HomeMy WebLinkAboutPH-3 - 26-170 - Housing Element Site Rezone and Update - 3/17/2026Page 1 of 8
City of Costa Mesa
Agenda Report
77 Fair Drive
Costa Mesa, CA 92626
Item #: Meeting Date: 3/17/2026
TITLE: ADOPTION OF A RESOLUTION TO AMEND THE SIXTH CYCLE HOUSING ELEMENT (2021-
2026) OF THE CITY OF COSTA MESA GENERAL PLAN (PCTY-26-0001) IN CONJUNCTION WITH
THE HOUSING ELEMENT SITES REZONING (PCTY-25-0008 AND PSPA-26-0001) AND FINDING
THE PROJECT EXEMPT FROM ENVIRONMENTAL REVIEW UNDER THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT
DEPARTMENT: ECONOMIC AND DEVELOPMENT SERVICES DEPARTMENT/ PLANNING
DIVISION
PRESENTED BY: MICHELLE HALLIGAN, SENIOR PLANNER, ANNA MCGILL, ADVANCE
PLANNING MANAGER, AND CATHY TANG SAEZ, DUDEK
CONTACT INFORMATION: MICHELLE HALLIGAN, SENIOR PLANNER, (714) 754-5608
RECOMMENDATION:
The Planning Commission recommends the City Council adopt Resolution No. 2026-XX to adopt the
amendments to the Housing Element of the City’s General Plan to add two Housing Element
Opportunity Sites and remove 17 Housing Element Opportunity Sites from Appendix B and the
associated Environmental Quality Act environmental determination (Attachment 1).
Proposed sites to be added to the Housing Element Sites Inventory
HE Site Address or APN HE Site Address or APN
209* 2000 Harbor Blvd. 210* 418-181-11 (address to be
assigned)
* Proposed Housing Element Site Unique ID
Proposed sites to be removed from the Housing Element Sites Inventory
HE Site Address or APN HE Site Address or APN HE Site Address or APN
96 610 W. 18th St. 140 685 Sunflower Ave. 195 2180 Harbor Blvd.
134 3390 Harbor Blvd. 141 3410 Bristol St. 198 APN: 140-041-83
136 3390 Harbor Blvd. 145 3333 Bristol St. 203 1590 Adams Ave.
137 3315 Fairview Rd. 146 APN: 412-491-11 204 1590 Adams Ave.
138 1201 S. Coast Dr. 147 3333 Bristol St. 205 3420 Bristol St.
139 3400 Bristol St. 194 2180 Harbor Blvd.
Item #: Meeting Date: 3/17/2026
Page 2 of 8
BACKGROUND:
Many California jurisdictions, including the City of Costa Mesa, are using overlay districts as a
mechanism for implementing their Housing Elements. An overlay district is a type of zoning that allows
for supplemental or additive uses (such a residential or commercial uses) in addition to the base zoning
allowed uses. In the case of Housing Element implementation, and as was intended by the proposed
City’s Mixed Use Overlay District (MUOD), the City could meet its Regional Housing Needs Assessment
(RHNA) by adding an overlay district on top of base the base zoning to allow for residential and mixed
use (residential + commercial) development (see Figure 1 below). Overlays were meant to be flexible
and additive for property owners, whereby a property owner could continue to develop under base zoning
or utilize the overlay for additional development opportunities. Under this assumption, several property
owners expressed interest in being added to the City’s Housing Element Sites Inventory as a means of
obtaining additional development opportunities. As part of the overall Neighborhoods Where We All
Belong (NWWAB) rezoning efforts, the City is studying additionally applying a Mixed-Use Overlay District
to Measure K sites that are not Housing Element Inventory Sites (see Attachment 5). Wider community
visioning and an Environmental Impact Report (EIR) is being conducted as part of this wider effort.
Figure 1. Overlay District and Base Zoning Functionality
On October 10, 2025, the California Court of Appeal (Second Appellate District), in New Commune DTLA
LLC v. City of Redondo Beach, held that a residential overlay on Housing Element sites cannot satisfy a
jurisdiction’s RHNA if the underlying zoning allows development without residential uses. The California
Supreme Court declined to review the decision.
