Agenda - 03-21-1990 - Laserfiche WebLink

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150 LAND USE AND ENVIRONMENT [6] purchase credits from other builders who have built and deliv- ered more than their share of deed-restricted, price-controlled low- and moderate-income units. These credits, each of which carries with it the right to build three market units in a develop- ment of over four units without the obligation to build low- or moderate-income units, have sold for prices ranging up to $15,000.10 In Orange County, where the median income is $33,425 per year, the system has worked surprisingly well. This is largely because the Orange County income definition of low- and mod- erate-income families is high. This housing delivery system does not attempt to provide housing for families within the lower-income range (0 to SO percent of median) targeted by most federal housing programs. Condominiums, selling at prices be- tween $72,000 and $95,000 (very low by Orange County stan- dards),qualify and apparently builders can make a profit,even in Orange County, by bringing in housing at reasonable densities • within these ranges, particularly after they have sold the credits. _ - In addition, Orange County has provided buyers of such afford- . . able projects with tax-exempt bond issues to cut mortgage rates, faster processing, reduced parking requirements, and waivers of the numerous fees for sewer, water, schools, and parks, which burgeoned after enactment of Proposition 13.11 These benefits are required under California statutes, which require both "regu- latory concessions and incentives" to enable moderate-income housing to be built.12 There is no statutory requirement that the lost profits or costs of the inclusionary system be balanced with the benefits offered. The Orange County program is clearly the most successful inclusionary program ever attempted on any scale in this country if success is to be judged by the number of units actually built and delivered with resale price controls. Its success must be in part attributed to the willingness of the builder-developers to play by its rules and to subsidize each other by allowing the credits to be bid up to a level within the free-market system that in some way reflected the profit opportunities lost by producing housing below its fair-market price. Its success may also be a result of its scale and the particularities of the Southern Californ:,. housing market, which by 1979 had escalated so far 10 A.Mallach,note 7sapra, ch..7:Schwartz&Johnson.note 2supra, at 15. " Breckenfeld, note 5 supra. at 150. 72 Cal. Gov't Code § 65915 (West 1983).