In hopes of curtailing a housing shortage that locals say prices many of them out of their own city, the Long Beach City Council gave preliminary approval Tuesday to a citywide inclusionary housing ordinance.
The ordinance, already used in the Downtown and parts of the Midtown neighborhood, would require developers — including those of upscale homes and apartments — to include reduced-priced apartments or houses as a condition of approval for their market-rate housing.
After its first reading Tuesday, the item will come before the council again at a later date for final approval.
Under their plan, 12% of new homes and apartments by 2027 would be reserved for people who make less than 71% of the county’s median income — $98,200 a year for a family of four.
Officials are taking a three-year approach, phasing in the law in increments: at least 6% affordable housing in 2025, 8% by 2026 and 12% by 2027. Percentages are divided between low- and very low-income units, and the shares of each depend on the state-defined “opportunity areas,” between High Resource, Moderate Resource and Low Resource.
Inclusionary affordability requirements for ownership housing units, meanwhile, will start at 200% of the Area Median Income and be scaled down incrementally once 200 ownership units have been entitled or a set time period — one or two years — has passed, whichever is longer.
Officials explained this is meant to spur more housing production for owned homes, as very few have been produced since 2021.
The local low-income rate differs from other California counties as the federal government has designated greater Los Angeles as a high-cost-of-living area, officials explained, therefore increasing the income limit to accommodate.
“That means a family of four making almost a hundred and eleven thousand dollars is still struggling to afford housing and therefore is considered low-income,” explained Stephanie Harper, a city affordable housing project manager.
The council’s move is an expansion of a 2021 ordinance already in use Downtown and along a stretch of Midtown Long Beach, which required 11% of rental units and 10% of ownership units to be set aside as affordable.
According to city officials, 970 new affordable units and 168 Inclusionary Housing affordable units have since been constructed in these areas through the end of 2023, according to a city presentation.
Laws like inclusionary housing rules have been touted by housing advocates as a useful tool in production — and blasted by some builders and owners who say they stifle it.
Developers say the policies hurt their profitability and increase housing costs for other buyers and renters.
But John Edmond with the Apartment Association of California Southern Cities said the organization does not oppose the citywide expansion. “Long Beach is in a housing crisis and we need more development, not less, but we want to make sure we don’t overburden policies that deter new projects or discourage investment or slow investment.”
Advocates of low-cost housing say that developers need to consider the pent-up demand of low and middle-income people.
“Many community members are waking up every day in fear they may not have a home tomorrow,” said Kimberly Lim with Long Beach Forward. “Some community members are working two, even three jobs but still aren’t able to afford a safe place for their children to sleep.”
Under benchmarks commonly used by planners and housing authorities, a home is considered affordable if a household that makes 120% or less of an area’s median income doesn’t need to spend more than a third of its earnings on housing.
Yet that’s increasingly rare, according to residents and housing advocates, who spoke at Tuesday’s council meeting.
“Children need places to live and if you’re against developing housing, you’re against children, you’re a nihilist and you’re anti-American and anti-human,” said resident and activist Senay Kenfe.
It comes as an increasing number of people in Los Angeles County and across California say they have become priced out of the real estate — and even the rental market.
“I want to live in a Long Beach where everybody has safe and affordable housing across the entire city,” said James Suazo with Long Beach Forward. “I want to live in a Long Beach where people aren’t worried living paycheck to paycheck.”
And pressure is growing on cities and counties to accommodate them.
Through the end of 2023, the city permitted only 3% of the affordable housing it is projected to need by 2029, according to its state Regional Housing Needs Assessment. In contrast, developers have built one-fifth of its needed market-rate apartments. Between 2014 and 2020, the city produced 115% of its needed market-rate homes, but only 16% of its needed affordable housing.
Karen Reside of the Long Beach Grey Panthers, a senior citizen advocacy group, said the No. 1 complaint she hears at the senior center is for more affordable housing. “Most of the seniors that come into the center are living on a thousand dollars a month or less,” Reside said.
Rathana So, a housing counselor with the United Cambodian Community, said a couple of years ago she could find a two-bedroom apartment in Long Beach for $1,500. “Today I can barely afford a $1,500 studio,” So said. “Just think about that.”
The city’s final version of the program did omit some requests from housing activists, specifically around the removal of the three-year phase-in process and raising the affordable unit requirement from 12% to 16%.
Long Beach Community Development Director Christopher Koontz justified the phase-in approach as customary, saying developments are typically planned five years in advance and developers need time to absorb the added costs.
Of the more than 170 communities in California — 21 in Los Angeles County — that use inclusionary housing ordinances, Koontz said his team wasn’t familiar with a single one that didn’t include a phase-in approach.
Anything above an 11 to 12% inclusionary requirement, he added, would result in a “significant dropoff” in the number of constructed projects.
“What happens is if there isn’t enough time for those changes to phase in, the market can seize up,” Koontz said. “Transactions would not occur, projects would not move forward and we would end up with less production overall.”
They also did not include “extremely-low” income units, as there are no jurisdictions in California that have it and the three cities that have studied it — Albany, Jackson and Freemont — ultimately steered away from it, Koontz said.
“Inclusionary is one tool among many tools that we use to address our housing needs,” he said, adding it’s not “the correct tool” to address extremely low-income units.