Item #: Meeting Date: 3/17/2026
Page 3 of 8
The opinion held that in order to meet the RHNA, the zoning or an overlay district on Housing Element
sites must require:
1. At least 50 percent of new development on each site to be residential; and
2. A minimum density of 20 units per acre, which is also consistent with another court case, Martinez
v. City of Clovis (2023), concluding that an overlay to establish residential development on
Housing Element sites shall have a minimum density of 20 units per acre to meet the intent of
state law.
Staff determined that the Court of Appeal’s opinion means that any overlay on Housing Element sites
would need to supersede the base zoning and require new development to include a minimum of 50
percent residential at a minimum of 20 units per acre. This opinion represented a large shift in how
jurisdictions previously understood and utilized overlays for Housing Element implementation. Put
simply, this opinion represented a potential loss of flexibility.
Following the Court of Appeal decision, the City sent a letter to property owners on the Housing Element
sites inventory, informing them of the court opinion and that it may affect property for future development,
as well as request for their contact information to keep them informed on the Neighborhoods Where We
All Belong (NWWAB) effort and any other associated regulations that may affect their property. In
response to this letter, the City received a several calls, emails, and meeting requests from Housing
Element site property owners. These inquiries ranged from general questions to requests to be added to
the NWWAB project’s interest parties list, to concerns about remaining on the sites inventory.
Concurrently, staff have also been fielding calls/meetings from property owners that have expressed
interest in being added to the sites inventory.
On February 9, 2026, the Planning Commission held a public hearing on amendments to the Zoning
Code, Zoning Map and North Costa Mesa Specific Plan (NCMSP) to rezone the Housing Element
Sites and implement programs of the City of Costa Mesa Sixth Cycle (2021-2029) Housing Element.
The Planning Commission recommended that the City Council find that the project is statutorily
exempt from CEQA pursuant to Public Resources Code section 21080.085(a) (SB 131), adopt an
Ordinance amending chapters in Title 13 of the Costa Mesa Municipal Code (Zoning Code), and
recommend that the City Council adopt a Resolution or Ordinance approving an amendment to the
NCMSP for consistency with the Mixed-Use Overlay District (MUOD) on Housing Element Opportunity
Sites. The Planning Commission received public comments from property owners requesting to be
removed/added to the Housing Element Sites Inventory to also exclude those sites from the MUOD. As
part of their motion, the Planning Commission directed staff to revise the MUOD to reflect the request.
• February 9, 2026, Agenda Report and Attachments:
https://costamesa.legistar.com/LegislationDetail.aspx?ID=7869925&GUID=46ADE2E0-93B1-
4307-BB85-FCF45BA3A0C2
At their February 23, 2026, meeting, the Planning Commission considered and recommended the
City Council approve an amendment to the Housing Element of the General Plan to add two sites and
remove 17 sites (listed in Tables 1 and 2 below) at the request of their respective owners. This
targeted amendment to Appendix B simply added text references to two Measure K sites joining the
inventory and removed text references regarding the 17 sites. If adopted by the City Council, the
amendment of the sites inventory will trigger a 180-day time period wherein the City must conduct a
“no net loss” analysis, identify adequate sites to maintain capacity to meet the RHNA, and obtain
Item #: Meeting Date: 3/17/2026
Page 4 of 8
approval from the California Department of Housing and Community Development (HCD) prior to the
City Council adopting revisions to the Housing Element. The Planning Commission voted 6-1 to
approve a resolution recommending City Council approval of the amendments (Attachment 7). Public
comments pertaining to the Planning Commission agenda item from the February 23, 2026 are
provided in Attachment 8.
