Costa Mesa joins ranks of O.C. cities appealing state housing allocations but could face an uphill battle

Following the lead of other Orange County cities, Costa Mesa City Council members decided Tuesday to appeal a state housing allocation that calls for the city to plan and zone for an additional 11,733 residential units between 2021 and 2029.

The city will have until Monday to submit a letter to the Southern California Assn. of Governments (SCAG) outlining its arguments against the city’s sixth-cycle Regional Housing Needs Assessment (RHNA) allocation, which further requires 4,702 of the proposed units be made available to low- or very low-income tenants.

Costa Mesa is not the first city to appeal the housing requirement — the Newport Beach and Laguna Beach city councils took similar measures last week, and Huntington Beach city officials on Monday opted to do the same.

“I’m not against housing, but I do believe the allocation is, as a practical matter, unrealistic,” Costa Mesa Mayor Pro Tem John Stephens said Tuesday. “And if we’re assessed penalties for not meeting those unrealistic benchmarks, that’s not very fair to the city of Costa Mesa.”

The SGAC region to which Orange County belongs also includes Los Angeles, Imperial, Riverside, San Bernardino and Ventura counties — an area comprising some 19 million residents in 191 cities.

California’s Department of Housing and Community Development determined in August the region would need to accommodate 1,341,827 residential units during the sixth RHNA cycle, from 2021 to 2029.

Each local jurisdiction is assigned a portion of the regional need based on the accessibility of jobs within a 30-minute commute and possession of a high-quality transit area, along with other demographic factors.

City staff claimed Tuesday SCAG failed to consider the lack of land available for urban development or conversion to residential use and did not take into account changed circumstances, such as job loss or the reduction in commuters and transit ridership sustained during the pandemic, when determining allocations.

“Whether or not SCAG grants the city’s appeal, the city has an interest in exhausting its administrative remedies, including the right to appeal,” assistant planner Justin Arios told council members.

Most city officials and candidates running for seats on the council in November have balked at Costa Mesa’s higher-than-usual allocation in the sixth RHNA cycle, especially compared to previous cycles.

For example, in the fourth cycle, from 2008 to 2014, Costa Mesa was asked to accommodate 1,682 units. In the fifth, from 2013 to 2021, that number shrank to two units.

Ping Chang, a SCAG program manager who oversees RHNA compliance, said his agency previously assigned allocations based on a jurisdiction’s projected growth. But two state laws passed in 2018 — Senate Bill 828 and Assembly Bill 1771 — changed the allocation equation.

“This time, the equation focuses on how we also need to address the [state’s housing] shortage,” he said. “Even if we don’t have any population growth for the next 80 years, we’ll still need housing.”

While only two appeal letters have been filed with SCAG, from the cities of Barstow and Cerritos, agency representatives are anticipating they’ll receive many more as Monday’s deadline approaches.

Costa Mesa council members said if a contingent of Orange County municipalities appealed together, it could make a stronger case.

“The fact that many, many Orange County cities are working together on this, I think that helps us,” said City Councilwoman Sandy Genis.

According to Chang, however, the new state housing rules are stringent and include penalties and fees for non-compliance. It’s not enough, he said, for cities to simply claim an allocation is too high. It’s also unlikely claims of pandemic impact alone will warrant approval.

Since the numbers are higher for everyone — and since all cities have suffered COVID-19 impacts — appellants would have to demonstrate a disproportionate impact.

“They would need to make an argument for why [an allocation] needs to be distributed more to other jurisdictions and less to them, or they’d need to demonstrate COVID-19 impacted them much more than others,” he said. “The appeal should only be the place to address exceptions to the laws, rather than to give everybody a second bite at the apple.”

The filing of an appeal triggers a 45-day comment period window that ends Dec. 9. After that, a series of public hearings will take place between Dec. 10 and Jan. 10, with a determination from SCAG anticipated in February.

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