REQUEST FOR CITY COUNCIL / HOUSING AUTHORITY ACTION
SUBMITTED TO: Honorable Mayor and City Council Members / Honorable Chair and Board Members
SUBMITTED BY: Eric G. Parra, Interim City Manager
VIA: Jennifer Villasenor, Acting Director of Community Development
PREPARED BY: Charles Kovac, Housing Manager
Subject:
title
Approve and authorize the execution of an Affordable Housing Agreement between the City of Huntington Beach and TPG AG EHC III (LSEA) CA 3, L.P. for a residential development consisting of 13 new affordable townhomes located at 7225 Edinger Avenue
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Statement of Issue:
It is recommended that the City Council approve an Affordable Housing Agreement (“Agreement”) between the City of Huntington Beach (“City”) and TPG AG EHC III (LSEA) CA 3, L.P., in conjunction with Landsea Homes of California LLC (together referred to as the “Developer”), to facilitate the development of a 5.6-acre site located at 7225 Edinger Avenue (“Project”). The Project consists of 129 ownership townhome units, with this Agreement stipulating that thirteen (13) units will be reserved for moderate-income households for a period of 45 years.
Financial Impact:
Not applicable.
Recommended Action:
recommendation
A) Approve the Affordable Housing Agreement between the City of Huntington Beach and TPG AG EHC III (LSEA) CA 3, L.P. for the development of 13 affordable units at 7225 Edinger Avenue; and,
B) Authorize the City Manager or their designee to implement and execute the Affordable Housing Agreement for the Project, including all necessary related documents; and,
C) Authorize the Housing Authority Executive Director or their designee to execute all necessary implementing agreements and related documents.
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Alternative Action(s):
Do not approve the recommended action and direct staff accordingly.
Analysis:
Background
On March 28, 2023, the Developer obtained approval from the Planning Commission for Tentative Tract Map No. 19174 and Conditional Use Permit (CUP) No. 22-021 for the construction of a 129-unit townhome project at 7225 Edinger Avenue (Attachment 1). The 5.6-acre Project site is located on the north side of Edinger Avenue, one parcel west of Gothard Street, adjacent to Golden West College. Presently, the site consists of a commercial center and is located within the Beach and Edinger Corridors Specific Plan (BECSP). The proposed layout is comprised of 16 three-story residential buildings arranged predominantly linearly across the property. The Project features 10 floor plans ranging from approximately 1,100 to 2,500 square feet and units with 2 to 4 bedrooms and a 2-car garage.
Project Status
The project is currently undergoing plan check for grading. The Developer has applied for permits to demolish the existing buildings, which are being reviewed by the City.
Affordable Housing
The Project falls under the City’s Inclusionary Housing Ordinance (“Ordinance”) as outlined in the Huntington Beach Zoning and Subdivision Ordinance (HBZSO) Chapter 230.26. This mandates that ten percent of new housing within the Project must be affordable to households earning no more than 120 percent (moderate income) of the Orange County median income. Complying with the HBZSO, the Developer agrees that, out of the 129 ownership units permitted under the City’s development standards, thirteen (13) units will be designated for moderate-income households.
Moreover, under California Government Code Section 65915 (the “State Density Bonus Law”), implemented under HBZSO Chapter 230.14, developers incorporating specified levels of affordable housing in their projects are entitled to certain density bonuses, incentives, or concessions. While the Developer did not seek an increase in the Project density, they are entitled to one concession and a reduction in parking standards as part of the project approvals.
A concession, as defined, encompasses a reduction in site development standards or zoning code modifications, among others. In this instance, the Developer proposed and was approved for a concession reducing the space between buildings from 20 feet to a minimum of 14 feet, 9 inches having demonstrated that adhering to the 20-foot requirement would result in the loss of 11 units and an increase of $30,000 per unit in construction costs.
Additionally, the Developer is eligible to provide parking according to the parking ratios allowed under the State Density Bonus Law. Pursuant to the State Density Bonus Law parking standards, the project must provide a minimum of 277 parking spaces based on the mix of two, three, and four-bedroom units. The project provides 314 parking spaces total, which includes a two-car garage for each unit. While the project parking exceeds the State prescribed parking standards, it does not meet the overall parking requirement of the BECSP. Nevertheless, the Planning Commission approved this parking reduction in conjunction with the associated project entitlements.
To obtain the described concession and parking standard reduction, the Developer must ensure that no less than 10 percent or thirteen (13) of the total 129 units remain affordable to moderate-income households for 45 years. The proposed Agreement memorializes this requirement, with covenants implementing the Agreement recorded on the individual property titles to ensure 13 units are owned and occupied by moderate-income households, as defined in Health and Safety Code Section 50093, for the specified period. The Developer will construct the Project in multiple phases and sell individual units to eligible homebuyers as verified by City staff. Maximum moderate-income sales prices for the 13 units will be set per the Agreement.
The Huntington Beach Housing Authority (Housing Authority), established in 2011 by the City Council, oversees and monitors the City’s affordable housing inventory. Consequently, the proposed Agreement includes certain underlying documents (e.g., Declaration of Conditions, Covenants, and Restrictions) to which the Housing Authority will be party. Therefore, the Housing Authority Board is requested to authorize the Executive Director to execute all necessary implementing documents. The proposed Agreement, prepared by the City Attorney’s Office, is included as Attachment 2. Upon approval by the City Council and Housing Authority, the proposed Agreement and related recordable documents will be executed and deposited into an escrow account for closing on the property acquisition by the Developer in mid-June 2024.
Environmental Status:
At the time of project approval, the Planning Commission determined that the Project conforms to the BECSP, including the Program Environmental Impact Report 08-008 (“Program EIR”), which was certified by the City in connection with its adoption of the BECSP. The Program EIR analyzed the potential environmental impacts of all anticipated development activity in the Specific Plan area including the proposed Project. The proposed Project will comply with all mitigation measures required by the Program EIR.
Strategic Plan Goal:
Economic Development & Housing
Attachment(s):
1. March 28, 2023 Planning Commission Staff Report and Minutes
2. Affordable Housing Agreement by and between the City of Huntington Beach and TPG AG EHC III (LSEA) CA 3, L.P.
3. June 4, 2024 City Council Meeting PowerPoint Presentation