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As the city tackles changes to its General Plan, affordable housing remains unclear

Rising costs of real estate and lowered rates of federal funding could mean affordable housing in Dana Point remains sparse for the foreseeable future. Photo by Andrea Papagianis

By Andrea Papagianis

With the city working to update its development and housing plans for current and future residents, one question looms: Is there room for affordable housing in Dana Point?

City staff is laying the groundwork for planning and development over the next seven years, and last week the draft housing element became available for public review, highlighting the need for lodging aimed at low-income households within the city’s 6.5 square miles.

The U.S. Department of Housing and Urban Development considers households paying more than 30 percent of their monthly income to cover housing “cost burdened” and at risk for being unable to pay for other necessities like food, transportation, clothing and health care.

According to the U.S. Census Bureau, the median household income of the city’s residents between 2007 and 2011 was more than $21,000 higher than the statewide median of $61, 632. The census also showed the population in Dana Point living below the poverty line was half that of the state’s 14.4 percent of residents.

But even with those positive numbers taken into consideration, a full-time worker making the state’s minimum wage of $8 per hour would need to work five 40-hour weeks a month—accounting for an annual gross income of $16,640—to cover the median cost of rent, estimated by the real-estate information website at $1,700 for a one bedroom apartment in Dana Point.

The housing element is one portion of the city’s larger General Plan, which acts as a blueprint for city leaders—complete with policies and programs—to help guide decisions on future land use. Such comprehensive, long-term physical development plans for all 533 incorporated California cities and counties are required under state law. The city’s draft plan that will direct development plans from 2014 to 2021 is presently being reviewed by state officials.

Included in the plan is the city’s Regional Housing Needs Assessment that is mandated under the state’s housing laws. According to Dana Point’s RHNA, a total of 327 affordable housing units are needed to meet expected growth over the next seven years.

The county keeps a running tab on affordable housing options throughout Orange County. The list compiled by OC Community Services shows just two apartment complex options for such housing in the city, one provided by the nonprofit OC Community Housing Corp. with 24 units located in Capistrano Beach, and the second, the Monarch Coast Apartments with 84 units off Crown Valley Parkway and Camino Del Avion. According to the county department, both have waiting lists at least six months deep.

“Affordable housing is highly competitive,” said Cathleen Murphy, the executive director of iHope, a San Clemente-based homeless outreach and advocacy nonprofit. “There are a lot of people in Orange County in need of low-income housing … and there is a desperate need for affordable housing both for families and seniors.”

Utilizing a small budget, the nonprofit was once able to provide rental assistance but as those funds became scarce, people had to be turned away. Murphy said the organization hoped to help people in need “fill in the gaps,” but once the money was gone each month, other services couldn’t be provided for.

With raising costs of real estate, city official believes meeting affordable housing goal laid out in the draft Housing Element of the General Plan could be a long shot. Photo by Jim Shilander
With rising real estate costs, city official believes meeting affordable housing goal in General Plan could be a long shot. Photo by Jim Shilander

Of the 1,300 clients served since iHope’s inception in September 2008, a majority are homeless living on the streets or out of their cars, or are right on the verge of homelessness, something Murphy said is all too common. But with dwindling funding and long waitlists for housing and federal vouchers, Murphy said the reality of it all is unlikely to change anytime soon.

Through the federal government’s Housing Choice Vouchers, or Section 8, the Orange County Housing Authority serves about 26,000 people a month. Funding through the voucher program allows the county to pay landlords directly, so that eligible tenants fall within affordable housing lines of paying 30 percent of monthly costs. But according to Karen Roper, the director of OC Community Services that oversees the program, the need for help is higher than what the county can offer.

Roper said an estimated 50,000 people are on the county’s waitlist for housing assistance, which is currently closed to new applicants. And with a staggeringly low rate of attrition, about 40 to 50 people a month, Roper said those currently waiting could remain doing so for at least a year.

“Since we cannot issue many new vouchers, we have to be proactive to secure other vouchers that we competitively compete for,” Roper said, but those vouchers for populations like the non-elderly disabled and veterans are targeted at very specific populations.

“With Section 8, HUD allocates a number of vouchers based on our population in need … and that applies to anyone of a certain income level,” Roper said.

Along with the funding limitations on vouchers, Roper said the county’s ability to finance affordable, multi-family rental developments was severely impacted by the federal government’s sequester. Roper said her department suffered a loss of 84 percent in funding for new development projects, which were once awarded from $5 to $10 million annually. When monies were flowing, the OC Community Housing and Development department had open Notices of Available Funding to inform developers of available funds, but said their application process for new projects has been shuttered for a few years.

