COSTA MESA, Calif. — Wearing a Santa Claus hat in front of a small crowd of stakeholders, Costa Mesa Mayor John Stephens struck a cheerful chord, even as he cautioned of the challenging task ahead.

What You Need To Know

  • Local politicians and nonprofit leaders celebrated the opening of the Bungalows, eight affordable housing units in Costa Mesa

  • The project had a price tag of about $5 million and will house 36 people and provide wraparound services similar to social services support

  • The project required financial contributions of more than half a dozen donors and stakeholders

  • Costa Mesa passed Measure K in the Nov. 8 election by 22 votes relieving some of the challenges that had existed to building affordable housing

He was talking about homelessness at a Thursday ribbon cutting, and the city’s uphill battle in creating enough affordable housing for people without a place of their own or at risk of finding themselves out in the cold. Stephens made his brief address in front of politicians and nonprofit leaders to celebrate the opening of eight units called the Bungalows.

“We have a serious problem in our community,” he said. “We have 30 people waiting to get into our homeless shelter.”

Past legislation has made the task of housing low-income residents harder.

Measure Y, passed in 2016, increased the cost and time of development as it required neighborhood approval for projects. Measure K, passed in the Nov. 8 election by just 22 votes, eases development requirements and puts the city back on a path to meeting state affordable housing quotas.

But that doesn’t mean affordable housing projects will spring up any faster.

The biggest problem is money. The city received millions in federal support from the American Rescue Plan. With that money set to expire next year, the city will find other uses for it than just affordable housing, shifting it over to homelessness outreach and other needs.

The city has other money it can throw toward the cause, including roughly $4 million from loan repayments initially issued by the now dissolved Costa Mesa redevelopment agency. 

“Once those two sources are gone, that’s it,” said Nate Robbins, a neighborhood improvement manager for the city of Costa Mesa. “The only recurring money we have is about $500,000 in HUD [U.S. Department of Housing and Urban Development] money.”

Affordable housing has become a steep expense for local cities. The Bungalow, just a few units, had a price tag of approximately $5 million. That would take years for the city to bankroll alone, necessitating the accumulation of partners. The project, stewarded by affordable housing nonprofit Families Forward, required numerous sources of money. Costa Mesa provided about $900,000, while the Chia Family Foundation chipped in $2.2 million for the units.

While some partners may contribute funding to future projects, it’s not a sure thing.

“There is no recurring stream of funds for these projects,” Robbins said. “I can’t even tell you what we’ll have in six months, let alone 10 years.”

And the city doesn’t have nearly enough units, Stephens said. How much housing it will need is a moving target, and Stephens said the city hasn’t done an internal review to narrow in on a hard number.

But homelessness remains a serious constituent concern, even as homeless shelters and other infrastructure designed to help people on the streets continue to be controversial.

But with renewed political will provided by Measure K, Stephens was resolute about pushing for more units that the needy can afford.

“We have to do it, over and over and over again, so that everyone is warm and safe and dry in Costa Mesa,” he said.