Affordable Housing Can Be Expensive - Part 3

We’ve been looking at the ways in which the City increases the number of affordable homes in the City, in conformance with State guidelines. Click here for the previous story. Using the recent Brookfield and Trumark Homes as the example, along with the recent approval of the Saguaro project (4 units for $1.5 million), we’ve show that the two methods used by the city offer dramatically different results –

Requiring the developers to build affordable homes on site produced nearly 7 times as many affordable homes as did the alternate method of allowing developers to pay the City “in lieu” fees and then have the City create the affordable homes.

In the case of Brookfield and Trumark Homes, the two developers gave the city $1.5 Million in fees in lieu of building 30 affordable homes, and with $1.5 Million we discovered that the City built 4 affordable homes. If this isn’t bad enough, it took the City nearly 4 years to create the homes with the affordable funds money while it took Brookfield and Trumark less than a year to build their onsite homes.

With this background, it is surprising to note that a new project, pushed by the Baker Ranch developers, proposes to adopt the “in lieu” system we’ve just discussed. Baker Ranch proposes to

• · Convert commercial real estate to residential
• · Pay “in lieu” fees for affordable homes instead of building onsite

This is identical to the Brookfield and Trumark proposals, and just like Brookfield and Trumark, Baker Ranch and associates have been generous contributors to City Council members.

There are many other similarities between the two proposals -

• · Both projects are being proposed before we have any idea of the impact of the 4,000+ new homes that are in the pipeline. Of the original OSA projects, only about 500 have been built and sold, so the impact of the remaining 3,500+ on traffic, schools, water, electricity, etc. has yet to be determined. Bear in mind we are in the middle of the worst drought in California history and we recently closed the San Onofre electricity generating station. Both water and electricity are in short supply for the homes we now have.
• · Both projects are building minimal amenities, thus placing a far greater burden on public resources than other developers have done.
• · Both projects are being built in the narrow strip of land close to the 241 Freeway, where nearly all the new homes will be located. This means that the population around or in Foothill Ranch and Portola Hills will double in the next few years.
• · Baker Ranch argues, as did Brookfield and Trumark before them, that their homes are but a drop in the bucket given the 4,000+ other homes that are being built, and therefore their impacts should be ignored since the 4,000+ other homes will have the impact and their homes are only minimally incremental.
• · Baker Ranch argues, as did Brookfield and Trumark, that the General Plan should be abandoned and they should be allowed to convert commercial space to residential, because there is no need for more commercial space in Lake Forest. This is, of course, a curious argument since that part of the City is about to double in size, and one can only imagine that 10,000+ new people will surely create a demand for more commercial space.

(Last week I drove through the Towne Center area and found only 7 vacant stores among the 100+ stores in the area. Along with these 7 vacancies I found more than a dozen stores with “Now Hiring” advertisements in their windows. So it looks like even without the 10,000+ new people Towne Center commercial stores are doing well.)

• · Neither Baker Ranch nor the other developers offered any research to demonstrate that in the current economic reality, converting commercial space to residential is the right thing to do from an economic perspective. IOW, is the City better served by keeping the space for commercial purposes rather than converting it? It’s interesting that Brookfield and Trumark refused to do such a study, even when it was required by the Council, and instead used their enormous campaign contributions to elect a new Council who promptly reversed the decision of the old Council and allowed the developers to proceed without the study. Now with pro-developer Council members in the majority, Baker Ranch doesn’t have to refuse to conduct such a study because the Council never asked for one.

Tomorrow we’ll summarize.

ABOUT THE AUTHOR

Dr. Jim Gardner is on the City Council for Lake Forest. You can check him out on LinkedIn and/or Facebook and you can share your thoughts about the City at Lake Forest Town Square on Facebook. His comments are not meant to reflect official City Policy.

Dr. Gardner has office hours every Tuesday from 3 pm to 5 pm at the City Hall. In addition, he holds a mini town meeting every other month. The next meeting will be on May 16 at 2 pm at the Foothill Ranch Public Library.

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