One positive Roper highlighted was the county’s remaining $10 million in Mental Health Services Act housing funds that must be used to serve the “seriously and persistently mentally ill.” She added that now developers of affordable options have to “cobble resources together” to get housing in the ground.

Caesar Covarrubias the executive director of the Irvine-based Kennedy Commission, which works to create public policy resulting in the creation of homes for people earning $10 or less and hour in Orange County, said the issue comes down to identifying land for affordable housing developments and finding tax incentives for developers.

“There is a large need for cities to develop partnerships to build housing that is affordable to their workforce,” Covarrubias said.

He pointed to a “workforce housing” project in San Clemente as being a prime example of such a partnership. The project, which will be located on Avenida Serra, in San Clemente’s downtown corridor, is being developed by National Community Renaissance and primarily targets residents who might work in the downtown area, such as servers, bartenders or those working in shops.

According to plans approved by the city’s Planning Commission in May, the building would have 19 one bedroom units, with one reserved for a live-in manager, and require potential tenants to submit verification of finances for eligibility.

In the draft housing element, city staff has identified three potential under-used sites that could lend themselves to affordable housing, including land in the downtown Town Center strip, and the Capistrano Unified School Bus Yard and the former-site of the Dana Point Marina Mobile Home Estates in Capistrano Beach. Even though the bus yard is not currently zoned for residential use, the city can alter its zoning codes at any time with both Planning Commission and City Council approvals.

City Manager Doug Chotkevys said he has worked with developers in the past, but due to the high cost of land in the city, affordable housing projects have not gotten off the ground, and he said this is not likely to change.

“We are a built-out community, with a very, very high valuation of properties,” Chotkevys said. “When you look at the high cost of land, developers have a hard time penciling in affordable housing.”

While developers may not be flocking to Dana Point to build affordable housing units, Covarrubias mentioned a unique program at the St. Regis Monarch Beach Resort that helps eligible employees bridge gaps in income in order to live in the area.

When the St. Regis was built in 2002, part of the resort’s development permit included a measure to provide affordable housing to employees. Facing land restrictions in Dana Point, the company opted to provide monthly housing assistance to employees who meet household income, monthly rent cost and number of people living in the household criteria, said Christy Caporale, the marketing and communications manager for the St. Regis.

Currently, 97 full-time employees are enrolled, said Jill Martin, the director of programs with the Mary Erickson House in San Clemente that oversees the St. Regis’ housing assistance program. While Martin and Caporale were unable to supply monthly allotment figures, the city reported eligible staffers receive anywhere from $50 to $350 in assistance funds.

For now, the city will plan for reaching its targeted goal of affordable housing units, but under California law will not be penalized for not reaching the goal. So, as long as the city has a plan, and doesn’t implement any restrictions on development, no reverberations will be felt should goals go unmet.

Jim Shilander contributed to this report.

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comments (2)

  • I was totally unable to find a one story suitable home for myself, my aged mom (moving in with me) and 13 year old granddaughter. The rents for absolute crummy places were wildly high. The apartment complexes have delusions of grandeur, with rents in excess of $2200 for 1000 sf of space.
    Ultimately, I drove out to Fallbrook one day last fall–completely worried that I would never find the right place that could accommodate our family’s needs. Lo and behold–a gated community, with 60 houses, fenced, fruit trees, allowing my little dog and rescued kitty; four bed rooms and an office, hardwood floors, beautifully appointed including the gardener for $2150. In Dana Point, Laguna Niguel, etc. a similar house would cost $3600 or more. We are certainly not destitute people, but there is a limit on what a place is truly worth. Right now another house here is available — with a pool — and pool/landscape maintenance included for $2400. Of course, about 75% of the residents are USMC officers with families. Dana Point is beautiful, but I can’t live on sand and sea water.
    By the way, Fallbrook has a nice idea…a repository near the chamber of commerce office for folks to discard worn out U.S. flags. Then they are disposed of properly. If you want to experience a more relaxed lifestyle, come out here to the “avocado capital of the world.”

  • With a need to work “five 40 hour weeks a month” just to pay the minimum rent in the area it is the employers turn to up the antie for local workers. With jobs at a premium local employers are in the drivers seat to pick and choose less than full time employees to skirt benefitsand pay the least in wages.

    While a tax for a low income housing fund on employers who are paying less than full time wages would fix the issue. ( Both by behooving the employer to hire full time instead of part time increasing individual incomes) and help the limited resources available for the city to offer assistance, it is unlikely to pass. The city is interested in income from business and laboring the employers with a financial responsibility doesn’t add to that revenue.Too bad that the right thing to do isn’t in line with the profits to be made with the redevelopment of this fine town.

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