The Not-So-Hidden Costs of the “Affordable Housing Density Bonus” Program

| September 6, 2017 | 0 Comments

by Barry Hager, Susan Dean and Deborah Pettry

Elsewhere in this issue, you can read about the plight of Green Manor residents, whose lives are being impacted by the Jonathan Segal project next door at 1011 Fort Stockton Drive (“The Fort”). It’s especially sad that these lower income seniors and others in the community are being negatively affected because State and City regulations are allowing the project to exceed multiple development requirements in exchange for providing just three affordable apartments out of the 20 total.

Few would disagree with the proposition that there is an affordability problem for housing in San Diego, as in many major U.S. cities. Attempting to address this critical problem, the City of San Diego has taken the approach of “pulling out the stops” on promoting and facilitating housing development, including pushing for more density in community plans and cutting back regulations on development, much of it in the hope that affordable housing will “trickle down” to lower and middle income residents. However, developers in general are more inclined to develop higher-end and luxury housing, due to the higher profit margins involved.

A controversial tool employed by the City to encourage affordable unit development is the City’s “Affordable Housing Density Bonus” program. This program, in essence, provides that in exchange for a project including a small percentage of Affordable Units (as defined), the developer is allowed to exceed the zoned density for the site and utilize various “incentives” which allow the project to exceed other regulatory constraints, such as height limits, setbacks and parking.

State law mandates that the City have such a program, but San Diego’s program allows more flexibility for the developer than State law requires. The program includes a sliding scale, in that the higher the percentage of “affordable” units, the more density and “incentives” the developer is entitled to. And even though a project exceeds zoned density and other regulatory constraints, the project will be processed ministerially by the City without discretionary review, public hearings and public notice.

Undoubtedly, the benefits are substantial for the developer and for the handful of recipients (tenants who are selected by the property owner) of the Low Income/Very Low Income housing units. However, the public bears a substantial cost for the program, in the form of excessive development on a given site. The Fort project is a good example of this public cost. In exchange for its three “very affordable” housing units, the project has been allowed additional density and incentives, including the following:

• Five (5) units over the fifteen (15) units allowed under existing zoning.
• Building height limit increased from 50’ to 87’ (and up to 90’ at top of the elevator tower).
• Required commercial parking spaces reduced from 11 to 0.

The residents of the adjacent Green Manor low-income senior housing facility are now experiencing the public cost of this project – and soon, students returning to St. Vincent School, directly across the street from The Fort, will also experience the public cost. With a building height of 87 feet where only 50 feet would have been allowed under the zoning ordinance that existed at the time of permitting, the Fort cuts off light and casts a broad shadow on neighboring properties. Other Mission Hills residents and visitors will deal with the public cost as the reduced parking requirements for the commercial element of the project push parking out onto neighboring streets in an already-crowded area.

What proof is there that this program is having any meaningful impact on housing affordability to offset the public costs? Is the minimal requirement for including affordable housing in a project in exchange for a liberal increase in density and zoning incentives helping to solve the problem, or is it a give-away program for residential developers? And the mayor’s office and some city council members are proposing even more liberal use of the program.

We strongly support the need to address the housing affordability problem in San Diego. Is this program making any meaningful difference? We urge our City officials to analyze the effectiveness of this program and whether its affordability gains offset the many public costs. Even if the program does provide meaningful benefits, its public costs can be lessened by adding a requirement for public noticing and reasonable limits on the incentives granted. Please contact our City Council representative (Chris Ward for District 3) and Mayor Kevin Faulconer to express your concern about regulations that offer uncertain benefit in exchange for these great costs to the community.

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