Supervisors provide direction on increased housing options

The San Diego County Board of Supervisors has given direction to county staff to advance 19 options to increase the supply of affordable housing in unincorporated San Diego County.

Separate Board of Supervisors votes were taken on each of the options during the Oct. 10 hearing; the votes were to refine the possibilities for subsequent action rather than to approve any specific proposal. The supervisors voted 5-0 to receive the report and to find the preliminary planning actions exempt from California Environmental Quality Act review.

"It's a good starting point," said Supervisor Dianne Jacob. "I think staff did a pretty good job of coming back with what we had asked for: a lot of options."

The Board of Supervisors updated the county's general plan in August 2011, and that update included principles to place development in the most appropriate areas such as near town or village centers and transportation corridors. The density calculations were based on the expected increase in population for unincorporated San Diego County.

Projects with density lower than the general plan stipulates decrease the amount of available housing and thus create a shortfall. That housing shortage tends to be not at the expense of luxury homes but at the expense of more affordable housing, and the county currently does not have a mechanism to compensate for projects which do not utilize the full density allowed.

A May 2017 Public Policy Institute of California report indicated that San Diego County has a shortfall of more than 140,000 available affordable rental homes.

Some San Diego employees have moved to southwest Riverside County to obtain affordable housing, which impacts San Diego County roads while providing no traffic mitigation funding for San Diego County.

On March 28, the county supervisors voted 5-0 to direct the county's chief administrative officer (CAO) to investigate the means of establishing a Transfer of Development Rights (TDR) program, a density transfer credit program, or an equivalent program for unincorporated San Diego County and to return to the board within 180 days with findings and options for consideration.

A 4-0 vote April 18 with Ron Roberts in Asia directed the CAO to investigate other options to promote the expedient building of homes in unincorporated San Diego County and the closing of the housing gap through incentive programs and/or regulatory relief and to return within 180 days with appropriate recommendations.

The 19 potential actions were divided into five categories. Three of those were in the process and streamlining category focused on reducing the time and cost associated with the permit process while four possible actions apiece were in the regulatory reform category to correct inconsistent or outdated regulations which inadvertently act as barriers in housing production, the participation and incentives category to explore incentives to stimulate production of diverse housing types, the general plan and community plan category to implement general plan goals and policies related to maintaining general plan housing capacity, and the land development code category which would consolidate and modernize zoning and use regulations.

"I'm in agreement with every one of their recommendations," Roberts said.

Informational presentations were made to the community planning group and community sponsor group chairs on July 14 and to the county's Planning Commission on Aug. 3, and two community planning groups requested presentations which were provided in August.

One process and streamlining action is to expand upon the county's previous business process re-engineering efforts to reduce processing times and thus the applicant's cost. Another action in that category would improve the community engagement and public review process by receiving public input at key points in the process to develop balanced recommendations.

The other processing and streamlining action would improve project scoping, communication, issue identification, application processing, tracking and archiving, and coordination and partnering between county departments. Because the actions are already ongoing, no further Board of Supervisors direction is needed.

Three of the regulatory reform actions involve previous direction from the Board of Supervisors: a site implementation ordinance which would establish agreements between the developer and the county to consolidate and defer conditions of approval, removing potential redundancies in the Resource Protection Ordinance and the Biological Mitigation Ordinance to avoid duplicated work efforts, and revising permit review procedures including an expansion of on-line permit processing as well as streamlined decision-making authority.

A density bonus program is one of four participation and incentive recommendations. A developer granted a density bonus would provide a deed restriction limiting the housing to families with extremely low or very low income (less than 50 percent of the region's average median income), low income (50 to 80 percent of the AMI), or moderate income (80 to 120 percent of the AMI) for a period of at least 55 years.

County staff provided two density bonus options: one to allow additional incentives for a project and one to expand the density program to include middle-income earners with a family income between 120 and 150 percent of the AMI. (The region's 2018 AMI is $81,000 while the median price of a home is estimated to be $550,000; 120 percent of the AMI is $98,151 which would allow purchase of a $315,000 home.)

