Reading Voice of San Diego’s recent article on housing in Encinitas, one is left with the distinct impression that local developers are doing their best to push through affordable housing, but Encinitas City Council members and residents are fighting every step of the way.

lettertoeditorQuoting a representative of a local housing advocacy group about the importance of the density bonus law, the article claims that both City Council members and residents want to make the law impossible to use in Encinitas.

But the reality is not nearly so stark.

It is, of course, hard to quarrel with the premise of affordable housing. In a state and a county where housing costs consume a substantial portion of a household’s income, affordability is an important factor. But blaming the high cost of housing on residents who advocate for protections of their community and the environment is like blaming the customers who insist on a clean supermarket for the high cost of food – sure, there’s a relationship, but there are several other economic factors at play.

The state’s density bonus law allows private developers to build more homes on a property than city restrictions allow if they agree to build some low-income units. But the sad truth about the law is that it’s not really a vehicle that ensures what most of us would consider to be affordable housing. For one thing, the calculation of affordability is based on the median income in the immediate area, so when a project is proposed in a wealthy area, the affordable unit is suddenly not affordable the way most of us would think.

And to make matters worse, the law does not require leaving existing affordable units on the project site, so a project can be built that actually ends up reducing the amount of affordable housing.

We Stand Up for You. Will You Stand Up for Us?

The hard-fought battle over the high-density Desert Rose project in Encinitas proved that point. The project site is located in rural Olivenhain, accessed by a winding series of roads, and is bordered on two sides by open space with a creek running through it. The developer used the density-bonus law to double density by agreeing to build just one affordable unit, but since the site is located adjacent to Rancho Santa Fe, the so-called affordability of that one unit will not be something most lower-income earners can afford. Plus, the project will remove the existing affordable units on site that are associated with  existing on-site horse stables.

It should therefore come as no surprise that so many people in Encinitas have expressed concern about this and other proposed projects that appear to be more about lining developers’ pockets than improving people’s lives.

Our society can and should do more to ensure adequate housing for all income levels. And while the density-bonus law may have a good premise, its execution leaves much to be desired – it’s like telling someone they can drive twice the speed limit as long as they transport one lower-income rider. Sure, we want to ensure all income levels have adequate opportunities, but there are better ways to achieve these goals.

Everett DeLano is a partner with the Escondido law firm DeLano & DeLano. His commentary has been edited for style and clarity. See anything in there we should fact check? Tell us what to check out here.

    This article relates to: Housing, Opinion

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    Founder subscriber

    One major concept that should be considered is that if Developers get to increase their profits (from building additional units due to getting a Density Bonus), then it is only right to require them to set aside more than just a token amount of all the new units as long term rent restricted Low and Low-Moderate units, (especially where this development is located along our transit corridors) so they do their part to help our City grow in a responsible way, instead of just profiting from adding as many units as they can.

    We should be providing long term rent restricted Low and Low-Moderate units which will help insure that those at the lower end of the income scale (like for those just starting out and Seniors living on fixed incomes) can find affordable housing.

    What we should NOT be doing, is to be building Market rate housing and allowing Developers to game the system by calling it "affordable" housing so that they can then get a Bonus of being able to build additional units for doing it.

    The solution would be to require a certain percentage of all the units built (in all sizes) to be long term rent restricted Low and Low-Moderate units, that way the area will get some desperately need housing and the Developers will be doing their part instead of just making a killing on the project.

    To the Developers that say that will not pencil out for them, I suggest they take a look at what has been built in Mid-City.

    I predict that all these units will be in such demand that Developers should be required to hold a lottery to insure that they are not given out to friends who will then use them for AirBNB or any other purpose other than what they were built for, providing long term housing for those at the lower end of the economic scale.

    bgetzel subscriber

    @Founder What you are sugesting is exactly how the density bonus program is supposed to work, and does all over California. Cities impliment it by passing local ordinances that govern the program. The local ordinance usually specifies what percentage of units must be deed restricted to provide low income housing (below 80% of median income, or even lower). Mr. DeLano is wrong in saying that the median income index for the program is that of the local area (Ranch Santa Fe?). The index is that of the entire county! In addition, the local jurisdiction that grants the bonus is supposed to set-up an infrastructure to monitor that those apartments are actually rented to households with the income level proscribed in the program. In San Diego, the program has been successfully implimented in Eastlake, Otay Mesa, Black Mountain Ranch downtown San Diego, and  many other areas. By passing a local implimentation ordinance, the City can assure that the program operates how it supposed to. Encinitas never bothered to pass such an ordinance because it was not willing to facilitate "those people" living there. Interestingly, besides showing a lack of understanding of the density bonus program, Mr. DeLano did not offer one example of a project that is "abusing" it.

