Council OKs condo rentals

Getting more people on the Westside to buy homes instead of renting has been a top priority for city officials, but they have experienced a setback in achieving that goal.

The Costa Mesa City Council voted unanimously Tuesday to allow a developer planning to build 151 condominiums to rent them instead of selling them, departing from an initial agreement between the city and the developer requiring the units to be owner-occupied.

Nexus Development Corporation, which already owns the parcel of Westside land on which the company plans to build the condos, pleaded with the council that it could not possibly finance the project if it were forced to sell the units because of the housing slump.

“The problem with having some sort of restriction is that you can’t get financing,” said Cory Alder, the president of Nexus. “There are different types of lenders. There are lenders for rental projects and lenders for condominium projects. Lenders for condominium projects are not in the market today.”

Nexus executives would prefer to make the units condos, according to Alder, and they will look to make the conversion as soon as the market allows it. But under the city’s new agreement the developer could leave the units as rentals for as long as the company wants.

All five council members vocally advocated for the development to be owner-occupied, but a few said they were swayed to allow the developer an exception because of the company’s good reputation in other cities and the quality of the project it proposed.

“I have liked this project from the beginning and I still like it,” Mayor Pro Tem Allan Mansoor said. “My concern was with for-sale versus rental and — I’ll just come out and say it — I would much rather have for-sale, as I think a lot of us would.”

More than a dozen Westside business owners and residents came to speak in favor of giving the developer the freedom to put up a rental complex, but most echoed the council’s preference for owner-occupied condominiums. The main concern with rentals was the density and parking problems that they might cause in an already crowded neighborhood, but advocates of the complex overwhelmingly touted the developer’s “high quality” plan, saying that it would give the area a much-needed face lift.

“The huge problem on the Westside is overcrowding. We’ve got too many rentals, and we’ve got too many people living in those rentals,” said Roger MacGregor, the founder of MacGregor Yacht Corporation, which owns the 5 acres immediately east of the proposed project.

MacGregor said he would rather have the developer wait out the housing slump and then put up owner-occupied condominiums, but he was not unhappy with the council’s ruling because he thinks the project has great potential.

ALAN BLANK may be reached at (714) 966-4623 or at [email protected].