Costa Mesa staff says 2024 housing element progress largely on track; rezoning program, inclusionary ordinance highlighted

Pye Vaughn, principal planner in the Economic Development Services Department, told the Costa Mesa Planning Commission on April 14 that the city submitted its 2024 Housing Element Annual Progress Report (APR) to the California Department of Housing and Community Development (HCD) after the City Council approved the document on March 18.

The APR covers the planning period October 2021–October 2029 and documents the city’s progress toward meeting its Regional Housing Needs Allocation (RHNA). Vaughn said the city was allocated 11,716 units and is committed to implementing 47 housing programs and rezoning or providing capacity on 97 housing opportunity sites.

The report shows building activity and pipeline projects. Vaughn said the city completed construction of 284 housing units in 2024, and that the Luxe apartment project completed construction in 2024 with 209 units, 20 of which are restricted to moderate-income households. Staff reported issuing 23 residential building permits in the reporting window and receiving eight applications for multi-unit projects that, if built, would add about 272 units to the city’s housing stock. Vaughn said the city is tracking about 1,301 units in the development pipeline.

Why it matters: the APR is the city’s annual compliance report to HCD and helps determine eligibility for state housing grants and programs. The report lays out which housing-element programs the city has started or completed and signals where future capacity for growth will come from.

Vaughn described several program-level items the commission asked about. The city adopted an Affordable Housing Inclusionary Ordinance in August 2024 that applies to rental and mixed-use projects of 15 units or more; affordability set-asides vary by project density. Vaughn said the ordinance’s implementation phase will include tracking and managing in-lieu fees, administering affordability covenants and enforcing low-income rental requirements. He told the commission the city confirmed that Casa Bella Apartments renewed its HCD agreement and that 144 units at that property remain subject to affordability controls, including 74 very-low-income units.

Accessory dwelling units (ADUs) were a recurring topic. Vaughn said most of the city’s affordable units during the reporting year were ADUs and Project Home Key motel conversions. To improve future affordability reporting the planning division surveyed recent ADU permit applicants and plans to provide an affordability questionnaire with each ADU building-permit application going forward; Vaughn said responses to the initial survey were limited. He described an ADU preapproved-design program (seven designs under review) and an ADU legalization program for units built before Jan. 1, 2020.

On rezoning, Vaughn said the city retained a consulting firm to assist with the rezoning program, which is scheduled to begin spring 2025 and will implement roughly 18 of the housing-element programs by increasing allowable densities and streamlining permitting in designated areas. He said the consultant has California experience, including work in San Diego and an HCD staffer on the team, and that the firm will help prepare technical materials that include objective design standards and code updates. Commissioners asked for clarity on the consultant’s role; Vaughn and staff said measure case sites and broad land-use decisions already are defined by the housing element and that the consultant will follow that guidance while helping formulate design standards and community engagement materials.

Commissioners pressed for further detail on affordability targets and project types. Commissioner Martinez asked staff to confirm the inclusionary percentages; staff replied that rental projects at densities of 60 dwelling units per acre or more must provide 10 percent low-income and 5 percent very-low-income units, while projects at less than 60 units per acre must provide 6 percent low-income and 4 percent very-low-income units. Commissioner Andrade asked staff to break pipeline projects into rental versus ownership in future reports and to include income-level ranges or household-income equivalents for the very-low/low/moderate categories to improve transparency.

Fairview Developmental Center specific plan: Vaughn said staff continued community engagement and coordination with state agencies in 2024 and is working through a financial-feasibility analysis with state partners; staff anticipates a study session with the commission next month to review land-use concepts and a preferred plan. Vaughn emphasized the financial feasibility analysis as the remaining major piece before a full study-session presentation.

Public comment: a phone caller during the general public-comment period criticized high-density development and questioned state RHNA mandates. The caller expressed opposition to current development strategies; commissioners and staff recorded the comment but did not change staff recommendations.

What’s next: staff will continue to monitor pipeline projects, implement the inclusionary ordinance and begin the rezoning program in spring 2025. The APR form and presentation materials are posted on the city’s APR landing page, and staff said the housing-element APR will be attached to the General Plan APR to be presented to City Council.

"We are committed to implementing 47 housing programs and rezoning or providing housing capacity on 97 housing opportunity sites," Vaughn said during the presentation.

Commissioner responses emphasized continued public engagement and more granular reporting in future APRs; commissioners also suggested study sessions and neighborhood-focused outreach for major initiatives such as the Fairview plan and the rezoning effort.

Ending: staff did not request formal commission action on the APR at the April 14 meeting; the commission used the session for questions and feedback ahead of Council review and the rezoning work planned in 2025.