• February 23, 2026, Agenda Report and Attachments:
https://costamesa.legistar.com/LegislationDetail.aspx?ID=7922544&GUID=692D0434-F1D3-
4FC7-A9F2-21B75AC2D44B
DESCRIPTION:
Staff received letters from three property owners requesting to have their sites removed and letters from
two property owners requesting to have their sites added to the City of Costa Mesa Sixth Cycle (2021-
2029) Housing Element Sites Inventory (see Attachment 4). In their letters, property owners noted
long-term nonresidential uses and concern about the New Commune DTLA LLC v. City of Redondo
Beach court opinion and its potential impacts on their property, including potentially reducing future
development flexibility. To maintain transparency while implementing the Housing Element, including
evolving state legislation and court decisions, and in alignment with the Planning Commission
direction at the February 9, 2026, public hearing, the City initiated a General Plan Amendment to
honor these requests by proposing to add two and remove 17 Housing Element Opportunity Sites
listed in Tables 1 and 2:
Table 1. Proposed sites to be added to the Housing Element Sites Inventory
HE Site Address or APN HE Site Address or APN
209* 2000 Harbor Blvd. 210* 418-181-11 (address to be
assigned)
* Proposed Housing Element Site unique ID
Table 2. Proposed sites to be removed from the Housing Element Sites Inventory
HE Site Address or APN HE Site Address or APN HE Site Address or APN
96 610 W. 18th St. 140 685 Sunflower Ave. 195 2180 Harbor Blvd.
134 3390 Harbor Blvd. 141 3410 Bristol St. 198 APN: 140-041-83
136 3390 Harbor Blvd. 145 3333 Bristol St. 203 1590 Adams Ave.
137 3315 Fairview Rd. 146 APN: 412-491-11 204 1590 Adams Ave.
138 1201 S. Coast Dr. 147 3333 Bristol St. 205 3420 Bristol St.
139 3400 Bristol St. 194 2180 Harbor Blvd.
Item #: Meeting Date: 3/17/2026
Page 5 of 8
The proposed targeted amendments to the City of Costa Mesa Sixth Cycle (2021-2029) Housing
Element are limited to revisions to Appendix B to add or remove the proposed Housing Element Sites.
Note that these amendments represent simplified updates at this time, with more comprehensive and
thorough amendments to be completed throughout the Housing Element at a later date as the City
engages in the No Net Loss analysis process described later in this report. The proposed amendments
to Appendix B are included in Attachment 2 (Exhibit A). A strikethrough version of the proposed targeted
amendments is included in Attachment 3.
ANALYSIS:
Staff is proposing targeted amendments in response to the requests received from property owners to
either be added to or removed from the Housing Element. To date, staff has received letters from two
property owners requesting two sites be added to the Housing Element Sites Inventory as well as letters
from three property owners requesting a total of 17 sites to be removed (Attachment 4). The full
breakdown of sites proposed to be added and removed from the Housing Element Sites Inventory is
included in Attachment 6.
For sites proposed to be added to the Housing Element Sites Inventory, the City must assign a unique ID
and make appropriate assumptions for the density and distribution of income levels for the site. This
information is summarized in Table 1 of Attachment 6. The proposed Housing Element site with unique
ID 210 (APN 418-181-11 adjacent to 2821 Bristol Street) is an active planning entitlement application
(PRZN-26-0001), and the assumptions for this proposed site are consistent with the proposed entitlement
request. In the case of the 2000 Harbor site, staff have been in conversation with the anticipated
owner/developer and have included assumptions for this site based on pre-application discussions.
Including realistic assumptions is intended to help prevent the City from having to make future no net loss
findings for these specific sites.
For the 17 sites requested to be removed from the Housing Element Sites Inventory (as summarized in
Table 2 of Attachment 6), proposed revisions include removing the site from the Appendix B Sites
Inventory table and any additional references to that site within the Housing Element. While these sites
will not be proposed to be rezoned as part of the proposed actions to City Council on March 17, they are
still Measure K sites and will become part of the overall considerations of the longer term NWWAB process
(as identified on the Attachment 5 Updated Housing Element Opportunity and Measure K Sites Map).
