Costa Mesa council advances housing-element rezoning, approves major loans for senior affordable housing

Costa Mesa’s City Council on March 17 moved forward a package of housing measures that includes rezoning designated housing-element sites and new council-backed loans to help complete two deeply affordable apartment projects. The council adopted amendments to permit a Mixed-Use Overlay District on housing-element sites — a zoning tool that requires new development on those sites to be at least 50% residential and meet minimum density standards — and approved city loan commitments to close financing gaps for two affordable developments.

The rezoning is being advanced under a streamlined state pathway (SB 131) designed to speed housing-element implementation. Planning staff said the Mixed-Use Overlay will apply only to sites previously included in the city’s adopted housing-element inventory and that rezoning will rely on objective standards such as minimum densities (about 20 units per acre as a baseline and higher maximums depending on the site). Senior planners told the council the action helps align zoning with the city’s adopted housing element and the state’s certification timetable.

The council also approved additional council-backed financing for two projects. Jamboree Housing Corporation’s Costa Mesa Senior Project — a proposed 100% affordable development on city-owned land adjacent to city facilities — received a long‑term loan commitment with a 3% interest structure and repayment terms to be documented in the funding agreement. American Family Housing’s Avon River Apartments, an affordable family project already under construction at 1400 Bristol, received an additional loan to cover unexpected construction-related costs. Council directed staff to structure the loans so any new outside grant dollars received before project close will supplant city funds so the city can be repaid first.

City staff said the financial commitments are intended to preserve the projects’ competitiveness for Low-Income Housing Tax Credits and other government funding. Investors and affordable-housing developers told the council additional local subsidies are often critical to fill gaps that arise during final underwriting and construction. In debate, council members emphasized the long lead times and complexity of 100% affordable projects and framed the loans as tools to protect completed financing packages so projects can move from entitlement and design into construction and operation.

The council approved the rezoning package and the loan structure with an instruction that staff document repayment triggers in the loan agreements, including priority repayment if additional grants or county funds are awarded prior to project close. Next steps include final loan documents, continued outreach and the ongoing housing-element work to ensure the city retains adequate capacity to meet regional housing needs.