    Founder subscriber

    @bgetzel — Thanks for your reply, I just want to get the conversation to include the all important "RATIO" so that everyone knows what is being promoted when we are all asked to accept additional Density, since as it is now the system can and is being gamed by developers.

    Back when we had Redevelopment Project Area Committees (PAC), the different PAC's could help fund and even specify what new projects got built since all the Developers wanted access to the "low" cost funding, but when the State killed that program, the Cities simply took them over and shifted the moneys to their own uses which was never supposed to happen.  I is like voting for a bond that improve our schools only to learn that the money was spent on building ivory towers for administrators that want ever larger fiefdoms.

    You might like the discussion here:

    For Infrastructure Measure to Work, It Must Address Affordable Housing

    Toasterific subscriber

    @bgetzel @Founder Are you saying the median income used for calculation is approximately $66k, which is SD County's median, and not Encinitas' $90k median? Regardless, none of the "affordable" units recently built or future planned for a majority of the developments will be purchasable by someone making less than $72k, not to mention $52k (80% of medians). Selling one home for $500k (a generous and unlikely concession) in a neighborhood of nine other $1 million + homes does not a heterogeneous society make. If you visit the sites, you'll see for yourself.

    Also, assuming that our motivation in Encinitas is only to to prevent "those people" from living here is half insulting and 100% ignorant. In fact, the mcmansionization that these out-of-town developers are bringing to Encinitas is razing more modest structures, consequently decreasing diversity of neighborhoods. Where once were modest duplex rentals are now mcmansions. Guess what demographic lives in mcmansions in Encinitas? Hint, it's not "those people."

    Founder subscriber

    @Toasterific @bgetzel All the more reason to get the word out so that residents of these communities are not "surprised" when they find out that Developers (and those that regulate them) are not building the housing that so many need.  Even without the labels "those people" really refer to all those that can't afford to plunk down enormous amounts of money that is now needed to buy a home. This "poor" group includes now just about everybody that is starting a career, getting out of the military, or does not "rich" parents.

    Unless localities are required to set aside a certain number of long term rent restricted units, (ideally of all sizes of units built), then what we will be left with is ever higher priced homes.  Compounding this affordability problem for all the potential first time "local" home buyers is that the value of the US$ also going down which only adds to homes "cost".

    One thing that needs to be done immediately is to insure that Developers are not gaming the current system to get permission to build additional units under the guise of building "affordable" units when in fact they are profiting from just building more units to sell, which does almost nothing to make new housing cost less.

    I think of this as "Affordability Bait & Switch".

    bgetzel subscriber

    @Toasterific @bgetzel @Founder If the City of Encinitas was interested in stopping developers from "gaming the system", they could. The state debsity law merely sets the minimum affordability. Cities could pass an ordinance that makes it more restrictive. For example, instead of having a for-sale housing affordability threhold of 110%, they could set it at 80%. That would make the home sell at about $300,000, instead of $500,000. The home would be deed restricted to assure that it is always occupied by an 80% AMI household, and they can assign a staff person to check that such is enforced by a title company, should the home be resold. These things are being done by cities allover the state. It is not that difficult!

    bgetzel subscriber

    @Founder The point I was trying to make is that the "gaming" is preventable if the city involved would bother to set the rules and have a staff to check that they are being followed. It really is not that much work, especially in small to medium size cities.

    Founder subscriber

    @bgetzel Yes, I agree, the problems is that our elected Officials are not doing their jobs, they are instead making it easy for Big Developers to game the system, while at the same time these same Officials are telling voters that they are doing the best they can.