78 F
Laguna Hills
Monday, Jul 22, 2024

58,000 New Homes for Irvine?

The state of California is forcing the city of Irvine to boost its housing supply by almost 50% in the next two decades.

Irvine is going along, albeit reluctantly.

Irvine, which currently has 117,406 housing units, is updating its General Plan, with initial plans calling for nearly 58,000 new homes and apartments by 2045 for Orange County’s fastest-growing city.

“Just because we’re planning for 58,000, doesn’t mean that 58,000 will get built,” Irvine Mayor Farrah Khan told the Business Journal.

The Irvine City Council “probably wouldn’t have picked to zone 58,000 units, but given the state’s housing requirements, we’ve had to develop an updated master plan for Irvine that comports with state requirements, while protecting our local quality of life.”

The so-called 2045 General Plan, which was approved by the city’s planning commission on May 16, may go to the city council for a vote possibly as soon as July 23 if the city’s Airport Land Use Commission approves the plan during its June 20 meeting.

That could mean more projects in the Spectrum area of the city for companies like Newport Beach-based Irvine Co., California’s largest office and apartment owner, and more residential land sales for Irvine-based master developer Five Point Holdings LLC (NYSE: FPH), which oversees the Great Park Neighborhoods.

The Goal

California Gov. Gavin Newsom has set a goal to build 2.5 million new housing units by 2030, saying it will reduce home prices and create more choices.

Chapman University Economist Jim Doti has written several reports in the Business Journal disputing these claims and questioning the state’s methodology.

The state legislature has imposed a series of laws dictating how many units each city must build. Cities that don’t meet the mandates can be fined, lose the power to control their own zoning or be sent into a court receivership and have decisions made for them.

Irvine’s local government would also lose millions in state funding, totaling around $20 million a year comprising of grant funding, building and planning fees, and fines for each month in which the city has not met its housing mandate, among other costs.

Irvine’s plan calls for increased housing development in the Irvine Business Complex (IBC), the Irvine Spectrum region and the Great Park Neighborhood Transit Village area. Rather than rezone the areas, the city aims to implement a residential and mixed-use zoning overlay that spurs new projects across the city. A majority of that overlay allocates medium- to high-density multifamily development.

“We’ve done an incredible job of making sure that our current villages are not impacted by this number,” Khan said.

Khan also noted that although the current iteration of the General Plan calls for 58,000 units, “it will really depend on where the developers can deliver.”

By state law, the city is required to complete the plan by next February.


The city of Irvine has designed a plan that will “allow great flexibility for property owners and developers,” city filings said.

Irvine, which last comprehensively updated its general plan in 2000, began in 2015 to update it again, but it was delayed by a state law mandating that Irvine add 23,610 units by 2029, a number that rises to 57,656 by 2045.

“It’s a huge number,” Khan said. “We understand that, and the way it was calculated was not fair for our city,” because it’s a measure of Irvine transportation corridors that have yet to be approved by the Orange County Transportation Authority.

“We don’t know if they’ll be approved, but we’re required to plan for it.”

The city to date has delivered 4,572 units of its goal, according to its 2023 annual progress report.

The General Plan’s current iteration allows residential projects on non-residential properties located in the IBC, the Spectrum area or in Great Park Neighborhood Transit Village, city filings indicate.

Such developments must, however, include a minimum density of 50 dwelling units per acre. That’s more than the state’s guidance of 30 units per acre, which the city has been following since the adoption of its housing requirement.

Additionally, at least 15% of the projects’ units must be affordable.

Housing complexes with 250 units or more are required to provide retail or other ancillary services to residents, according to filings. The policy aims to comply with the city’s land use element, which promotes “the creation of walkable neighborhoods close to retail and services,” city filings say.

Spectrum Boom

Among the designated development regions, the Spectrum area has been allotted the most housing—more than 26,600 units.

The IBC will see the second-largest growth in housing units, with an additional 15,000 slated in the plan.

The area a few years ago hit its current cap for new housing units around the airport, 15,000.

The Great Park Neighborhood Transit Village Area will see the smallest increase in residential units: 5,252.

FivePoint currently has entitlements for 10,500 units in that area; by the end of 2023, 8,124 of those homes were spoken for.

Irvine planners say their latest iteration of its General Plan accommodates the rapid population growth the area has seen over the past few years.

From 2020 to 2021, Irvine’s total resident count jumped almost 11% from 277,988 to 307,670; it reported 303,051 in 2023.

Irvine remains the only major city in OC whose population has seen sizable growth from 2020 to 2023. By contrast, the populations of Fullerton, Newport Beach, Tustin, Huntington Beach and Costa Mesa each fell around 3% during the same period.

Should the current General Plan update not receive approval, the city of Irvine has drafted up an alternative with less units that calls for 42,637 units, which is about 15,000 fewer than the currently proposed plan.

State’s Housing Mandate Not Rational: Doti

Jim Doti says the California government’s effort to mandate increased housing is “draconian” and out of date.

“There is no rationale for these housing mandates,” Doti told the Business Journal.

Doti, one of the nation’s most accurate economists and president emeritus of Chapman University, follows housing development closely as part of his economic forecasts.

If the idea of increased housing mandates is to lower home prices, Doti noted that housing prices appreciated greatly between 2019 and 2022 at a time when about 1.1 million people left the state, freeing up about 411,000 homes. Furthermore, another 300,000 units were added to the state’s total of homes, which was 14.6 million in 2022.

“If these mandates are to bring prices down, where’s the analysis?” Doti said.

The state’s current plan forces cities to increase housing units by 80,000 annually by 2030, Doti said. However, Doti’s analysis shows that the housing demand will increase by only 19,000 annually in the coming six years.

The law requires Irvine to add about 58,000 housing units—a 50% increase—by 2045.

“It’s a pie in the sky number,” Doti said. “It’s not based on any compelling economic analysis that supports that kind of number.”

Doti’s solution is to “let the market decide. The market responds to supply and demand.”

Want more from the best local business newspaper in the country?

Sign-up for our FREE Daily eNews update to get the latest Orange County news delivered right to your inbox!


Featured Articles


Related Articles