State Rejects City of Orange’s Non-Compliant Housing Plan Following Community Intervention

Chapman Yorba VIII, developer of a proposed 158-unit senior housing and affordable apartment project in Orange, announced that the California Department of Housing and Community Development (HCD) has rejected the City of Orange’s Housing Element update, rescinding its prior tentative approval of the City’s plan.

“Specific information was not included (in the plan) on the extent to which (existing uses) could impede new residential development,” wrote Melinda Coy, state accountability chief, in HCD’s April 14 disapproval letter.

The withdrawn approval was a result of community watchdogs and affordable housing advocates exposing the City’s unlawful reliance on sites that are currently developed with existing businesses and other uses as the proposed location of virtually all the multi-family housing needed to meet the City’s approximately 4,000 Regional Housing Needs Allocation (RHNA). Orange’s RHNA represents the City’s fair share of California housing needs, which the City must meet to help alleviate California’s prolonged critical housing shortage.

“The city should either provide additional analysis demonstrating that these uses are likely to discontinue in the (2021-29) planning period or remove these sites from the inventory,” Coy wrote. HCD took its unprecedented action after community advocates provided evidence that approximately 90 percent of the units claimed by the City could not realistically be provided on the properties the City had identified due to existing restrictions recorded against these sites.

“The City attempted to dodge its responsibility to cooperate in the relief of California’s housing crisis. It was caught violating AB 1397, which was adopted by the legislature in 2017 to end the prior city and county practice of identifying sites that cannot realistically be developed for housing as a means of avoiding the accommodation of new housing,” said Allan Abshez of Loeb & Loeb LLP, the law firm representing Chapman Yorba VIII. “Orange’s violation is particularly egregious considering the fact that it was the recipient of a $500,000 grant from the State to assist it in preparing a compliant housing element.”

Elizabeth Hansburg, director of People for Housing Orange County, a pro-housing group, joined Abshez in bringing attention to the City’s violation. “What’s particularly worrisome is that HCD, which has oversight responsibility to ensure compliance with AB 1397, was ready to approve Orange’s plan even though simple due diligence demonstrated that it was 90 percent deficient. This failure brings into question whether there are similar fatal defects in the 539 housing elements that are being updated, and whether the $250 million allocated by Governor Newsom to help localities comply with housing element law is being misspent and wasted. The obvious question is: Is California’s effort to bring an end to the housing crisis being defeated by smoke, mirrors and lack of oversight?”

While seeking exclusively to rely on nonvacant sites to meet its RHNA obligations, Orange had claimed there were no vacant properties in the City where housing might be accommodated. Chapman Yorba VIII is the owner of an eight-acre empty lot located at the corner of Yorba Street and Chapman Avenue in the southeastern portion of Orange. Chapman Yorba has been seeking the City’s approval of a proposed 158-unit senior housing apartment project – with 10 percent set aside for lower-income seniors – since 2020. The City refused to include Chapman Yorba’s vacant site in the City’s housing element update despite Chapman Yorba’s protestations that it should have been included.

In a recent letter to HCD, Abshez wrote, “We will be closely monitoring the City of Orange’s actions to respond to your April 14, 2023 disapproval and to produce a Housing Element that complies with State Housing Element Law.” Abshez also said that the important statewide implications involved with the matter merited a prompt issuance of an advisory or amendment to HCD’s current Housing Element Site Inventory Guidebook, and merit follow-up investigation by California Attorney General, Rob Bonta’s Housing Strike Force, which Bonta created to advance housing access, affordability, and equity in California.

About Chapman Yorba VIII LLC

Chapman Yorba VIII LLC is a California Limited Liability Company formed for the purpose of developing a mixed-use senior citizen apartment project on an eight acre empty lot located in the City of Orange, California. When completed Chapman Yorba VIII’s project will contain 158 senior citizen apartments, with 10% of the apartments reserved for lower income senior households.

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