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Areas of Consensus Emerge Among the Crush of Housing Plans

Mayor Kevin Faulconer [1] and several City Council members have released plans [2] or memos [3] this year laying out policies they think could speed much-needed housing development in the city.

City Council members David Alvarez, Chris Cate, Georgette Gómez, Scott Sherman and Chris Ward all issued memos in January calling for a broad array of policy changes, and Faulconer in June detailed a series of reforms [4] to address San Diego’s housing shortage. Gómez released a more detailed action plan last month.

Democrats and Republicans agree the region is facing an epic crisis of both housing supply and affordability – and that they must pursue development incentives and regulatory reforms to address it.

That doesn’t guarantee swift overhauls. City leaders will likely face opposition from residents and interest groups and at least some bureaucratic red tape. There also isn’t wholesale agreement on the best path forward.

But among the housing reform plans put forward so far, there is some significant agreement that could open the door to actual policy changes.

Set housing production goals.

For many city leaders and advocates, it’s a simple concept: You can’t measure progress if you don’t set goals.

In their memos, Council members called on the city to annually report progress on housing production, compare that progress with needed housing supply in the city and set goals accordingly. Faulconer’s plan committed to an annual report measuring the existing housing supply for middle-class and affordable housing, the number of units the city’s signed off on building, the city’s rental vacancy rate and more.

Work is already under way on this.

City Councilman Scott Sherman, who leads the City Council’s land use subcommittee, said his committee will soon review a consultant’s report suggesting neighborhood-by-neighborhood goals for housing development. The discussion’s tentatively scheduled for Sept. 21.

Jack Straw, the mayor’s point person on land use issues, noted the city’s long gotten a sense of the gap between needs and reality through a state-mandated report known as the Regional Housing Needs Assessment [5]. The report does provide city-by-city numbers.

But it only comes out every eight years. That makes it a less effective accountability tool.

“The value in an inventory report is keeping it at the forefront of the discussion,” Straw said.

Incentivize development near transit.

If people live and work near transit options, the conventional wisdom is that they’ll be able to drive less, reducing greenhouse gas emissions that contribute to climate change in the process.

City officials have long seemed to unanimously agree on the need for more development in transit corridors for that reason. But when it comes to actually making it happen on specific projects, they’ve backed down [6] under pressure. Now that goal is a consistent tenant in city policymakers’ reform proposals thanks to the city’s Climate Action Plan, which commits the city to that approach [7].

There are differing proposals on how to execute this.

Gómez wants the city to propose state legislation to give affordable housing developers building in transit areas more flexibility on unit size. She believes it’d give developers more of a financial incentive to build smaller, more affordable units.

A Gómez spokesman said the councilwoman expects a City Council committee to consider her proposal this fall.

Other City Council members suggested more general reforms, such as reduced development fees and process approvals for projects in transit areas.

Faulconer’s team is already working on some overhauls.

His plan weaves the focus on new development in transit areas [7] into incentive programs meant to encourage more middle-income housing and affordable housing developments [1]. Projects in areas close to transit would be eligible for more incentives, including speedier development permit processing. The expansion of an existing affordable housing development program meant to shorten processing time and limit development costs for projects with affordable housing units is expected to go into effect in much of the city shortly after the City Council takes a second vote on the matter in coming weeks. That expansion specifically calls out projects near transit.

Faulconer’s team is still working out the details on the middle-income housing plan but hopes to bring it to the City Council in winter 2019.

Straw said the mayor’s open to other policy proposals.

“If it generally falls within the approach we’ve outlined here, we’re open to considering it,” Straw said.

Sherman said he’s started looking more seriously at transit-area development incentives that he could bring to the committee now that an initial slate of reforms pushed by Faulconer has moved forward.

But City Councilman David Alvarez, vice chair of the committee and a key Sherman ally on housing reforms [8], said he’s not satisfied with the pace of transit-related reforms. He’d like to see Council members pursue a more aggressive timeline on policies to incentivize development near areas with transit options.

“I think we are waiting for the [Faulconer] administration to bring things forward,” Alvarez said.

Reduce parking requirements, especially near transit.

When developers pursue projects, they’re required to include a certain number of parking spots per unit – and that can add significant costs [9].

There’s consensus that those requirements need to change.

“I think everybody agrees that the parking issue is something that gets in the way of development,” Sherman said. “Now what we’ve got to do is come to an agreement on what those requirements should be.”

Republicans’ plans focus most on the need for parking requirement reforms in transit areas.

Faulconer has directed the city to move forward on proposing new parking standards within transit areas. Straw said the city’s set to have a consultant on board by October to study options, allowing for that study to be released this winter.

Sherman said he hopes the committee can discuss parking standards by the end of the year.

Democrats may push for broader discussions.

Alvarez, Gómez and City Councilman Chris Ward each brought up the possibility of reduced parking requirements or workarounds on a broader array of projects in their plans.

For example, Ward said, the city might consider alternatives such as tandem parking or car-sharing programs.

Make it easier to build granny flats.

Granny flats – smaller units often set in backyards [10] – have long served as more affordable rental options for residents in some of San Diego’s older neighborhoods, and city leaders have agreed it needs to be easier to build them throughout the city.

passed last year required some easing of the rules, and the City Council voted 8-1 last month [11] to loosen a handful of requirements for granny flats, including specialized height restrictions and setback requirements.

But Council members say they’re not finished.

Alvarez and Sherman have voiced concerns about granny flat permitting and development costs that can average more than $20,000 [12].

Gómez proposed that the city consider a two-year pilot program [2] setting a $2,000 cap on permitting and development impact fees for new granny flats, sometimes known as companion units.

At the City Council’s request, city staffers are beginning to take a more holistic look at development fees, and last month promised to give the Council more details on granny flat fees and possible adjustments in September.