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San Diego Mayor Plans Veto of Affordable-Housing Measure

Bid to Raise Builder Fees, Lower Income Threshold May Go Back to Council

Article by: Co Star | Lou Hirsh | September 18, 2019

San Diego’s mayor plans to veto a measure recently passed by city council to boost in-lieu fees and the proportion of affordable units built into new apartment projects, marking the latest struggle in efforts to tackle chronic housing affordability problems in the nation’s eighth-largest city.

By a 5-4 vote, San Diego City Council in late July passed a measure that calls for apartment developers to make at least 10% of units in a project affordable to local households making 50% or less of the San Diego region’s annual median income of $86,300. That's a change from the current household income threshold of 65% of the regional median income.

The measure also phases in, over a three-year-period, a near doubling of the current "in-lieu" fee paid by developers who opt not to provide the minimum affordable units, to $22 a square foot from the current $12 per square foot.

Mayor Kevin Faulconer now plans to veto the measure and the council, which would need six votes to override a veto, is unlikely to have the votes necessarily to override that decision.

A veto would send the matter back to council for revisions less objectionable to opponents of the latest measure, which included the local building industry. On the issue of fees, local building industry officials had supported a compromise fee of $18 rather the $22 passed in the current measure.

"Mayor Faulconer will veto this legislation as most economists and builders agree it will have the unintended consequence of leading to less affordable housing, not more," Gustavo Portela, a spokesperson for the mayor, said in a statement.

"It is unfortunate that a final compromise couldn’t be reached given the opposing sides were close to an agreement, but the Mayor remains committed to working with the City Council to enact housing reforms that will increase supply, boost affordability and promote smart growth," he continued.

The San Diego measure is among the latest examples – at the state and local level – of new laws and proposals attempting to deal with a severe shortage of affordable rental and for-sale housing in California as prices have been rising and the state grapples with the highest number of homeless people in the nation.

Based on chronic under-building over the past several years, the San Diego Housing Commission estimates that San Diego is already on pace to come up short by at least 50,000 units relative to demand by 2020, and that shortfall could more than triple by 2028.

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