City council votes to keep affordable housing fee

City officials kept open the option to decide whether a developer must pay a fee for not building a house that is affordable by city standards at its Tuesday meeting. They also want the fees raised substantially.

The City Council voted 4-0 not to support a proposal by the Housing and Human Services Committee to eliminate the fees that developers of residential subdivisions of three or more lots or units may pay in lieu of building affordable housing on or off the project site.

Staff opposed the proposal because the Planning Commission is in the middle of reviewing the Housing Element of the General Plan, which includes the affordable housing in-lieu fee, acknowledged to be woefully inadequate.

“Why are we even discussing this now,” Councilman Kelly Boyd said. “We are putting the cart before the horse. I think we need to take a good look at the fees and the Planning Commission needs to take a good look at the fees. We need to look at reality.”

The current in-lieu fee is about $50,000, which gets multiplied by the number of lots or units in a proposed subdivision of three or more parcels.

Staff has recommended increasing the fee to $151,000 per unit. The Planning Commission kicked around the notion of upping it to $300,000 per unit.

“The other night the Planning Commission talked at some length about how important it is to do something about affordable housing,” said Barbara Metzger, a Village Laguna spokeswoman.

“This would be a good time for them to know what you are thinking about this. If they all know you are serious about affordable housing getting built, it would be helpful to them.

“The cart may be before the horse, but maybe the cart needs to be before the horse.”

City Manager Ken Frank said he put the item on the agenda because the committee had a recommendation and he didn’t think he could just ignore it, even with discussions under way by the Planning Commission.

“I certainly agree with the staff that this [discussion] is premature and it should go back to the Planning Commission,” said Greg Vail, a spokesman for Athens Group, developer of a proposed project in South Laguna impacted by the affordable housing requirement.

South Coast Medical Center, with a potential subdivision in the works, would also be affected, which is why Councilwoman Elizabeth Pearson recused herself from the discussion and vote.

Pearson is the executive director of the hospital’s fund-raising foundation.

In-lieu fees helped subsidize the development of Hagan Place for people living with HIV, Alice Court’s 26, very-low income units, contributed to the purchase of Friendship Shelter, provides rent assistance for low-income seniors relocated from Treasure Island, and supported the Community Services Youth Shelter program.

However, due to very few subdivisions of three or more lots or units in the city, there is only $138,000 in the fund at present, Community Development Director John Montgomery said.

“I am discouraged about the whole prospect of affordable housing in Laguna Beach,” Planning Commissioner Anne Johnson said.

“What really bothers me is the future hospital, school district and city employees will never again be able to live in town.”

With the median house in Laguna selling for $1.5 million, the average wage earner is priced out of the market.

Mayor Pro Tem Cheryl Kinsman blamed the lack of affordable housing for the difficulty the city is having in filling vacant positions at City Hall or in the police department.

“People want to live where they work,” Kinsman said.

The council directed the commission to investigate flexible and practical ways to deal with affordable housing needs.

BARBARA DIAMOND can be reached at (949) 494-4321 or coastlinepilot@latimes.com.