By Eric Engelbert
Updated July, 2026
Costa Mesa is one of the most desirable cities in Orange County, and that desirability comes with a housing affordability challenge that the city has been working to address for decades. The state of California has assigned Costa Mesa a Regional Housing Needs Allocation of 11,760 units for the 2021 to 2029 planning cycle, spanning all income levels from very low to above moderate. Meeting that target requires not just new market-rate construction but a deliberate, sustained effort to create and preserve housing for lower-income residents. This blog covers where Costa Mesa has been, what changed in recent years on the policy and regulatory front, what is now in the development pipeline, and what all of it means for buyers and renters in the city.
The Foundation: Affordable Housing Projects Costa Mesa Built Over the Years
Costa Mesa's affordable housing history is built on a series of partnerships between the city, nonprofit developers, and state and federal funding programs. Several of those older projects continue to serve residents today and form the backbone of the city's committed affordable stock.
Civic Center Barrio Housing Corp. partnered with the city on four affordable housing agreements that produced 30 multi-family rental units, funded through Redevelopment Housing set-aside funds and HOME program dollars. Those units carry a 55-year affordability commitment.
Costa Mesa Village was Orange County's first single-resident occupancy (SRO) project, replacing a 96-room hotel with units for tenants earning at or below 50% of Orange County's median income. The project's affordability is preserved in perpetuity with support from the Costa Mesa Redevelopment Agency and the County of Orange.
Habitat for Humanity built 11 homes in Costa Mesa using Redevelopment Housing set-aside funds and HOME funds. Those homes were sold to low-income, first-time buyers at affordable prices and are required to remain affordable for future first-time buyers as well.
St. John's Manor, a 36-unit senior apartment project, was at risk of converting to market-rate when the city stepped in with set-aside and federal HOME funds to rehabilitate the property and extend its affordability covenant for an additional 55 years.
Costa Mesa Family Village used Community Development Block Grant (CDBG) funds to acquire and rehabilitate a 72-unit multi-family rental complex for low-income families, with a 55-year affordability commitment attached.
Recent Additions: The Bungalows and the Motel Conversion
Two more recent projects expanded Costa Mesa's affordable inventory in different ways, one targeting families, the other addressing homelessness and special needs populations directly.
The Bungalows is an 8-unit complex built to house 36 people, developed at a cost of approximately $5 million with contributions from the city, the Chia Family Foundation, and other donors. The project reflects the community partnership model the city has relied on historically, but it also surfaced an ongoing concern: the long-term sustainability of donor-dependent funding for affordable housing at a scale that meaningfully addresses the city's need.
The Motel Conversion Project received approximately $10.7 million from the California Department of Housing and Community Development and partner agencies to convert a local motel into 88 units of permanent supportive housing. The target populations include individuals experiencing homelessness, people with mental health conditions, veterans, and seniors. The city contributed $2 million in local funds, demonstrating a willingness to put city money behind projects that address the most acute end of the housing affordability spectrum.
The Rules Changed: Measure K, the 2024 Ordinance, and What They Mean
Two significant policy shifts have changed how affordable housing gets built in Costa Mesa in recent years.
The first was Measure K, passed by voters in 2022 by a margin of just 22 votes. Measure K exempted housing projects on commercially and industrially zoned land from Measure Y, the 2016 voter approval requirement that had significantly raised the cost and uncertainty of large residential developments. Measure K was passed specifically to bring Costa Mesa into compliance with state housing law, which increasingly restricts cities from using local ballot measures to block housing. The practical effect was to allow large residential projects on commercial and industrial sites to move forward with city council approval rather than requiring a citywide vote. One Metro West at 1683 Sunflower Avenue is the clearest example of that policy in action.