Overall, this request would result in a net loss of 15 sites and 5,431 housing units from the City’s Housing
Element Sites Inventory. Table 3 shows the total net unit loss and the loss in each income category.
Given these net losses, the City will need to make No Net Loss findings and determination and begin a
process to reopen its Housing Element.
Table 3. Total net units lost from the Housing Element Sites Inventory
Net Units Very Low Low Moderate Above
Moderate
Total 5,431 843 455 869 3,264
Item #: Meeting Date: 3/17/2026
Page 6 of 8
No Net Loss
The "No Net Loss" provisions of state Planning and Zoning Law (Government Code section 65863)
provide that if housing developments are approved on these sites with fewer lower income units than
projected in the Housing Element, the City must demonstrate within 180 days that it still has enough
sites designated in the Housing Element to accommodate the City’s remaining need for lower income
housing. State law provides that the City must make the findings whenever it “allows development …
by administrative, quasi-judicial, legislative, or other action” that results in fewer units by income
category than identified in the City’s Housing Element. When approving development projects with
fewer lower income units than shown in the Housing Element, the City must make the findings and
determination for No Net Loss per Government Code section 65863. If after the identified action,
insufficient sites remain, the City must identify within 180 days and “make available” additional sites to
accommodate the City’s RHNA at the appropriate income levels.
While there is no specific legal requirement to maintain a buffer and part of the Housing Element,
jurisdictions typically plan for and maintain a healthy “buffer” (usually 10-20 percent) as part of their
RHNA cycle, so that they can continue to process entitlements for development projects and still make
the needed findings and determination for No Net Loss, without the need to continually reopen the
Housing Element during the planning period (2021-2029). The City’s adopted Housing Element
includes a 45 percent buffer, accommodating 17,042 units when the RHNA is 11,760.
The proposed amendments to the Sixth Cyle (2021-2029) Housing Element constitute a legislative
action removing net 15 sites and 5,431 net units. This action will essentially remove the entire RHNA
buffer and remove some of the sites needed to meet RHNA in certain income categories (such as low
and very low income). As such, the City must make the necessary No Net Loss findings and
determination and will have 180 days to identify new Housing Element sites to accommodate the City’s
RHNA. Following City Council action on these amendments, staff will be initiating a Housing Element
update to increase housing capacity and/or identify additional sites necessary to maintain capacity for
RHNA and an appropriate buffer (typically 10-20 percent).
GENERAL PLAN CONFORMANCE
The proposed amendments to the City of Costa Mesa Sixth Cycle (2021-2029) Housing Element comply
with Government Code section 65863 and are consistent with Program 3A, which requires the City to
maintain an inventory of vacant and underutilized sites and provide this inventory to interested
developers. The City must monitor the Housing Element throughout the planning period and ensure
that the City has adequate sites available to accommodate its RHNA. According to Government Code
section 65863, a local jurisdiction shall not “permit or cause its inventory of sites identified in the
housing element to be insufficient to meet its remaining unmet share of the regional housing need for
lower and moderate-income households.” As part of the City Council’s action tonight, the City makes
the findings and determination for No Net Loss per Government Code section 65863 and will then
have 180 days to identify and “make available” additional sites to accommodate the City’s RHNA at
the appropriate income levels.
Item #: Meeting Date: 3/17/2026
Page 7 of 8
ENVIRONMENTAL DETERMINATION
On November 15, 2022, the Costa Mesa City Council adopted Resolution No. 2022-67, certifying the
Mitigated Negative Declaration (MND) and adopting the Mitigation Monitoring and Reporting Program
(MMRP) that analyzed the candidate housing sites for the 6th Cycle (2021-2029) Housing Element. The
Mitigated Negative Declaration provided environmental clearance for the adoption of the Housing
Element, which included the overall Regional Housing Needs Allocation (RHNA) and additional capacity
to maintain a buffer. The action to add/remove Housing Element sites falls within the capacity studied
under this MND and MMRP. Additionally, pursuant to SB 131, on July 1, 2025, a new statutory CEQA
exemption, Public Resources Code section 21080.085(a), went into effect, providing an exemption for
actions needed to implement Housing Elements, including implementation of Program 3A, which
requires the City to continue to maintain an inventory of sites to meet RHNA. The City’s proposed
amendments implement a schedule of actions contained in the approved Housing Element pursuant to
Government Code section 65583 and do not allow the construction of a distribution center, or oil and
gas infrastructure. Therefore, the proposed amendments are statutorily exempt from CEQA pursuant to
Public Resources Code section 21080.085(a).
