Giant landowner Irvine Co. says it’s willing to help Irvine meet its state housing mandate by building up to 2,500 apartments with rents more in line with local wages.
The city recently finished its housing plan, which includes adding roughly 20,000 new units by 2029. Irvine Co., the county’s largest landlord, is now starting the process to get city approval for three new apartment complexes at sites identified in the city’s homebuilding commitment.
There’s little doubt local renters could use a break.
By one count, Orange County’s typical rent of $2,632 — up 18% in a year — was the second-highest among U.S. counties in June. ApartmentList.com ranked Orange County right behind Manhattan (New York County) at $2,833 and just ahead of Napa ($2,555), Santa Clara ($2,549) and Honolulu ($2,534).
But if Orange County wants to make any significant progress on creating less-than-expensive rental options, it means numerous folks on both sides of the apartment-creation machine have to rethink how they do business. In Irvine, the idea is to put rentals at new hot spots for apartments — more urban, busy locales at or near shopping and job centers.
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Irvine Co. provided no costs or specifications for the apartments it’s proposing to build. However, any developer thinking about less-expensive units would likely target denser communities with smaller-sized units.
“These are mixed-use districts where residents will have immediate access to employment, shopping and transportation infrastructure,” Jeff Davis, an Irvine Co. senior vice president, told a city hearing in March. “Meeting economic and quality of life needs for recent graduates, young professionals and essential service workers — all within the community framework of a new mixed-use setting.”
Switch in plans
In the northern part of the city, Irvine Co. wants to put 1,400 units where it would demolish an underused slice of The Market Place retail center between Bryan Avenue and El Camino Real.
The site shares a parking lot with the center’s movie theater and is home to vacant space, short-term leases, poorly performing merchants and tenants willing to relocate.
The company has previously been willing to take bold actions with its retail space. At the Irvine Spectrum shopping center, it bought out the lease of retail anchor Macy’s in 2016, bulldozing the traditional department store and replacing it with smaller buildings in a collection of trendier merchants.
The developer’s other new rental site is further south in the city and a few blocks north of its Spectrum Center. Irvine Co. says it’s willing to construct up to 1,100 apartment units on two vacant plots at Gateway and Pacifica, both of which are zoned for commercial development such as offices.
Now you may be thinking “office is dead” and it’s a no-brainer switch for the land.
Don’t overlook Irvine Co.’s against-the-grain thinking, which has produced surprising results in two new office projects in Irvine in the pandemic era: Spectrum Terrace, off the 405, and Innovation Office Park, off the 5.
Long process
Please note these proposals won’t provide any quick cure for apartment hunters. If city approval is obtained next year, new units would not hit the market until 2025.
Construction requires city leaders to rezone a slice of a shopping center and land designated for offices. Most cities’ general plans are like living documents, adjusting over the years.
Altering development guidelines to meet current needs, however, often becomes political minefields. That debate can indefinitely stall developments that upset a slice of the voting public.
Yes, these projects have a good shot at becoming reality as cities across the state feel the state’s housing push. Such mandates put cities across the state in a tough spot, though, often angering voters who think cities are already crowded while pitting needs for housing and sales tax revenue against each other.
Producing housing is tough when developable land is rare, and lightly used retail spaces becomes an ideal target for redevelopment. Yet fears of shrunken tax collections give certain city leaders an excuse to be skeptical of such conversions.
In Irvine, new apartments would mean a modest loss of sales taxes collected by the merchants currently occupying the Market Place shopping space. However, won’t adding 1,400 housing units be a sales boost to the remaining retailers next door?
Another reason these Irvine sites have a decent chance of making it through the development approval process is the neighbors.
Both sites are next to apartment dwellers and other commercial properties. Rental projects frequently run into roadblocks when nearby homeowners find all sorts of odd objections.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
Source: Orange County Register
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