Newport Beach eases affordable housing rule near airport

Newport Beach City Council voted Tuesday to lower affordable housing requirements for for-sale developments in a residential overlay near John Wayne Airport, Voice of OC reported.

The change affects an airport-area zone that accounts for about 25% of the city's planned housing capacity as Newport Beach works under state housing requirements.

The council approved the amendment in a 5-0 vote, according to Voice of OC. Mayor Lauren Kleiman recused herself and Councilmember Joe Stapleton was absent.

The new rule applies only to for-sale projects in a defined area near Bristol Street, Birch Street, Macarthur Blvd. and Jamboree Rd. For those projects, the low-income affordable housing requirement drops from 15% to 6%, with an 8% moderate-income set-aside added. Rental projects in the overlay remain subject to the 15% standard.

Voice of OC reported that the airport-area overlay was established in 2012 with a 30% affordable housing requirement for 30 years. The city reduced that minimum to 15% in 2023.

Intracorp Homes sought the change after a 67-unit condominium project approved in 2024 was no longer financially viable under the 15% rule, according to Voice of OC. A Newport Beach staff report said, "With today’s rising construction costs and land values, the 15% Inclusionary Requirement is not financially feasible when applied to for-sale housing developments within the Overlay".

The staff report also said, "Inclusionary housing percentages for for-sale housing greater than 6% for lower-income levels and 8% for the moderate-income level would likely render most for-sale residential projects financially infeasible to develop." Resident Adam Leverenz opposed the move, saying at the council meeting, "It’s frustrating to continue to see the catering to the developers at the expense of the city and possibly residents who might need affordable housing to be able to live here and work in some of these lower-income jobs,"

Newport Beach must plan for 4,845 homes by 2026 under state requirements, with housing needs through 2029 including 1,456 very-low-income units, 930 low-income units, 1,050 moderate-income units and 1,409 above-moderate-income units, Voice of OC reported.

Orange County income limits cited in the report put a family of four at $148,850 for low income and $166,300 for moderate income.