Stockstill: Housing Problems in Orange County? It’s Deja Vu All Over Again

The following article by Michael Stockstill was posted by VOICE of OC on July 25, 2023

Housing supply, prices and availability–especially for people of modest means—dominates the news in Orange County and southern California.

But for those of us who have lived here for decades, it’s déjà vu all over again (apologies to Yogi Berra).

Researching and writing my book on the history of planning and development of the Irvine Ranch, I cited examples of how the issue of low-cost housing colored the political atmosphere of Newport Beach and Irvine in the late 1960’s and 1970’s.  I titled the chapter on the subject with the words of former Irvine Company president Ray Watson, who called low-cost housing “a problem from Day One.”

Watson had personal experience: he grew up surrounded by the working poor at his grandmother’s boarding house in Oakland. So, Watson was sympathetic, but he was also expected to build and price housing developments that would turn a profit. Watson said, “I became convinced early on (with regard) to housing prices the market is the market.” He gave an example from the 1970’s:

“…the Irvine Company, feeling pressure to make homes more affordable, hired two companies to build …in a community called Harbor View Hills…with the requirement that in the end, they had to sell the houses for $35,000 or less on leasehold. They built the houses. The first weekend they sold out, and the following weekend the houses were resold by those who bought them for $10,000 more.”

Newport Beach was nearly built out at the time, but in Irvine there were thousands of acres of open land waiting to be developed. The first homes built in University Park were relatively affordable—one reason being at the time the community was relatively isolated–there were almost no services like grocery stores, pharmacies or retail centers nearby. Also, the homes were unusual for southern California, attached and intertwined with greenbelts. That made some buyers wary, impacting sales.

As Irvine grew and became a city, development ramped up. But when a new village in what is now central Irvine was proposed to include a substantial amount of housing priced for lower income families, a political furor enveloped the new city council, and the project was killed. Writing in Postsuburban California: The Transformation of Orange County Since World War II,” history professor Martin Schiesl blamed the failure both on the fears of neighboring residents about lower income buyers, but also on the natural market forces of supply and demand.

The housing issue simmered for a couple of years after Irvine incorporation in late 1971, then came to a head when a group of residents sued the city to force construction of low-cost housing. Using as leverage the new legal requirement that an Environmental Impact Report (EIR) accompany significant new development, the residents targeted the giant Irvine Industrial Complex-East (IIC-East) with a suit.

Both the city and Irvine Company badly wanted the tax revenues and profits from the IIC-East and fought back in court. In the end, a compromise was reached: the Irvine Company agreed to build moderately priced units—the vast majority in apartment complexes—in future developments. This approach was modified in recent years, with the city council extracting small parcels of land from the Irvine Company in exchange for development rights elsewhere.

The city created the Irvine Land Trust to shepherd those parcels into low-cost rentals and homes. During my two years I was on the board of the Land Trust, we did just that, building hundreds of rental units and more than two hundred ownership units that were sold at large discounts to the market.

Currently in Irvine, and in communities all over Orange County, a revolution in development is taking place, with high density rentals and condominiums being constructed on relatively small, previously orphaned properties. Coming close behind is the strategy of clearing all or large sections of faded retail malls and redeveloping the property into new homes.

It is a good bet that as Orange County continues to grow, more and more homes will be smaller, grouped together in greater densities, and increasingly located in or near the urban cores of the county.

Michael Stockstill is the co-author of Transforming the Irvine Ranch: Joan Irvine William Pereira Ray Watson and THE BIG PLAN. He served on the board of the Irvine Land Trust 2020-2022. He is retired and has lived in Orange County for 51 years.  The book is available on Amazon and from the publisher, Routledge. (His wife sits on the Voice of OC Board of Directors).