Where the Affordable Housing Fee Is Headed Now

Affordable Housing Fee

Where the Affordable Housing Fee Is Headed Now

The City Council voted Tuesday to undo its decision to increase the fee it charges commercial developers to pay for subsidized housing. Here’s what the conversation might look like when it’s reconvened.

So much for increasing the development fee San Diego charges to help pay for subsidized housing.

The City Council increased the fee last fall. Business groups led by the Chamber of Commerce gathered enough signatures to challenge it with a public vote. Facing that prospect, the Council sidestepped a costly public vote and undid its decision. We’re back where we started.

The Council members who supported the increase said Tuesday they’d bring the issue back to committee in three months to continue conversations over how to address the city’s needs for low-income housing.

(If that sounds familiar, you’re on top of it: The Council voted down a smaller increase in 2011 but created a task force to come up with alternatives. A Council committee held a meeting on those alternatives a few months later, but the issue died down until it was revived last year).

But what might a reconvened conversation for an Affordable Housing Grand Bargain look like three months from now?

For one, there are some legal restrictions on just what actions the Council can take after voting to rescind a decision that was challenged by petition.

Basically, it can’t just pass a version of the same increase with some cosmetic changes. It could pass a much smaller increase, or draw out the implementation schedule or add in some new exemptions. It needs to be substantially different.

And a spokesperson for the group opposing the fee hike — which would have brought the rate charged on commercial development to 1.5 percent of current construction costs, more than a five-fold increase for some types of building — said a smaller increase wouldn’t be off the table.

A day before the Council’s November vote, opponents said they could live with a smaller increase that provided exemptions for a number of building types, among other items that weakened the fee.

That proposal could serve as a basis for renewed discussion, though fee proponents have long said that option wasn’t realistic because of all the stipulations it comes with.

The Council and members of the real estate and building industries could also discuss ways to decrease the costs of housing by making it cheaper and easier to build. Proposals to do so featured prominently Mayor Kevin Faulconer’s proposed plans during his campaign.

That could mean reducing the amount of parking required of new projects — which Faulconer specifically said should be done near transit options —or by other means, such as letting more developers wait to pay other fees until final inspection, rather than earlier in the building process.

It’s also possible the issue will disappear, as it did after the Council voted it down in 2011. But Council President Todd Gloria, who’s been an outspoken advocate of the fee hike, said in no uncertain terms that wouldn’t happen.

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