"I like both of them," Supervisor Bill Horn said of the bonus incentives. "It's cost-prohibitive to build lower-income units if you don't have enough of a bonus to make it worthwhile."

The supervisors voted 5-0 to direct county staff to develop both density bonus options further and return to the board for consideration of adopting those density bonus programs.

Inclusionary housing policies link approvals for market-rate housing to the creation of affordable homes for low-income and moderate-income households. The program criteria and implementation procedures must be designed carefully to avoid unintended consequences including a reduction in overall housing creation or increases in market-rate prices.

Because homebuyers or renters absorb the costs associated with inclusionary housing programs, a program without the correct market conditions could reduce the overall housing production. A motion to direct county staff to prepare both an economic feasibility analysis flexible compliance program and an ordinance with a minimum 10 percent affordable housing requirement passed on a 3-2 vote with Greg Cox, Roberts, and Horn in favor and Jacob and Kristin Gaspar opposed.

A 5-0 vote on the accessory dwelling unit options directed county staff to prepare plans and implement programs to reduce permitting time and costs by providing pre-approved plans to property owners and expediting the plan check review process, to develop a program for future Board of Supervisors consideration which would waive development impact fee costs for a five-year trial period, to prepare an ordinance to create a Junior Accessory Dwelling category for additional units derived by converting existing space and which do not require additional parking, and to monitor the results of other jurisdictions' pilot programs to encourage construction of accessory dwelling units by providing a grant or loan to the property owner in exchange for renting the additional dwelling unit at an affordable rate through a deed restriction or other similar mechanism.

The fourth participation and incentive recommendation directed county staff to prepare a study to evaluate a change in development impact fees, which are currently based on dwelling units, to fees based on total square footage of the dwelling which would reduce the development cost for smaller units and thus the housing cost. A 5-0 Board of Supervisors vote advanced that option to the study stage.

Improved coordination with military branches and other jurisdictions to accommodate an anticipated increase in military members and dependents living in the region is one of two general plan and community plan actions already ongoing and not requiring a Board of Supervisors vote; the other action in that category is monitoring general plan attainment by tracking housing permitting, production, and capacity changes.

Exploring options to retain general plan capacity and a Transfer of Development Rights program, in which development credits are transferred from one location to increase development potential at another location, included five options and the supervisors voted 4-0 to explore four of them further.

Developing a program to track unrealized residential units from downzoned properties or developments built out below the maximum density allowed would allow the Board of Supervisors to allocate unrealized residential units on a case-by-case basis.

Other options include development of a TDR program with defined criteria for identifying sending and receiving sites to be evaluated by the county supervisors on a case-by-case basis, developing a transaction-based TDR program to facilitate private-to-private market rate transactions to transfer development rights between properties, and monitoring the initiative which was placed on the March 2020 ballot and would prohibit density transfers from higher-density parcels to lower-density parcels so that the county can determine the impact passage of that initiative would have on a TDR program.

County staff also brought forth the possibility of requiring residential development to be constructed to a minimum percentage of the allowed density but did not recommend that option, and the Board of Supervisors also voted 5-0 not to pursue such policy further.

Two of the land development code proposals warranted a 5-0 vote for staff to pursue the options further: updates to the grading ordinance which would streamline grading and clearing permits for common projects while also considering the elimination of grading permits for non-development actions such as digging a well or landscaping improvements (the activities would also separate the agricultural grading and residential grading processes) and expanding the range of housing types and lot sizes permitted.

The two ongoing land development code actions are allowing the rounding up of allowable units and restructuring land development ordinances into a consolidated Land Development Code.

"It's nice to see that some of the suggestions have made it to the Power Point," said Building Industry Association of San Diego vice president for government affairs Matthew Adams.

"All of this has to do with the economics," Adams said. "We have to find the appropriate incentives to move forward."