In the waning months of his administration, Mayor Kevin Faulconer is proposing a set of policy changes aimed at delivering on his own previous promises and the city’s long-term goals, as well as reforms required by state law.
He hopes the various pieces of the plan, dubbed Complete Communities, would make way for far more homes near transit, remake how the city funds parks and community improvements and change the way it measures the environmental effects of new development.
The first piece of the program is heading toward a City Council vote, after a Council committee last month held a marathon discussion of it, but did not vote to support it.
Council members on the committee praised Faulconer’s ambitions, and said the plan aimed to do the right things. But from both the left and the right, they raised specific issues, and instructed city planners to get back to work. And with public criticism coming simultaneously from unions, large developers, business groups, affordable housing advocates and community representatives, how the mayor’s office will sort it all out is anyone’s guess.
If Faulconer is successful, though, it will represent among the most significant internal reforms of his administration – just in time for him to move on, and for a new Democratic mayor to make it work.
The Housing Plan
The first piece of the program set for Council adoption tackles both the city’s housing shortage and its transportation woes.
The City Council already last month adopted a new, state-mandated outline for how many new homes it needs over the next eight years. Reaching the 108,000 new homes it envisions would mean developers build three times more homes than the roughly 4,000 they currently build annually.
The housing portion of Complete Communities is meant to be a steroid boost for that effort. It is in practice the manifestation of Faulconer’s promise during the 2019 State of the City address to do away with height and housing density limits near transit stations – a pledge controversial with neighborhood groups wary of new development, and popular with advocates who support the city’s goal of decreasing car use by concentrating growth near transit.
It’s also an optional program – it doesn’t by itself change the zoning or development restrictions in place today. But developers who opt into it would see a host of benefits allowing them to build more homes, while shouldering a handful of new requirements meant to balance that windfall.
There was considerable disagreement last month about how well the plan strikes that balance. Small developers who build in urban neighborhoods said it was attractive and that they’d be able to take advantage of it, making more money while still providing more low-income housing and neighborhood amenities. Larger institutional developers said the requirements wouldn’t pencil out, and it would go unused.
The program would be available only to projects within a half-mile of transit stations with frequent service, and on properties that already allow townhouse or apartment construction.
The political calculation to exclude single-family housing areas from the program could make it less controversial among residents of those disproportionately affluent areas – but it also means the program would perpetuate the beneficial treatment those areas already receive.
But eligible projects would then not need to abide by regulations on how many homes they could include, or how tall their project could be. They would instead be limited only by how many total square feet they could build, theoretically allowing developers to put as much housing as they could fit into that square footage.
That square footage would be determined by the size of the property, and its proximity to downtown. A downtown project would have no limitation at all. Projects in the urban neighborhoods like Hillcrest, North Park, City Heights and Encanto could build up to eight times as many square feet as the lot they’re on – a 1,000 square foot lot could be home to an 8,000 square foot building split among as many stories as the developer would like. Developments in the beach neighborhoods or more far-flung suburban areas that are nonetheless near transit and zoned for multifamily housing could build four times as many square feet as the lot they’re on. The city would also approve their permits more quickly, and they wouldn’t need to seek special project approval from the City Council. And developers would need to replace or preserve any low-income units that are already present on the property.
In exchange, developers would reserve 10 percent of the project for people with low incomes, and another 10 percent for people with incomes near the area median. They would either build amenities like public plazas or small parks on site, or pay a new fee into a neighborhood improvement fund, half of which would be dedicated to projects in historically underserved communities. And projects would need to comply with additional design standards to make them transit- and pedestrian-friendly.
The city’s also proposing an overhaul of the fees it charges developers to provide necessities like parks, fire stations and libraries. Right now, those are charged per home, and they’re locked into special accounts for each of the city’s 50-odd communities. The new structure would charge those by the square foot – in hopes of incentivizing developers to build smaller, and therefore cheaper, homes – and the fees would be put into a citywide fund. Again, half of that money would be sent to historically underfunded neighborhoods.
That’s aimed at addressing the inequities produced by the previous system, where long-developed urban neighborhoods disproportionately home to Black and Brown people ended up receiving little funding from new development.
Altogether, the proposal aims to address three state laws aimed at increasing housing production, especially for low-income housing, while meeting the city’s own housing production target and climate goals.
The Transportation Plan
It’s been nearly seven years since Gov. Jerry Brown signed SB 743, enacting an arcane regulatory change that’s beloved by advocates who want to increase housing without producing more sprawl.
But only now are cities required to enact the change, ending the process of cities analyzing new developments based on how much congestion they create on streets near a project, and instead forcing them to analyze how many miles the average person drives due to the project. If the project helps people take shorter trips or fewer trips, it’s presumed to have a better impact on carbon emissions.
Now, projects need to pay to widen roads or add new streetlights or turn lanes to alleviate congestion from new residents. But cities have some leeway on how, specifically, they hold developers responsible for lowering how many miles of driving their projects induce.
