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Long Beach housing outlook for 2023 likely a mixed bag, officials say

By Alicia Robinson, Long Beach Post

Long Beach officials have promised a focused effort to address a housing shortage that’s exacerbated the homeless crisis, but forces beyond the city’s control—such as higher interest rates that could chill development—make 2023 likely to be what Development Services Director Christopher Koontz called “a year of contrasts.”

A number of high-profile projects will get started or come online this year in Long Beach, such as the former Broadway Block (now called Onni East Village), opening this summer with 432 apartments plus space for businesses such as a grocery store and coffee shop on the lower floors, and the 756-unit West Gateway, which will turn the World Trade Center parking lot into a construction site in coming months.

Four developments of apartments for lower-income families, with a total of more than 300 units, are slated to open this year, and the city just awarded $6.1 million in funding for two new affordable projects.

And the city Planning Commission recently approved a landmark development that will create 900 new apartments. Planning Bureau Manager Alison Spindler-Ruiz said Mosaic, as the project is called, is “the largest housing project, certainly, that I’ve seen in my tenure,” and would add almost as many units as there were housing starts citywide last year.

That’s all good news, but it won’t make up for the housing shortage Long Beach and California as a whole have been experiencing for years.

According to city data, 2019 was a record-breaking year with more than 1,200 building permits issued, and the next two years also hovered around the 1,000 mark—but those came after several rather anemic years, with 300 or fewer permits issued in 2014, 2015 and 2018. (Complete 2022 data is not yet available, city officials said.)

And now, as part of a state-mandated housing planning process, the city is also expected to figure out where to put a total of 26,500 new homes by 2029.

In the state’s last eight-year cycle, Long Beach had to plan for about 7,000 new units, Spindler-Ruiz said—and the city only saw about 60% of that total get built.

Koontz said despite the demand for new homes, interest rates that are “wildly different” from a few years ago and other factors outside the city’s control, such as a shortage of construction workers, could slow the production of new homes this year.

Gary Painter, a professor at USC’s Sol Price School of Public Policy, agreed that at least for the immediate future, developers will likely be cautiously waiting to see which potential projects will pencil out.

“I think on net, whenever there is a shock in the economy—in this case interest rates—builders, sellers, buyers all tend to pause, and we know pausing is not good for our housing market,” Painter said.

However, he said, “I think by the second half of the year, things will start moving again.”

While the need for more housing is widely acknowledged, some in Long Beach will be keeping a close eye on the details—especially where it’s proposed.

The city’s “inclusionary” requirement—which mandates that developers make up to 11% of units they build affordable for lower-income families or pay into a city fund—will help, but the city needs more homes at lower price points and higher-density projects should be spread around the city, Downtown Long Beach Alliance CEO Austin Metoyer said.

“I think that has been the philosophy of the city historically, that everything can go Downtown—and I don’t think that can continue to be the philosophy,” he said.

Metoyer said he’d like to see the city speed up the approval process for converting vacant commercial and office space to other uses, including residential use.

More housing is vital, but city leaders need to consider whether projects will displace residents who won’t be able to afford the higher rents in new developments, said Elsa Tung, land use program manager for Long Beach Forward. (The nonprofit is one of several consultants working with Long Beach on rezoning the city core.)

In a city where more than 61% of residents are renters, any measures the city approves to encourage more development should be paired with tenant protections—such as rent control—to help reduce displacement, Tung said.

“We cannot build our way out of the housing crisis—we’re not building enough, we’re not building fast enough,” she said.

Here are some of the housing highlights of the coming year:

Opening in 2023
  • Onni East Village: A two-building complex (one high-rise, one mid-rise) will add 432 apartments, including a small number of furnished units for shorter-term stays.
  • Anaheim and Walnut: This 4-story development will include 88 affordable units above office space and a health clinic.
  • Seventh and Dawson: About 23 for-sale townhomes with two-car garages, rooftop decks and balconies should be available by year’s end.
Making progress
  • SilverSands: A hotel and condos at Ocean Boulevard and Cherry Avenue is finally moving forward on a site that’s been vacant since about 2014.
  • Third + Pacific: After the project was stalled for changes, a multi-building complex will begin rising out of the ground this year, bringing 271 apartments and nearly 13,000 square feet of retail space.
  • RTHM: A project with 84 for-sale townhomes is also slated to include retail space with a sit-down restaurant.
  • 26 Point 2: This project consists of 76 units of housing with supportive services for people experiencing or at risk of homelessness.
Also of note
  • Armory Arts Collective: A 64-unit affordable complex is planned next to a former armory on Seventh Street that will be converted to an arts-focused facility with performance space.
  • Mosaic: A 900-unit development that won Planning Commission approval in January will be built at the northwest corner of Fourth Street and Long Beach Boulevard.
  • ADUs: Second units (or granny flats) made up more than 50% of the city’s housing starts last year, and with preapproved plans coming that will speed up the process, the city could log as many as 600 ADUs this year.

Original Source: https://lbpost.com/news/long-beach-housing-outlook-for-2023-likely-a-mixed-bag-officials-say

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