The second shift was the 2024 Affordable Housing Ordinance (Ordinance No. 2024-02), adopted by the city council in August 2024. This ordinance applies to rental developments of 50 or more units and requires developers to either include affordable units at low-income or very low-income rent levels, or pay an in-lieu fee of $10 per square foot of total leasable area into the city's Affordable Housing Trust Fund. The Trust Fund then supports future affordable housing programs and development. This is a meaningful structural change: it embeds an affordable housing contribution into the economics of virtually every large apartment project built in Costa Mesa going forward, rather than relying on voluntary community benefits agreements or one-off negotiations.
What Is in the Pipeline: One Metro West, Bear Street, and the New Construction Wave
The most significant affordable housing contribution coming to Costa Mesa is embedded in the two largest new construction projects currently approved and moving toward groundbreaking.
One Metro West at 1683 Sunflower Avenue received final CEQA approval in May 2026 for 957 apartment homes, of which 106 units are designated affordable for households earning at the very low income level (approximately $34,274 annually) and low income level (approximately $54,840 annually). This is the largest single contribution of new affordable rental inventory in Costa Mesa's recent history, delivered as part of a market-rate project rather than a standalone affordable development. The first residents are expected to move in around 2028.
The Bear Street project at 3150 Bear Street, where Meritage Homes is building 142 for-sale homes on the former Trinity Broadcasting Network campus, includes 7 units designated for very low-income buyers. Demolition of the former campus is complete and construction is expected to begin in 2026, with model homes projected for 2027.
Together these two projects alone will add more than 110 income-restricted units to Costa Mesa's housing stock within the next three years, representing meaningful progress toward the city's RHNA targets while being driven primarily by private development activity rather than public subsidy.
The State Mandate: 11,760 Units and the Pressure Behind Every Approval
California's 6th Cycle Regional Housing Needs Allocation assigned Costa Mesa a requirement to plan for 11,760 new housing units between 2021 and 2029, broken across four income categories: very low, low, moderate, and above moderate. This is not a suggestion. Cities that fail to meet their RHNA allocations face penalties including loss of permitting authority, exposure to builder's remedy projects where developers can bypass local zoning, and loss of state housing funding.
Costa Mesa amended its Housing Element in March 2026, removing several opportunity sites from its inventory and adding others. Under California's No Net Loss law, the city then had 180 days to identify replacement sites to maintain adequate zoning capacity for its full RHNA allocation. That process is ongoing as of mid-2026. The pressure to approve residential projects, including the large mixed-use developments coming to the Sunflower Avenue corridor, is directly connected to the state's allocation math. Cities that approve housing avoid penalties. Cities that do not invite state intervention.
For buyers and residents, this mandate is actually protective of neighborhood quality in a specific way: it requires cities to plan proactively for housing across income levels rather than allowing local opposition to block all new development indefinitely. Costa Mesa's track record of approving projects like One Metro West, Bear Street, and the motel conversion reflects a city working within that framework rather than fighting it.
What This Means for Buyers and Renters in Costa Mesa Today
For renters, the combination of the 2024 Affordable Housing Ordinance and the incoming supply from One Metro West and other large projects means more affordable options are coming online over the next several years. If you or someone you know earns in the very low to low income range for Orange County, monitoring the waitlists and application processes for One Metro West's 106 affordable units as the project approaches its 2028 opening will be worth doing. The city's Affordable Housing Trust Fund will also generate resources for additional programs over time as more large projects pay their in-lieu fees.
For buyers, Costa Mesa remains one of the better-value cities in Orange County for people who want proximity to Newport Beach, strong schools, and coastal access without paying Newport Beach prices. The new construction activity coming to the city over the next three to five years, including for-sale homes at Bear Street and the broader neighborhood improvements tied to One Metro West, tends to support property values in surrounding areas over time. If you are considering buying in Costa Mesa now, you are entering ahead of the most visible phase of that new development story.
Costa Mesa Is Building. Here Is How to Position Yourself.
Whether you are a first-time buyer watching affordable programs, a renter tracking new inventory, or a homeowner curious about what new development means for your neighborhood, understanding Costa Mesa's housing pipeline gives you a clearer picture of where the market is heading. If you have questions about buying or selling in Costa Mesa, I am glad to help.