ALTERNATIVES:
The City Council has the following alternatives:
1. Approval with modifications. The City Council may approve with modifications to the proposed
amendments the City of Costa Mesa Sixth Cycle (2021-2029) Housing Element of the City’s
General Plan to add two Housing Element Opportunity Sites provided that the revisions are
internally consistent and consistent with the General Plan and State law.
2. Continue the Resolution review to a date certain. The City Council may continue the item to
a date certain with direction for staff to return with additional information, changes, and/or
clarifications for City Council consideration.
FISCAL REVIEW:
There are no fiscal impacts associated with this action; contingency budget approved for the Housing
Element rezoning program will be allocated to updating the Housing Element to identify adequate
sites within HCD’s 180-day requirement. Funding for Housing Element Rezoning Program is available
in the Housing Authority Fund (Fund 222). The project has a budget of $2.4 million, of which $500,000
is available in the project balance at the time of the City Council hearing date.
LEGAL REVIEW:
The proposed Resolution, draft General Plan Amendment, and report have been prepared in
conjunction with and review by the City Attorney’s Office.
PUBLIC NOTICE:
Pursuant to California Government Code section 65854 (amended by Assembly Bill 2904 in 2025) public
notification for amending the Housing Element of the General Plan has been completed no less than 10
days prior to the date of the public hearing:
Item #: Meeting Date: 3/17/2026
Page 8 of 8
1. On-site posting. A public notice was posted at City Hall and on the City’s website on March 6, 2026.
2. Newspaper publication. A public notice was published in the Daily Pilot newspaper on March 6,
2026.
Additionally, information about the meeting and associated actions was posted to the NWWAB
webpage (https://www.costamesaneighborhoods.com) and distributed via email to the project interest
list on February 17, 2026, February 20, 2026, and March 9, 2026. Finally, as noted in the background
section, the City sent a letter to Housing Element site property owners in December 2025 regarding
the potential impacts of the New Commune DTLA LLC v. City of Redondo Beach court decision and
since this time have been fielding telephone calls and holding meetings with property owners to
answer questions and further discuss potential concerns. City staff have been in contact with the
property owners that made requests to be added to or removed from the City of Costa Mesa Sixth
Cycle (2021-2029) Housing Element. These property owners have been notified of the public hearing
via telephone, email, and received a hard copy notice of the public hearing in the mail.
Any public comments received for the March 17, 2026 City Council meeting, may be viewed at this
link: CITY OF COSTA MESA - Calendar (legistar.com)
CITY COUNCIL GOALS AND PRIORITIES:
The targeted update to the Housing Element Sites Inventory (Appendix B) will trigger comprehensive
revisions to the Housing Element to support the following City Council Goal:
1. Diversity, stabilize and increase housing to reflect community needs.
CONCLUSION:
Following City Council action on these amendments, staff anticipate initiating a Housing Element
update to increase housing capacity and/or identify additional sites necessary to maintain capacity for
RHNA and 10-20 percent buffer.
Community engagement on the Measure K sites, as part of the NWWAB, is still actively and
concurrently underway. Round 2 community workshops were held in the first week of March and
stakeholder focus group meetings are scheduled for March 19th. City staff is also continuing the
analysis of potential impacts of Measure K property development opportunities on the environment
through the Environmental Impact Report process. Staff will continue to update the Planning
Commission, City Council, and community on project progress through the project website,
www.costamesaneighborhoods.com, emails to the interest list, and study sessions.