Orange flunks state housing plan with unlikely home-building sites

The City of Orange has once again flunked its state-mandated housing plan.

The state Department of Housing and Community Development has rejected Orange’s housing blueprint for nearly 4,000 homes, saying it includes too many developed parcels unlikely to be turned into housing, the Orange County Register reported.

Orange, like other cities in Southern California, was supposed to gain state approval in October 2021 for its “housing element” plan to accommodate 3,936 new homes by 2030.

But the state’s housing departments says the city’s latest draft contains homebuilding sites that include a public school, a hotel, a sheriff’s training facility and local shopping centers unlikely to face a wrecking ball.

Deed restrictions, easements, leases or other declarations likely would block residential development on those sites, according to a rejection letter from the state to the city.

The decision reverses earlier statements that state housing officials likely would approve the city’s 326-page “housing element” if resubmitted with suggested revisions. State officials changed course after a developer’s attorney and pro-housing groups challenged the plan, saying it was unlikely to meet the state-mandated housing goal.

State officials ordered Orange planners to return to the drawing board.

“The city should either provide additional analysis demonstrating that these uses are likely to discontinue in the (2021-2029) planning period or remove these sites from the inventory,” Melinda Coy, a state housing accountability chief, said in the letter. 

Aaron Schulze, an assistant to the city manager, told the Register in an email that the city “thoroughly addressed all of HCD’s criteria” when it resubmitted its revised housing plan on Feb. 15.

“Obviously, we are disappointed in the letter received today from HCD,” Schulze said. “The city maintains that the adopted housing element substantially complies with state law.”

Under a 53-year-old statute, local governments must submit new plans every eight years spelling out where homes can be built to meet future needs. As part of the plan, each city and county is required to provide its fair share of affordable housing.

Faced with a prolonged housing shortage, the state and the Southern California Association of Governments determined that Orange needs to plan for 11 times the number of new homes than during the 2013-21 planning cycle. Orange’s new housing target rose to 3,936 new homes by October 2029. Of those, 2,348 must be affordable to low- or moderate-income residents.

The OC city isn’t alone in failing to get its plan certified. This week, just half of the region’s 191 cities and six counties had approved housing elements due 18 months ago.

Jurisdictions failing to adopt housing elements on time face such sanctions as lawsuits, loss of state funding, a state takeover of planning and building decisions, and fines up to $600,000 per month. 

They also face automatic building approvals, regardless of zoning, under the so-called “builder’s remedy,” an untested provision in state law now being tried in such cities as Santa Monica. Orange already received two such builder’s remedy applications for nearly 600 homes.

A Century City-based law firm representing one of those builder’s remedy applicants sent letters to the state saying 89 percent of Orange’s needed homes are on 11 sites encumbered by deed restrictions, easements and other impediments.

“Contrary to the city’s claims, there is no realistic or demonstrated potential for the development of 3,522 residential units (including 862 claimed lower and very low income units) on the non-vacant sites identified in the city’s … sites inventory,” Allan Abshez of the Loeb and Loeb law firm said in a letter to the state.

The encumbered sites include the Outlets at Orange, the Orange Town & Country shopping center, the Stadium Promenade shopping center, and the City Town Center, Abshez and the state said.

They also include the Orange County Classical Academy, a public charter school with more than 500 students; an Ayres Hotel on Chapman Avenue; and an Orange County Sheriff’s Sandra Hutchens Regional Law Enforcement Training Center, where use will “be continued indefinitely,” Abshez’ letter said.

“Plainly,” Abshez wrote, “the city made no effort to conduct an analysis of any existing leases or state other contracts that would perpetuate the existing use or prevent redevelopment of these sites.”

— Dana Bartholomew