Faulconer’s proposal would try to incentivize construction near transit stations by creating a new fee charged based on how much driving a project is likely to create.
Projects downtown wouldn’t have to pay the fee, or for the most part, build pedestrian-friendly elements as part of their project. In the urban core outside of downtown, projects near transit would need to include modest transit- or pedestrian-friendly improvements, or pay an equivalent fee, and projects in the next ring of neighborhoods or not near transit would have to make a larger investment in those projects.
But new housing developments that aren’t near transit and are in purely suburban areas would have to pay a new, relatively large fee for all the miles of driving from their new residents.
The city is required to shift to a new, vehicle miles-based system of evaluating projects, but it had some leeway in how exactly it did that. The one it settled on – essentially, charging suburban projects a substantial fee for the car-based carbon emissions they create – isn’t going to be the most popular route among developers, and that was clear at last month’s Council committee meeting.
But city planners argued their proposal doesn’t just comply with the state requirement to measure driving, but also the city’s self-imposed desire to get half of people who live near transit to commute by bike, walking or transit by 2035, and to follow the state’s over-arching requirements for greenhouse gas emissions reductions.
Taking it From All Sides
Response to the proposal wasn’t all negative. YIMBYs – those who pride themselves on saying “yes” to new projects in their communities – and bike and transit advocates called in to sing its praises. Small developers who build projects in already-dense neighborhoods said it would be a boon to their businesses. Coleen Clementson, director of planning and land use at SANDAG, called to thank the city for working to meet the agency’s shared goals to dramatically increase housing production in the county, and doing it near transit to control the region’s carbon footprint.
But the range of dissenting opinions made it hard to see exactly how the mayor can tweak the measure to ensure Council support.
Councilman Scott Sherman, a Republican, and Councilman Mark Kersey, an independent, both had major problems with the hefty fee charged to projects in the city’s most suburban areas. And Kersey took issue with the fact that downtown projects wouldn’t have to pay any transportation fees, when the fees would overwhelmingly fund projects downtown and in urban areas. Indeed, the fee structure would operate as a wealth transfer from suburban, car-dominated areas to urban, transit-friendly ones.
Councilman Chris Ward, a Democrat running for state Assembly, said he wanted the requirements for low-income housing to be more pronounced. Councilwoman Jen Campbell, a Democrat who has pushed for a ballot measure to increase the coastal height limit in the Midway area, had concerns with how the program would affect the coastal height limit in the rest of her community.
Among outsiders, Craig Benedetto, a lobbyist representing the commercial development group NAIOP, said the list of benefits for developers wasn’t extensive enough to cover all of the costs the projects would need to provide, meaning few developers would use it. He suggested halving the requirement for median income homes in the project – and said the new driving fees would make lots of suburban projects infeasible. Those comments have been echoed by representatives from the Chamber of Commerce and Building Industry Association.
The San Diego Building and Construction Trades Council’s business manager, Tom Lemmon, sent a letter to the City Council arguing it should impose higher wage and benefit standards for construction workers on any development that gets a benefit from the program – or any project that gets lower fees due to the reforms the mayor’s office is proposing. (Ward told city staff he’d like to see construction workers taken care of; Benedetto said requiring so-called prevailing wages would further chip away at how many developers opt into the program.)
Planning activist Susan Baldwin and SDSU professor emeritus Nico Calavita commended the concept of a program that gives developers a set of incentives in exchange for a set of community benefits, but argued the calculations were out of whack. The bonuses for new development are too generous, they said, and could exacerbate gentrification by not requiring more low-income housing.
And representatives from multiple planning groups, which are elected bodies that advise city planning decisions, said they were insufficiently consulted for the changes and the policy is being sped through the adoption process. One active community representative, former Assemblyman Howard Wayne, said the program could even be illegal, since it takes the authority to approve certain projects from the elected City Council and instead makes them approvable by city staff.
No one of those concerns would be especially hard to address in isolation.
But taken together, they’d each push the program into conflicting directions. The Council is now looking to make the program both more and less generous; to ensure more low-income housing is included in new projects, but also less; to slow down the adoption even as the deadline to begin measuring projects by the car travel they produce passed on July 1; to not be too heavy-handed with the fees, as it eyes using the fees to address long-term structural inequities in infrastructure and park spending; to meet ambitious state greenhouse emissions targets without discouraging suburban housing development.
Given all that, it’s perhaps no surprise that the committee took the somewhat unusual step of moving the program to the next phase in the adoption process without taking a vote on whether to support it. It instead simply instructed staff to take another crack at all the issues members raised.
The mayor’s staff won’t need to fix every issue – just the ones it determines necessary to pull together five votes from the Council. But with Council members from the left and the right each having different, and sometimes conflicting, reasons for concern, sorting that out isn’t straightforward.
The plan is not yet scheduled for a vote, but could be slated for approval before the Council’s August recess.