The city of San Diego took an aggressive step toward addressing the local housing shortage when the City Council voted Dec. 12 to approve a large and varied package of developer incentives and regulatory changes intended to spur more construction.
The package, approved 7-1 after a contentious three-hour public hearing, includes a developer incentive that critics say could worsen segregation by keeping low-income residents out of high-income areas.
Council said they are optimistic the benefits of that incentive will outweigh any risks, partly because of some amendments they also approved.
Other elements of the plan, known as Housing Action Package 2.0, include incentives for building new single-room-occupancy hotels, plus a policy to accelerate conversion of businesses like scrapyards into housing. That policy would apply only in the “promise zone” in southeastern San Diego. Such businesses would have to relocate within 15 years so the land could be converted.
The package also contains incentives for developers to build housing for college students and loosens rules for housing on public land and on commercial sites deemed underutilized.
In addition, the package aims to protect many low-income San Diegans with a policy that gives residents displaced by new housing projects a leg up on securing subsidized units in new developments in their neighborhoods.
“This series of reforms will boost the supply of homes and reduce the cost of housing, help our businesses recruit and retain talent and put more hard-earned dollars back into the pockets of everyday San Diegans,” said Mayor Todd Gloria, who spearheaded the effort.
ers say the changes could help spark the kind of building boom San Diego needs to meet a state-mandated goal of permitting about 108,000 new homes between 2021 and 2029.
Last month, city officials revealed they are way behind that pace. Just over 10,000 housing units were approved in 2021 and ’22, leaving more than 97,000 still needed — or over 16,000 per year for six consecutive years.
Critics of the newly approved measures, including many community leaders in neighborhoods dominated by single-family homes, say some of the elements are reckless, ignore the need for ive infrastructure and would damage quality of life for many residents.
Such concerns prompted Councilwoman Jennifer Campbell to cast the lone dissenting vote.
“I will not vote for this package, which has so many changes in it with unknown consequences,” she said. “I may be the only one left who votes no, but I will vote no, and my constituents will appreciate it.”
Campbell was referring to a hearing last month in which the council rejected the package in a 4-4 vote — based primarily on the same concerns about segregation that came up again Dec. 12.
The source of that controversy is a new incentive that will let developers who participate in the city’s 3-year-old Complete Communities program build low-income housing and market-rate housing in separate locations.
Under the program, developers can build much larger market-rate projects than zoning would otherwise allow if they agree to also build rent-restricted units for low-income people.
The program has until now required that all the units be built at the same site. But the new package allows the rent-restricted units at a different location.
Under the updates, the low-income units can’t be in low-income neighborhoods but can be in moderate-income areas, even if the market-rate project is built in a high-income area.
The council amended the mayor’s initial proposal to limit the moderate-income option to sites within three miles of the market-rate units and within the same community planning area.
It also required that both housing developments — the market-rate and the rent-restricted — have amenities of similar quality.
“This is not the traditional off-siting practice of the past, where housing is off-sited to low-income and low-opportunity communities,” said council President Sean Elo-Rivera. “The changes that are here today put some reins on.”
Elo-Rivera said his pathway to approving the incentive was complicated.
“I had a vehement opposition to off-siting,” he said. “But by creating the opportunity for off-siting, there can be more affordable housing that gets built.”
Many of the roughly 80 people who spoke during the hearing criticized the new off-siting incentive.
“The mayor’s segregated housing plan takes San Diego in the wrong direction and back to our shameful past,” said Geneviéve Jones-Wright, a local civil-rights lawyer who is challenging Gloria’s reelection bid.
Neighbors for a Better San Diego, a group that typically fights housing density, praised much of the package but objected to the Complete Communities changes. It says the city shouldn’t be changing what the group considers an already radical program until it’s clearer what impact it will have in its original form.
Stefanie Benvenuto, director of public affairs for the San Diego Regional Chamber of Commerce, praised the package.
“When you have the industries that represent the builders — affordable and market-rate — telling you that these policies are what they need to make more housing available, then I think it’s fair to listen to them,” she said.
Melanie Cohn of Biocom said “we housing density and production, specifically for the life science workforce who can’t find places to live — even for people who are making a good wage.”
Several students at UC San Diego in La Jolla spoke in favor of the incentives to build student housing.
“It isn’t just about having a roof over our head,” said student Erica Lee. “It’s about feeling secure, having a sense of stability and being able to meaningfully engage with our education.” ◆
