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San Diego amends law requiring developers to build low-income units

City’s 2019 inclusionary housing law was amended after the Coastal Commission made recommendations

New housing developments could be affected by San Diego’s new amendments to its inclusionary housing requirements. In the photo a man walks past “The Boulevard” project, which was under construction in North Park in 2019. (John Gibbins/The San Diego Union-Tribune)



JAN. 25, 2022 5 AM PT

The San Diego City Council voted 8-1 Monday to approve changes to the city’s “inclusionary” housing law that requires developers of market-rate housing to build low-income units or pay steep penalties.

The 2019 law requires developers to reserve a certain percentage of units in market-rate housing projects for low-income residents, defined as someone making less than 60 percent of the region’s median income, which is currently $92,700.

The California Coastal Commission recommended some amendments after raising concerns last summer. The coastal commission has to approve the law in order for it to take effect in coastal neighborhoods, which are areas west of Interstate 5.

While most of the changes will affect only coastal neighborhoods, some will affect the entire city, because they will give developers more choices of where to build low-income units if they choose to put the low-income units off-site of their main development.

San Diego would continue to allow the low-income units to be built either within the same community planning area or within a mile of the market-rate project.

However, the proposal eliminates an exception that allows the low-income units to be built farther away if the developer builds 5 percent more units than otherwise required.

Instead, developers would have to build the low-income units within a half-mile of mass transit or in areas targeted for new housing development by the California Tax Credit Allocation Committee.

In addition, the community planning area where the low-income units would be built would need to have less than 5 percent of its housing units be government subsidized.

These citywide changes were included to expand and update the policy to best serve the need for affordable housing, said Council President Sean Elo-Rivera during Monday’s meeting.

Council President Pro Tem Monica Montgomery Steppe said these changes are a step in the right direction.

“I think these proposed policies … send a message that we intend to ensure inclusionary housing compliance in areas that have limited or no deed-restricted affordable housing opportunities,” she said.

In coastal areas, the approved amendments to the law mean it will now apply to all projects with five or more units.

In the rest of the city, it applies to all projects with 10 or more units, however, the Coastal Commission requested this change due to the 30-foot coastal zone height limit and the smaller-scale developments that are more common in the area.

Also the amendments will prevent developers in coastal areas from converting old hotels or motels into low-income units, because the Coastal Commission prioritizes the preservation of low-cost lodging near the coast.

Councilmember Dr. Jen Campbell thanked city staff for clarifying the citywide impact of the changes.

“I really believe that this might actually help create more affordable housing,” Campbell added.

Councilmember Chris Cate was the sole “no” vote on Monday, and he declined to comment on it. Cate also voted against the original 2019 inclusionary housing law.

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