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Mayor’s Latest ‘Housing SD’ Reform Wins City Council Approval

Moderate-Income Program Includes Density Bonuses & Incentives for Projects That Provide Housing for Low- and Moderate-Income Residents

Wednesday, July 31, 2019 - NEWS RELEASE

San Diego – Yesterday the City Council unanimously adopted a measure aimed at providing incentives for builders that provide housing for low- and moderate-income residents as part of Mayor Kevin L. Faulconer’s “Housing SD” plan.

The Moderate Income Housing regulations follow the successful Affordable Housing Density Bonus program approved in 2016 and now the two can be coupled together. Once a project maximizes to the existing affordable housing density bonus of 50%, it can then use the new moderate-income program to obtain an additional 25% density bonus as long as 10% of pre-density units are deed-restricted at 120% area median income (AMI) or lower.

“We need more housing that hardworking San Diegans and their families can afford and this is another tool we can use to incentivize construction near transit and job centers,” Mayor Faulconer said. “We’ve implemented a number of reforms over the past few years aimed at improving housing affordability, but we have a lot more work to do and programs like this continue the momentum we’ve built.”

The need for more construction of homes for moderate-income residents is clear. The City’s Regional Housing Needs Assessment called for 15,462 housing units to be built from 2010 to 2020 reserved for moderate-income households but only 10 had been constructed through 2017. The moderate-income program establishes density bonuses, incentives and waivers for development projects that include affordable and moderate-income housing.

Moderate income is defined as 81-120 percent of AMI. Low income is defined as 51-80 percent of AMI.

The support from City Council for the Mayor’s Moderate-Income proposal follows Monday’s approval of new Mixed-Use Zoning, which created six new zones that allow projects to include a mix of residential and employment uses. The goal is to provide flexibility for builders to meet market demands and locate more housing near jobs.

Mayor Faulconer’s “Housing SD” plan is a series of reforms to stimulate the construction of housing for all San Diegans. Highlights include:

Affordable Housing Density Bonus: Added incentives that go beyond state law to spur the development of affordable housing for various households, including seniors, military personnel, former foster youth, disabled veterans and homeless individuals. Twenty projects took advantage of the program in 2018.

  • Parking Reform: Eliminated parking requirements along new housing developments in transit priority areas, reducing development costs while encouraging usage of alternative forms of transportation.
  • Streamlined Regulations for Companion Units: Resulting in a 375 percent spike in applications, making it easier and more affordable to permit “granny flats” and other companion units.
  • Reduced Fees: Updated the Affordable, Sustainable, Infill Development program to eliminate fees for projects building 100% affordable housing in the city.
  • Updated Community Plans: Developments that comply with new community plans will be able to benefit from a streamlined California Environmental Quality Act review, leading to a reduction in project times and costs. So far, 12 community plans have resulted in adding capacity for more than 37,000 additional housing units under Mayor Faulconer with five more expected to be completed by 2020. Further, the Mission Valley Community Plan expected to go to the City Council for approval later this year would add capacity for another 28,000 housing units.
  • Streamlined Project Reviews: Changed the municipal code to speed up the approval process.
  • Permanent Supportive Housing: Updated the municipal code to allow for a streamlined process to construct housing with accompanying supportive services for those experiencing homelessness.