, the sky of housing is, it's gone so high that people in my ward, when they talk to me, they say, I want to help my kids buy a home, but I can't afford to. Because the housing is not the same, the cost.

Jessie Lopez

And so for me, you know, when I look at this big picture, we have a housing crisis. And that's my job, to help find a solution to the problem that we face today. and so you know we have the ability to tailor the ho and help us meet the need that currently exists here in the city and what we are trying to do is add supply at the level that people need it and that's the bullseye for me in solving this problem and so i'm very supportive of course of the recommendations that the ad hoc made i'm also supportive of the local hire making sure that we

Jessie Lopez

implement the skilled and trained workforce happy that councilmember found you know uplifted the language of protecting of making sure that we have renter protections and the ordinance and so those are going to be my comments

thank you thank you councilmember I think we've heard from everybody twice almost or those that wanted to speak twice so maybe we could start wrapping it up I think councilmember Lopez I think councilmember Becerra and mayor pro tem I think all spoke eloquently about where everybody is and I just want to say look I respect everybody's opinion up here whether they're consistent with mine or not I think that the whole idea of a discussion like this is to be able to reflect on different ways to solve a problem right we all have we come from different experiences and different paradigms and maybe have

different theories on how these problems should be addressed so I don't denigrate anybody's opinion no matter how diametrically opposed it could be to mine if anything I think we get to a better solution that way and I want to thank Councilmember Becerra who I know last year when we were having this conversation made it made a very very salient point that rang really profoundly with me was you know where are these affordable units going you know it was a question that I hadn't asked right are these affordable units that are being built, are they going to Santa Ana residents? And I thought that that was a threshold question,

because if we were building these affordable units for other people in the community, then again, back to somebody's point, we're not doing our job to be responsive to the residents here in Santa Ana. So I want to thank staff because I know they generated some data points for us, and I know a couple of developments. The Andalusia project, 70 unit affordable project, 63 of 70 units went to Santa Ana residents. That's 90%. The Depot at Santiago, 58 of 69 units were leased to Santa Ana residents. That's 84%.

The First Street Apartments, a 68 unit affordable housing project went to 100% Santa Ana residents. and La Placita Cinco 100% went to Santa Ana residents but to me again if that wasn't the case then what are we doing right then we're building affordable units for others and not really addressing the questions and the demands that residents made at least you know that I heard that rang true to me and so you know I want to thank staff I want to thank the council member because that was a very threshold question just like I see that you know one of the questions

I think that kind of went unanswered here was how many of the market rate housing units that we built? The hundreds and maybe over a thousand units went to Santa Ana residents. That would be a very interesting and compelling number to find out. Because I would gamble, and I'm not a real gambling person, but I would gamble that probably not 100%, probably not 90 or 80, but probably a very, very low number. So to the extent that, you know, at the very least these affordable developments and these affordable units that are being created, I think are going to Santa Ana residents.

If we can tighten that up, and I've had that conversation with our city attorney, we obviously can't violate federal housing policy and make them exclusive to Santa Ana residents. But we can get very close by building in preferences, by building in criteria. And if you look at the city of Santa Barbara and Santa Monica, they've done an excellent job in making sure that whatever they build using leveraged monies from the state and federal government go as close to serving almost all their local community residents. So in any event, I just wanted to say I'm very thankful for the discussion.

I'm thankful for the comments and support the ad hoc's recommendations with a lot of the comments that were made today to augment that and having to do with our friends in labor. So I'm not sure if staff needs any additional direction, but I think hopefully you heard loud and clear.

No, sir, Mayor. I believe we've received enough tonight. And thank you for all of your time. and we will return back with you with what incorporating what we heard tonight great

thank you everybody um i think our next regularly scheduled meeting is for august 17th 2021 and so we will adjourn tonight's special meeting to that date thank you