El Segundo planning commission reviews affordable housing strategic plan and funding options

El Segundo Planning Commission members on Jan. 23 received an update and study-session briefing on the city’s Affordable Housing Strategic Plan and options for using a $5.3 million developer in‑lieu payment, consultants with RSG and city staff said.

The presentation, led by Jim Simon, principal with RSG, summarized funding options, state programs and legal constraints and flagged that the single local trust balance would not by itself satisfy many competitive grant programs. “You have $5,300,000 held in a trust for future housing activities,” Simon said, adding that the city lacks an ongoing revenue stream that many state matching programs require.

Why it matters: the plan is intended to guide how El Segundo spends existing developer funds, seeks new revenue sources and structures programs to produce affordable units. Commissioners discussed tenant‑preference (sometimes called “live‑work”) policies, potential legal risk under the federal Fair Housing Act, and administrative burdens of running ongoing preference lists.

Funding and program options

RSG walked commissioners through HCD and regional programs that could be combined with the city’s funds. Simon noted the city could apply for a variety of programs but that many are competitive and favor jurisdictions with larger, ongoing local revenue sources.

- Permanent Local Housing Allocation (PLHA): generated from a $75 recording fee countywide; Simon said El Segundo’s recent share would have been roughly $35,000, making PLHA a limited option on its own.

- SCAG’s Regional Early Action Planning (REAP 2.0): described as a potentially more substantial source for projects that reduce vehicle miles traveled, focus on infill or advance fair housing; RSG recommended evaluating future NOFAs from SCAG.

- HCD Local Housing Trust Fund (LHTF) program: RSG emphasized this is a matching program that typically requires an ongoing local revenue stream (for example a commercial linkage or inclusionary in‑lieu fee) in addition to existing trust funds to be competitive.

- Other sources discussed: CalHome, tax credits and brownfields funding (Department of Toxic Substances Control) for site remediation. RSG cautioned the city that most projects today need multiple funding sources to reach financial feasibility and that $5.3 million alone would likely fund at best one subsidized project when leveraged with state and federal sources.

D.R. Horton payment and prior agreements

Staff reminded commissioners the in‑lieu payment originated from a prior development agreement with D.R. Horton; that payment sits in a dedicated fund for affordable housing. City staff also noted an earlier engagement with the nonprofit Many Mansions was superseded by changes to state surplus‑land law and the city later hired RSG to help implement the strategic plan.

Tenant‑preference / live‑work policy questions

RSG presented a review of comparable local policies and identified three design choices that shape a local preference: eligibility (who qualifies), property applicability (which projects or units it would affect), and unit proportion (what share of units receive the preference).

Consultant Jillian Glickman (senior analyst, RSG) said jurisdictions vary widely. Some apply preferences only at initial lease‑up of city‑assisted affordable housing, others set a minimum project size (for example five or more units) or a required affordability term (commonly 55 years for covenants). RSG recommended limiting preferences to initial lease‑up to reduce ongoing administrative complexity.

Legal and equity constraints

RSG warned that local preference policies can create a disparate impact under the Fair Housing Act if they disproportionately harm protected groups. The consultants showed displacement‑risk analyses (Urban Displacement Project maps) indicating El Segundo currently ranks as low risk for renter displacement relative to many parts of Los Angeles County, though commissioners questioned how that finding squares with local rent pressures.

Options and tradeoffs discussed by commissioners and staff included:

- A modest set‑aside. RSG suggested an initial benchmark “probably” no higher than 15% of restricted units for a local preference set‑aside, noting New York City had reduced a larger set‑aside after litigation and settlement.

- Eligibility rules that could prioritize residents, employees or a combination (for example, people who live or work in El Segundo); commissioners raised interest in tiering preferences for city employees, teachers and first responders but were reminded income and Fair Housing tests still apply.

- Administrative burden. Commissioners and RSG discussed the cost of maintaining a perpetual interest list versus restricting preference to initial lease‑up; RSG advised that for a city with a limited pipeline of new affordable projects, imposing heavy ongoing administration on city staff may not be efficient and recommended options such as embedding marketing and list management in project‑specific development agreements.

Public comment and local concerns

Resident John Pickhaver, representing civic group SeaChange, told the commission he rents in El Segundo and said searching listings showed the next nearest similar unit was roughly $700 a month higher than his current rent. Pickhaver also urged commissioners to reexamine public‑survey results showing community interest in housing east of Pacific Coast Highway, a location he said was omitted from some staff materials.

Next steps and other business

Commissioners agreed to “receive and file” the strategic plan update during the meeting; staff will continue implementing the plan’s priorities, pursue grant opportunities and coordinate the city’s participation in any regional housing trust effort. Michael (Community Development Director) told the commission the consultant selection for the city’s land‑use element update is scheduled for City Council action in the second meeting of February, which will be the next major forum to consider where additional housing capacity could be allowed.

The commission also approved the consent calendar (meeting minutes) by voice vote. Planning Commission Chair Jay Hechsler announced he will step down from the commission after a move out of the area; staff presented a brief commemorative resolution honoring his service.

Meeting outcome

The commission considered the strategic plan update received and filed on Jan. 23. The presentation will feed into future implementation actions, grant applications and the upcoming land‑use element update that may revisit where new housing can be added in El Segundo.