Developer Seeks Change to Santa Ana Affordable Housing "Opt-Out" Fees

Developer Seeks Change to Santa Ana Affordable Housing "Opt-Out" FeesEXPAND
Photo by Gabriel San Roman/OC Weekly

Real-estate developer Ryan Ogulnick wants to change the rules of affordable housing in SanTana and thought he'd have an easy go at it, starting with a planning commission meeting last night. Back in February, the city council voted to rezone land along Dyer Road from industrial to residential, paving the way for Ogulnick's Heritage Village, SanTana's largest ever mixed-use project. With the Housing Opportunity Ordinance, the Vineyards Development CEO had been slated to pay $9.3 million for "in-lieu" fees to opt-out of making 15 percent of Heritage Village's 1,221 units affordable.

Instead of fronting the money right away when the first building permit is issued, Olgulnick wants to redraw the rules to allow for payments over time. He previously recommended that the in-lieu fees go towards a 69-unit proposal on East First Street, far from Heritage Village on the city's south side. The move to amend the ordinance angered many affordable housing advocates who lined up at the planning commission meeting to voice their opposition.

"[This] would cause uncertainty and significant delays for those needed housing funds to start building the greatly needed affordable housing in our city," wrote Ana Siria Urzua, Campaign Coordinator with Santa Ana Building Healthy Communities, in a letter to the planning commission. Fifty-four other letters came to dissuade them from the move. Planning and Building Executive Director Hassan Haghani began discussion on the request by explaining that the developer had been confused about the ordinance, believing phased payments to have always been an option.

"Would the applicant who brought it forward pay any less?” commissioner Phil Bacerra asked of the proposed change. "No," Haghani replied. Affordable housing advocates had a bone to pick with that contention and any amendment to the ordinance.

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"You can choose to invest in us," Urzua told the commissioners, stressing the need for affordable units today—not in five, 10 or 15 years from now.  She asked for those who would or already do benefit from affordable housing to stand up; more than half in the audience did so. "These are the people of Santa Ana that we ask you to invest in so that we can thrive."

Following Urzua was Cesar Covarrubias, Executive Director of the Kennedy Commission. "A lot of folks in the community put a lot of work into this ordinance," he said. He noted that the developer for Heritage Village was at the negotiating table before the ordinance passed in November 2011 and even gained "pipeline" project incentives that already accounted for $20 million worth of in-lieu fee losses. "All the amendments were accepted at that point by all parties. What’s fair is fair.”

SanTana resident Araceli Robles brought the urgency of the issue close to home. "In two weeks, I will be at risk of being homeless myself," she said in Spanish. "Housing is a human right. I wish I had a magic wand so that you could see how much we suffer." 

All speakers opposed making changes to the Housing Opportunity Ordinance save for the last. "The fee that is required of this particular project will remain the same and will be paid," said Pamela Sapetto representing Vineyards Development, the group behind Heritage Village. "There is a scenario that has not been discussed. What happens if that entire project is not built?"

Bacerra remained the most outspoken supporter of Olgulnick's request on the commission. "Those fees have got to be provided," he stated. "I don’t see how that changes here. If there was a loss of fees, I would have major concerns.” But Bruce Bauer spoke in favor of keeping the ordinance just the way it is, citing it as a disincentive against developers passing the buck on affordable housing. "I like it the way it is currently and for that reason, I’m going to vote against [the proposed amendment]," Bauer said.

It looked like he'd be the lone dissenter, but when the other commissioners voted, Mark McLoughlin, an appointee of Mayor Miguel Pulido, surprisingly joined him! The planning commission split 2-2, with two commissioners absent. 

With the deadlock, staff will draft a report presenting both sides without giving any recommendation on changing the ordinance to SanTana's city council. Let's see what happens next...


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