San Diego officials are proposing a long-awaited incentive program aimed at providing more housing for middle-income workers such as nurses, teachers and firefighters.
The goal is spurring developers to build housing for a group of residents that make too much to qualify for the subsidized housing developers get incentives to build, but not enough to afford the high-end housing projects that developers prefer because of wider profit margins.
Supporters say the incentive could be a key to solving the local housing crisis, where many middle-income workers can’t afford the county’s roughly $600,000 median price for a home or the $1,600 average rent for a one-bedroom apartment.
“In so many cases, households who make $80,000 to $100,000, which is essentially the middle range, do not qualify for assistance,” Councilwoman Vivian Moreno said last week. “And on top of that, units that fit the need of these families are not being built. These are important people to the fabric of our city.”
The proposal would allow developers to build 25 percent more units than a property’s zoning allows if they agree to reserve 10 percent of the units for people making 80 percent to 120 percent of the region’s median income.
Those amounts in 2019 are $77,850 per year and $98,150 per year, city officials said.
Critics have raised concerns, however, that the proposed middle-income legislation could create new problems by discouraging developers from also continuing to build subsidized units for low-income residents.
Moreno last week proposed a compromise that would require developers taking advantage of the new middle-income incentive to reserve an additional 10 percent of their units for low-income residents.
Developers would get an additional 50 percent density bonus for including the low-income units, allowing them to build even larger projects.
The City Council’s Land Use and Housing Commission approved Moreno’s compromise in a 3-1 vote last week, sending it to the full council for final approval sometime later this year.
But the compromise got mixed reviews from a coalition of developers, labor unions and housing advocates that have offered nearly unanimous support for a series of separate housing construction incentives approved in recent years.
Those have included wiping out parking requirements for new condominium and apartment complexes in neighborhoods near mass transit, looser rules for granny flats, reducing fees for dense projects, streamlining project approvals and encouraging more live/work spaces.
A spokeswoman for the Building Industry Association said a middle-income incentive is a “highly overdue concession,” but expressed concerns about how the legislation would calculate rents for middle-income residents, which hasn’t been determined.
Build Better San Diego, an advocacy group for affordable housing, expressed skepticism that such incentives and other recent legislation that rely on for-profit developers can make a significant difference in local housing affordability.
“These little bits of incremental legislation are good things, but they’re not going to solve the problem,” said Joe LaCava, a spokesman for the group. “We have to look bigger and think bigger.”
Among the council’s Land Use and Housing Committee, the reviews were also mixed.
Councilman Chris Ward, who cast the “no” vote, said the city shouldn’t approve a middle-income incentive until it has dealt with at least two other pieces of legislation.
One is proposed revisions to the city’s inclusionary housing policy that would require developers of all projects to include units reserved for low-income residents. The policy now allows them to pay a fee instead.
Another is state legislation that would allow developers to qualify for density bonuses based on the square footage of a project, not just the number of units.
“This is a little bit of the cart before the horse,” Ward said.
The San Diego-Imperial Counties Labor Council, an umbrella organization for dozens of local labor unions, agreed with Ward that the city should approve a new inclusionary policy before a middle-income incentive.
Councilwoman Jennifer Campbell agreed with Ward, but still voted to forward Moreno’s compromise proposal to the full council based on the urgency of the city’s housing crisis.
“We definitely need to face this problem as soon as we can,” she said.
Councilman Scott Sherman said he would have preferred middle-income legislation that didn’t also require low-income units in the same project. He also said he’d prefer to define middle-income residents as people earning between 80 percent and 150 percent of the region’s median income, instead of the range chosen by Moreno of 80 percent and 120 percent.
But Sherman said it’s time to move forward with the middle-income legislation, predicting Moreno’s compromise would garner enough support on the council to be approved.
He said a bonus outcome of the legislation would be providing people living in subsidized housing for low-income residents a chance to move into more expensive housing without paying market rates. Sherman said that would free up low-income units for people who more desperately need them.
The San Diego Regional Chamber of Commerce urged council members to pass some version of middle-income legislation.
“The affordability issue is making San Diego a difficult place to accept or even stay in a middle-income job,” said Sean Karafin, the chamber’s executive director of policy and research. “Employers feel the impact every day — they’re losing valuable talent.”
No date has been set for the full council to consider the middle-income incentive recommended by the committee.
San Diego Union-Tribune