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Mayor Faulconer, Councilmembers Unveil Plan to Increase Housing Supply, Boost Affordability for San Diegans

Mayor’s ‘Housing SD’ Package Aims to Lower Costs, Promote Building Near Transit & Cut Red Tape to Address Affordability Crisis

Wednesday, June 21, 2017 - NEWS RELEASE
San Diego – To address a statewide housing crisis on the local level, Mayor Kevin L. Faulconer was joined Wednesday by City Councilmembers Scott Sherman and Chris Ward and housing advocates to call for the adoption of the “Housing SD” plan – a set of proposals that would increase housing supply, lower costs and promote smart growth to address the lack of housing affordability for low- and middle-income San Diegans.
“The state’s housing shortage and the unaffordable housing market it spawned has left the dream of homeownership out of reach for the majority of San Diegans,” said Mayor Faulconer, who made the announcement at the COMM22 affordable housing complex in Logan Heights. “The only way to change that is to build more housing that people can actually afford. Hardworking folks who love San Diego and want to live in San Diego should not be priced out of San Diego.”
More than 70 percent of San Diegans can’t afford to buy a house at the county’s median home cost of more than $500,000 – making San Diego one of the least affordable markets in the country.
“The housing affordability crisis is the top issue facing our city that is literally forcing the next generation of San Diegans to move outside the region,” said Councilmember Sherman, Chair of the Council’s Smart Growth & Land Use Committee. “I am thankful the Mayor and City Council are taking action, not just talking about it to address this serious problem.”
To address the shortage of affordable homes, the “Housing SD” plan would implement strategies to:
  • Spur the construction of low-income and middle-class housing through incentives; 
  • Streamline development standards and speed up the review process; 
  • Direct funding toward affordable housing; and
  • Encourage growth in transit-friendly areas, which also supports the goals of the Climate Action Plan. 
“Housing costs spiraling out of control impacts everyone, and everything we aspire to accomplish as a city,” said Councilmember Chris Ward. “These proposals are an important jumping off point to ensure we provide all the housing opportunities San Diegans need to succeed and thrive here.”
The “Housing SD” plan consists of a dozen proposals to be implemented over the next year, with several going before the City Council this summer and fall. Highlights include:
  • Middle Income Density Bonus Program – Creating a program to give incentives for developers to construct housing projects that provide units that can be sold or rented to entry-level/middle-income households. Estimated completion date: Winter 2019.
  • Affordable/Sustainable Expedite Program – Revising the existing program to incorporate new City initiatives, address prior City Council direction and improve service delivery where qualifying projects can have their discretionary and ministerial permits expedited. Summer 2017.
  • Companion (Second Dwelling) Unit Production – Changing the municipal code to implement state mandates reducing requirements for parking, fees and permits as well as further changes to help promote the construction of Accessory Dwelling Units. Summer 2017.
  • Affordable Housing Density Bonus Program Update – Updating City regulations to reflect changes in state law and additional code changes to further incentivize the use of this housing tool to increase the production of more affordable units. Winter 2018.
  • Updates to the Land Development Code (11th Code Update) – Several code amendments to streamline the development review process, including the expansion of live/work quarters and certain exemptions for designated historic structures. Fall 2017.
  • Streamlined Environmental Review – Developing a checklist and compliance document to simplify use and ensure consistency in application of the California Environmental Quality Act (CEQA) Guidelines section 15183, which allows a streamlined review process for public and private development projects that are consistent with the densities established by existing zoning, community plan or general plan policies for which an Environmental Impact Report was certified. Winter 2018.
  • Development Impact Fee (DIF) Calculations – Reviewing and recommending a preferred methodology for calculating DIF, which are fees on new development to offset future costs derived by residents and employees that will require public facilities such as fire stations, libraries, parks and roads, etc. For example, a flat residential rate is applied to each new residential unit, regardless of unit size. As a result, smaller and more affordable units pay disproportionately more in DIF than larger units. Winter 2018.
  • Parks Master Plan – Creating a new master plan for San Diego’s park system for the first time in more than 60 years. The plan would develop an implementation plan for prioritizing, phasing and funding of projects; identify high priority sites for parkland acquisition, design and development; and address needs in the current system and emerging trends for the future, among other things. Fall 2019.
  • Transit Priority Area Parking Standards – Revising parking standards within Transit Priority Areas so the City is not unnecessarily requiring excessive parking in development projects. Parking spaces add significantly to the cost of building homes, which translates to increased sales prices or higher monthly rents. Fall 2018.
  • Implementation of SB743 and Vehicle Miles Travelled (VMT) – Developing VMT thresholds and preparing the necessary environmental review process to comply with SB743, which reformed the CEQA analysis from level of service to VMT. Summer 2018. 
  • Housing Successor Fund & Notice of Funding Availability (NOFA) – Awarding $25 million to help fund affordable housing developments targeting households demonstrating low to extremely low income. The City and Civic San Diego announced the NOFA in February 2017 and the funding will be used to support the acquisition, rehabilitation or new construction of housing that will provide long-term affordability. Fall 2017.
  • Transit Oriented Development Fund – Using $20 million in San Diego Housing Commission and Civic San Diego assets to create a transit-oriented development fund that would leverage those public assets at a 3:1 ratio to provide finance options that are currently unavailable or scarce. Fall 2017.
  • Housing Inventory Annual Report – Developing an annual report that compiles information on San Diego’s housing inventory and greater housing outlook to better understand the crisis in the short term and help develop strategies that produce results in the long term. Summer 2017.
This plan follows several operational changes the City has made in recent years in its Development Services and Planning departments to speed up the project review process and complete community plan updates at a record pace. The City also expanded its Affordable Housing Density Bonus Program last year to incentivize developers to include more affordable units in projects.
Here’s what civic leaders are saying about the “Housing SD” plan:
Jerry Sanders, President & CEO of the San Diego Regional Chamber of Commerce: “The Chamber believes this proposal will help convince companies to come to, or expand in, San Diego, as they can trust that we will have the housing supply to support the talent they attract.”
Mary Lydon, Executive Director of the “Housing You Matters” Coalition: “The growing alignment and cooperation around our housing affordability crisis is a major accomplishment in and of itself. Now that so many are on the same page we can work together to find the solutions.”
Kris Michell, President & CEO of the Downtown San Diego Partnership: “The lack of middle-class housing is a major consideration for businesses and young talent looking to relocate to San Diego. The Mayor’s proposal to slash permitting times for entry-level housing, affordable to young millennials and working families, is critical to attracting talent and building a stronger economy.”
CONTACT: Craig Gustafson at (619) 453-9880 or cgustafson@sandiego.gov