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Irvine Housing Fee Plan Is Called Too Expensive

April 11, 1990|WENDY PAULSON and DANICA KIRKA | TIMES STAFF WRITERS

IRVINE — A plan to fund affordable housing projects through fees on new commercial development drew opposition from businessmen who complained to the City Council Tuesday night that the suggested fees were onerous.

A committee appointed to study the issue recommended to the council that developers be charged $5.50 per square foot for office space, $5 per square foot for research and development facilities, $3.50 per square foot for hotel and retail buildings and $3 per square foot for manufacturing plants and warehouses. Residential development is not included in the fees.

At Tuesday's council meeting, representatives of the Building Industry Assn., the Irvine Co. and other developers supported the fee but asked that it be much less than those proposed by the committee.

But Peter Swartz, president of NH Research, complained that any fees would be detrimental to his business. He said the suggested fees would come to $250,000 for a property he plans to develop in the Irvine Spectrum complex, an amount he said would wipe out his profits.

"This (proposed) law sends a clear message that the long-term interests of my company are outside of the city," Swartz said. "I can't compete if I have a government that is loading up on me and making the costs of doing business higher and higher."

Richard G. Sim, president of the Irvine Co.'s investment property group, asked that the fees be lowered to $1 per square foot per office development and for-sale housing, and to 50 cents per square foot for all other development, including apartments.

The City Council adjourned its meeting without voting on the proposed fee schedule.

The fees stem from the council's decision last year to require that 12.5% of all future housing in the city be built for low-income residents. At the same time, the council directed a blue-ribbon committee to look into "linkage fees" to be imposed on businesses and developers, to establish a fund that would help finance affordable housing. Businesses should be targeted, the council majority said, because they bring workers into the city who cannot afford to live there.

Under the city's housing plan, 11.5% should be priced for households earning 80% of the county's median income, or roughly $36,000 a year, and 1% set aside for handicapped, elderly and others earning up to 30% of the county median.

Irvine is the first city in Orange County to create an affordable housing trust funded by developers. Several other California cities have similar policies, including San Diego, San Francisco and Santa Monica. San Francisco officials told The Times in an October interview that its housing fund has raised $29 million since 1985, helping to build or rehabilitate 5,690 homes.

The fees would apply to development permits requested after Oct. 24, 1989, and would be collected at the time an application is made,

Mark Petracca, a UC Irvine political science professor and member of the 15-person committee that drew up the fee schedule, praised the plan as a way of overcoming the prohibitive costs of buying a home in Irvine.

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