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City Municipal Code Revisions Aim To Create Greater Housing Affordability

The only way to make housing more affordable is to build more housing, so the City of San Diego is implementing strategies to encourage developers to build more affordable housing and housing that is affordable for a larger portion of the rental population, according to Elsye Lowe, deputy director of the project submittal and management division of the City of San Diego Development Services Department.

Elyse Lowe, deputy director of the project submittal and management division of the San Diego Development Services Department, and Heather Riley, a partner in the San Diego office of Allen Matkins, at Bisnow's San Diego Development & Construction Forum.

San Diego developers delivered 3,100 multifamily units in 2016 and another 5,800 units under construction are slated for delivery in 2017, but the majority of new apartments are luxury product and only affordable for the top 15% of renters, according to a recent Marcus & Millichap report. The average San Diego rent hit $1,743 in 2016, reports MarketPointe Realty Advisors, but the average San Diego working family earning the median household income can afford to pay $1,500/month in rent.

Lowe provided a presentation at Bisnow’s San Diego Development & Construction Forum on changes to the municipal code designed to encourage more housing of all types and offered advice on getting projects through the permitting process without unnecessary delays.

“We’re looking at all the different ways we can improve housing affordability,” Lowe said.

Ten years ago the city implemented expedited processing for affordable housing and sustainable and infill projects. The San Diego Municipal Code is undergoing revisions to streamline the permitting process for certain types of projects with the goal of making the approval time 50% faster than the standard permit approval for any projects meeting new sustainability and revised affordable housing and infill project requirements.

Development Services is moving to the former Sempra Energy/SDG&E building. The city did a 20-year, rent-to-own option on the building that will save taxpayers $44M in rent.

The changes will reduce the number of decision levels in the process, Lowe said, reclassifying these types of projects from a Process 4, which goes to the planning commission, to a Process 2, which only requires a neighborhood development staff decision. This change includes deviations for environmentally sensitive land, setbacks and anything that can be managed internally. This includes projects within community plans and overlay zones, she said. Community plans can now be updated without going to city council for a discretionary approval.

In addition, the code update includes all residential projects — affordable to market rate — within the San Diego Promise Zone, a federally designated area that extends from Encanto to Barrio Logan, in the expedite program, which aims to reduce approval time from one year to six months.

“It’s not just for discretionary projects. If you build [residential] in this area we’re going to give you code benefits and express processing — you don’t have to be building affordable, you don’t have to be building sustainable to qualify,” Lowe said. People working on a federal grant will be given priority processing.

To encourage projects nearby transit, the new expedite code also includes all types of projects within one-fourth of a mile, or a 15-minute walk, from any high-performance transit station.

Lowe said the city also is eliminating fees for 100% affordable projects.

“We’re not going to charge you $500 per unit or X amount of dollars per square footage, we’re not going to charge fees when you do 100% affordable," she said.

She said it will require a lot of code updates to streamline the process, from removing requirements for lot consolidation and amending grading regulations to exempting historic structures from floor area ratios and parking standards.

Code changes also will create a middle-income affordable housing density bonus and reduce the number of parking spaces required in residential projects. Each parking space costs $75K to $100K to build and maintain for 30 years; Lowe said the idea is to take that expense out of the equation and encourage greater use of mass transit.

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She also offered information to help ensure a successful submittal process, noting that Development Services offers a free, professional certification class for anyone who wants to learn about all aspects of the submittal process and what is required from developers to be successful. There also are other professional certification classes on a variety of topics offered, Lowe said, noting developers who take these classes, which run an hour to an hour and a half, are then exempt from the five-day completeness check by certifying they have done completeness reviews on their projects.

“Also, read the code, know the code, be informed,” she said. “Don’t be afraid to open the code and get a better idea about it, especially Chapter 11.”

Chapter 11 provides a step-by-step guide to land development procedures.

Lowe said her department’s website offers an online project submittal manual that details everything developers need to know for all types of projects, as well as technical and informational bulletins organized by subject or number on every building industry subject imaginable.

The department also offers developers three 30-minute submittal conferences to answer any questions.

Along with the Development Services Department’s move to the former Sempra/SDG&E building at First Avenue and Ash Street, the department is moving from the current in-house Project Tracking System to a new web-based system called Accela Citizens Access, which will allow developers to get cycle review comments for their projects online.

Lowe said her department understands that project changes will occur throughout the development process.

“But don’t willy-nilly it,” she said. “Just as much as you want certainty on the rules, it helps us in your project review to get certainty from the applicant.”