Halfway through the state's sixth-cycle housing window, Laguna Beach has technically made room for hundreds of new homes. The catch is that most of that capacity is for market-rate units, not the deeply affordable housing Sacramento expects to see. A new housing-element progress report shows above-moderate construction far outpacing production for very-low, low, and moderate incomes.
The state target and the shortfall
The Regional Housing Needs Assessment assigned Laguna Beach to accommodate 394 homes in the sixth cycle (2021 to 2029), with 277 of those intended for very-low, low, and moderate-income households. According to SCAG, that breaks down to 118 very-low, 80 low, and 79 moderate-income units.
Market-rate building outpaces affordability
City staff told the council that this cycle, the city has planned for roughly 440 above-moderate, or market-rate, units and already issued building permits for about 100 of those in 2025. Of the 440 market-rate units, 246 have passed final inspections and are ready for residents to move in. Accessory dwelling units accounted for 85 of last year's permits, and staff issued entitlements for 62 new units. As reported by the Los Angeles Times, most of the recent production has arrived without city incentives because market-rate projects can line up their own financing.
Church project could add some affordable units, if funding comes through
One of the few sites the city has formally identified for affordable housing is the Neighborhood Congregational Church, where a scaled-down proposal now anticipates 29 affordability-restricted homes plus a manager unit. Related California submitted an application in December, and the city is expediting its review. Project leaders say a fully affordable version depends on public funding and tax-credit awards, and the reduced plan reflects that financial reality. "The city is not required to build the housing units," Community Development Director Anthony Viera told the Los Angeles Times.
Why deep affordability is so hard to build here
The city's own planning documents acknowledge that physical constraints such as steep hills, narrow streets, and a limited supply of developable land, combined with neighborhood concerns, make larger affordable projects tough to deliver in Laguna Beach. The Housing and Human Services Committee work plan and the Housing Element focus on strategies like promoting ADUs, identifying more potential sites (including through outreach to religious institutions), and pursuing permanent funding streams such as a local housing trust to expand affordability. As outlined in the city’s work plan and Housing Element documents, those programs are the main tools local leaders are counting on to close the gap.
Officials say they will keep rolling out those programs and will continue to prioritize review of any affordable proposals that show up. Without more public funding or a larger committed project, however, the distance between the city's brisk market-rate production and the state's affordable targets is likely to persist. The sixth RHNA cycle runs through 2029, which gives Laguna Beach more time to line up additional sites and financing, but the city will need both money and actual projects to hit its numbers.
