REQUEST FOR CITY COUNCIL / HOUSING AUTHORITY ACTION
SUBMITTED TO: Honorable Mayor and City Council Members / Honorable Chair and Board Members
SUBMITTED BY: Travis Hopkins, City Manager
VIA: Jennifer Villasenor, Director of Community Development
PREPARED BY: Charles Kovac, Housing Manager
Subject:
title
Approve and authorize execution of the First Amendment to the Affordable Housing Agreement between the City of Huntington Beach and Nash-Holland 18750 Delaware Investors, LLC
body
Statement of Issue:
The City Council is asked to consider approval of a First Amendment (“Amendment”) to the existing Affordable Housing Agreement (“Agreement”) for a housing development located at 18750 Delaware Street (“Project”). This amendment, requested by the developer (Nash-Holland 18750 Delaware Investors, LLC), would revise the mix of bedroom types among the seventy (70) affordable units, without changing the total number of affordable units.
The Agreement, approved in November 2022, includes 346 total rental units on a 4.09-acre site. Per the City’s Inclusionary Housing Ordinance and the Beach and Edinger Corridors Specific Plan (BECSP), 20% (70 units) must be reserved for lower-income households earning no more than 60% of the Area Median Income (AMI), for a period of 55 years.
The proposed Amendment updates the distribution of bedrooms across those 70 affordable units to ensure it is proportional to the market-rate unit mix, as required by City code. No other aspects of the Project would change.
Financial Impact:
None.
Recommended Action:
recommendation
A) Approve the First Amendment to Affordable Housing Agreement by and between the City and Nash-Holland 18750 Delaware Investors, LLC; and,
B) Authorize the City Manager or their designee to execute the First Amendment to Affordable Housing Agreement for the Project and any related documents; and,
C) Authorize the Housing Authority Executive Director or their designee to execute all related affordable housing compliance documents.
end
Alternative Action(s):
Do not approve the First Amendment and direct staff accordingly.
Analysis:
Background
On November 1, 2022, the City Council approved an Affordable Housing Agreement for the previously approved development of 346 apartments at 18750 Delaware Street, located near the intersection of Delaware Street and Main Street. The 4.09-acre project includes a mix of market-rate and affordable rental units.
In accordance with the City’s Inclusionary Housing Ordinance and the BECSP, 70 units (20%) must be reserved for lower-income households earning 60% AMI or below. These affordable units are restricted for a minimum of 55 years.
Proposed First Amendment
The original Agreement outlined the number of affordable units by bedroom type:
• 12 studios
• 32 one-bedrooms
• 19 two-bedrooms
• 7 three-bedrooms
However, it was later discovered that several two-bedroom loft units were incorrectly classified as three-bedroom units, which resulted in an overstatement of three-bedroom affordable units.
Per Zoning and Subdivision Ordinance Section 230.26D.3.c., the bedroom mix of affordable units must match the mix of market-rate units. To comply, the developer is proposing to revise the bedroom distribution as follows:
Unit Type Original Mix Proposed Mix
Studios 12 12
One-bedroom 32 32
Two-bedroom 19 23
Three-bedroom 7 3
This change ensures the bedroom mix of affordable units is proportionally aligned with the rest of the development. The total number of affordable units remains at 70.
This Amendment also updates related compliance documents, including a Declaration of Covenants and Restrictions, which must be recorded to enforce the 55-year affordability term. Because the Housing Authority oversees affordable housing compliance, the amendment must be approved by both the City Council and the Housing Authority Board.
The proposed Amendment and supporting documents were prepared in coordination with the City Attorney’s Office and are included as Attachment 1.
Environmental Status:
This action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly.
Strategic Plan Goal:
Non Applicable - Administrative Item
For details, visit www.huntingtonbeachca.gov/strategicplan
Attachment(s):
1. First Amendment to Affordable Housing Agreement by and between the City of Huntington Beach and Nash-Holland 18750 Delaware Investors, LLC
2. PowerPoint Presentation