San Diego took an aggressive step toward solving the city’s housing crisis Tuesday when the City Council approved a large and varied package of developer incentives and regulatory changes to spur more construction.
The package, which was 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 members said they are optimistic the benefits of that incentive will outweigh any risks, partly because of some amendments they approved Tuesday.
The council chose to focus on other elements of the package, which includes incentives for building new single-room-occupancy hotels and a policy accelerating conversion of businesses like scrapyards into housing.
It also includes incentives for developers to build housing for college students and loosens rules for housing on public land and underutilized commercial sites.
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 within new developments in their neighborhood.
“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.
Supporters say the changes could help spark the kind of building boom San Diego needs to meet a state-mandated goal of 108,000 new homes between 2021 and 2029.
Last month, city officials revealed they are way behind pace. Just over 10,000 housing units have been built, leaving 97,000 still needing to be built — or 16,000 units per year for six years straight.
Critics of the measures approved Tuesday, including many community leaders in neighborhoods dominated by single-family homes, say some of the elements are reckless, ignore the need for supportive infrastructure and would damage quality of life for many residents.
Such concerns prompted Councilmember Jennifer Campbell to cast the lone no vote.
“I will not vote for this package, which has so many changes in it with unknown consequences,” she said. “I may be on 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 where the council rejected the package in a 4-4 vote — based primarily on the same concerns about segregation that came up again Tuesday.
The source of that controversy is a new incentive that will let developers that participate in the city’s 3-year-old Complete Communities program to 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 also to build rent-restricted units for low-income people.
The program has until now required all the units to be built at the same site — but the housing package approved Tuesday allows the rent-restricted units at a different location.
Under the updates, the low-income units can’t be in low-income neighborhoods, but they can be in moderate-income areas, even if the market-rate project is built in a high-income area.
On Tuesday, 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.
They 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 attorney who is challenging the mayor for re-election. “Racially discriminatory housing practices define much of San Diego’s current demographic landscape.”
Other critics accused council members of approving the package because of lavish campaign contributions from developers and the business community.
“I know they tried to buy you, but you don’t have to stay bought,” said former City Attorney Mike Aguirre.
Elo-Rivera praised the package overall.
“We are going to be able to build more homes on public land, we’re going to build more housing on underutilized commercial sites, and there are incentives for SROs, which are an incredibly important piece of the puzzle,” he said. “There’s increased opportunity for student housing, there are anti-displacement measures and the accelerated closure of polluting businesses.”
That policy would only affect businesses in the city’s Promise Zone in southeastern San Diego. Councilmember Raul Campillo praised the policy.
“These are incompatible uses like scrapyards and other uses that really just make a community wonder how that is still there right next to their homes,” he said.
Such businesses would have to relocate within 15 years so that the land could be converted to housing.
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.
They say the city shouldn’t be changing what they consider an already radical program until it’s clearer what impact it will have in its original form.
Business leaders praised the package.
“We support 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,” said Melanie Cohn of Biocom.
Stefanie Benvenuto, director of public affairs for the San Diego Regional Chamber of Commerce, said it makes sense for the council to listen to industry leaders.
“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.
Several UC San Diego students 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.”
