San Diego’s New Park Proposal Is Really an Affordable Housing Incentive
The city’s proposed update to its parks master plan offers discounts to apartment projects built for low or median-income renters or owners, and if developers include a park on the property.
San Diego finally has a solution on the table to make the city’s saddest parks less so and also tempt developers into building affordable housing next to public transit.
The city would do that by overhauling how it charges developers to fund parks, libraries and roads, called development impact fees, as part of a new parks master plan. Right now, newer areas of town with more developable land often generate more parks fee money than the older, built-out areas of San Diego.
But the proposed park fee overhaul is also being used as a tool to lure developers into building more housing near bus and trolley stops. The plan offers discounts to apartment projects built for low or median-income renters or owners, and if developers include a park on the property.
The plan also funnels a big chunk of all the new park fee money generated across town in the first five years of the plan to lower-income and historically underserved neighborhoods first.
“This is a gigantic first step toward bold equity policies that say very clearly where the needs and priorities are,” said Heidi Vonblum, the city’s deputy director of environmental policy and public spaces.
Under the current system, the city’s 50-plus neighborhoods collect fees from developers building within their borders. Each neighborhood charges something different, based on a calculation of the cost of its desired improvements divided by the amount of development it expects. But that math led to generally poorer, older built-out neighborhoods charging and collecting much less than richer, newer ones where there’s more development.
Right now fee rates are all over the place, with neighborhoods charging anywhere from $0 to $30,000 per unit, said Vonblum said.
Barrio Logan, one of the oldest neighborhoods in the city, collected just $11,022 in developer fees between July 1, 2019, and June 30, 2020, according to a city study. But sprawling Rancho Peñasquitos in the northeastern corner of the city (a neighborhood that abuts the 2,352-acre Black Mountain Open Space Park) collected $6.3 million in that same time period.
Under the new plan, the city would swap out all the individual, neighborhood-based fees for a single fee structure under which developers can be charged for each housing unit built. For instance, according to a resolution approved June 17 by the Parks and Recreation Board, a developer would pay $8,799 for each small apartment (less than 500 square feet) it builds. If a developer wants to build a 2,500 square foot single-family home, the park fees are $17,989 and some change.
The city also built an incentive ladder into the fees, hoping developers will opt to build more affordable housing near public transit. That’s in step with a big change to the city’s development rules passed in November under former Mayor Kevin Faulconer’s Complete Communities plan.
Developers get a 50 percent discount on park fees if they build housing reserved for the poorest San Diegans, which is an apartment renting for $1,500 or a home priced under $225,000. Home builders get a 45 percent discount if they build housing for median-income residents, currently $63,400 a year for a family of four.
They get discounts for building in a “transit priority area” (any area within a half mile of a bus stop) as well – a 25 percent discount. So instead of paying the city $8,799 in park fees for each new housing unit under 500 square feet, they’d pay $6,599.
Vonblum said about 32 percent of the city is a transit priority area. Even with all the discounts and the most lavish park fees disappearing under the new plan, Vonblum said the city estimates the new plan will generate revenue for parks.
“A lot of areas that will see the biggest decrease in park fees are where we largely don’t see significant amounts of growth,” Vonblum said.
Vonblum said the city projects only 10 percent of residential growth over the next 30 years to fall in neighborhoods with lots of undeveloped land called. These neighborhoods, like Scripps Miramar Ranch or North University City, also happen to have much higher developer fees. The city expects most future development in the urban core, but that’s where development fees are currently lower.
So the idea is to even out the rates developers pay, thereby raising revenue by boosting fees in areas where more people want to live.
Matt Adams, vice president of the Building Industry Association, said in an email that park fees are among the highest developers pay for new home construction; that they “impede the ability to provide more affordably-priced housing.”
“The new proposal provides some flexibility and incentives for on-site amenities,” Adams wrote. “If we are serious about reining in escalating housing costs, reforms like this are essential.”
There’s another big equity measure built into the new fee structure.
For the first five years of the plan, 50 percent of developer money collected for parks would be spent in what are known in the policy world as “communities of concern.” San Diego developed a methodology for pinpointing these communities that it believes deserve extra help via a Climate Equity Index, which showed areas like Logan Heights, Lincoln Park, San Ysidro and Otay Mesa are likely top priorities for that money.
(Climate equity is a policy term used to describe areas where people, generally lower-income residents and people of color, are living in the least-desirable areas of town due to historical and institutional racist housing policies. Those areas are also prone to suffer the worst effects of climate change, like extreme heat and pollution.)
That means that under the new plan, the city could funnel developer money for parks generated in a newer, better-off part of town, to areas that need more help.
There’s also an incentive for a developer to actually build a park on site, something the city hasn’t done before, Vonblum said. They’d pay only 10 percent of the park fee if they do so.
“A lot of developers have not been incentivized to provide parks on site because they don’t have the acreage necessary,” Vonblum said.
All of these changes mean neighborhoods won’t be individually banking money from developers to fund their list of parks and other projects they put developer impact fees toward. Under the city’s plan, the roughly $400 million that’s in those 50-plus pots now will remain designated toward whatever project neighborhoods had planned, but if and when the new parks master plan is approved by the City Council, any new developer fees would be under the city’s control.
Yet the policy doesn’t identify specific parks projects that should get money first. Neighborhoods will still have to fight for their parks project to get approved and lobby their City Council representative and the mayor.
Susan Baldwin, a Mid-City resident and member of the parks advocacy group called Parks and Recreation Coalition, said the plan should include a project list and a better definition of a park-deficient community.
“Park deficiencies should be determined using a park standard and not by an elected official,” read a June 15 letter from the coalition to the city’s Park and Recreation Board.
The group also said five years of special funding for communities of concern is far too short.
“Five years to make up for decades of disinvestment in park-deficient communities is not a high-level goal or commitment,” Baldwin told Voice of San Diego.
Other needy areas of town supported the equity piece of the plan. San Ysidro, near the U.S.-Mexico border and where about 57 percent of the population earns less than $45,000 per year, collects $8,518 for each new housing unit built in town. But that only yielded about $178,781 in money for parks between fiscal years 2019 and 2020. That community has 20 planned parks projects worth $145 million, but only about $2 million in its parks fee fund.
“The biggest pushback that I have heard against this plan is the lack of prioritization of new parks,” wrote Alejandro Amador, who works for the San Ysidro community development group Casa Familiar, in public comments to the city Park and Recreation Board. “However, for our lower-income communities of concerns, we first have to address the deficiency of greenery, amenities and recreational value of the existing parks.”