The city of Oceanside is considering putting a cap on the number of homes built downtown and is simultaneously trying to incentivize the creation of affordable housing.
But the status of its state-required housing plan could cause the city’s efforts to clash with some state housing laws.
The Two-Part Proposal
Part one: Oceanside city staff are proposing to limit the number of units built in its downtown district to a maximum of 100 units per acre for mixed-use projects.
For context, the average density of mixed-use development projects that are currently being proposed by developers in downtown Oceanside right now is about 175 units per acre, according to a July staff report.
Some background: Oceanside used to have a density cap of 43 units per acre, but city officials removed it in 2019. They felt the downtown area could use some developments that provided more housing.
The city did, however, keep its existing development regulations related to building height, required parking, etc.
In 2022, Oceanside’s city officials approved an eight-story development on Seagaze Drive with a density of 321.4 dwelling units per acre. But they didn’t really want to.
The project “greatly exceeded the density and scale of development envisioned for downtown,” a July city staff report said. But city officials couldn’t deny the project because it included 12 low-income units, which qualified it for the state’s density bonus law.
The state density bonus law provides incentives for developers to create affordable housing. Developers can increase the size of their developments in exchange for including a certain number of affordable housing units.
It can also allow developers to bypass things like parking requirements and height restrictions in exchange for affordable units.
“It was unforeseen that changes to California’s density bonus law would significantly limit the city’s ability to apply development standards on density bonus projects under certain circumstances, thereby resulting in projects that were much more dense than envisioned for downtown,” a July city staff report said.
In other words, the state law was leaving the city without a say.
That’s when the city started exploring density limits again.
City staff first proposed a density cap of 75 units per acre last year, but after talking to the Building Industry Association, a countywide advocacy group for developers, they determined the limit would ultimately discourage future projects because they wouldn’t be financially feasible at that low of a density.
Oceanside has now landed at a cap of 100 units per acre, which the City Council will consider later this year.
Something to keep in mind: According to the state density bonus law, if a developer includes affordable units, they are still entitled to increase the size of their development, whether Oceanside establishes a density cap or not.
In fact, Oceanside requires all new residential developments to include at least 10 percent affordable housing, so all new residential developments will be entitled to a density bonus.
The difference here is that Oceanside wants developers to start with no more than 100 units per acre, so that any additional units granted to developers under the density bonus law will result in a total of 150 to 200 units per acre.
The idea is to avoid anything in excess of 200 units per acre, even with density bonuses.
Part two: Along with a density cap, city staff are also proposing a way to incentivize development of more affordable housing.
They want to do this by allowing developers to build more units if they include more homes for lower income residents. City staff believe that would encourage developers to create more affordable housing than what the city requires now.
Right now, Oceanside doesn’t have enough sites, or parcels of land, identified in its Housing Element for all the low-income units the state said it needed to plan for.
A Housing Element is a state-required plan outlining how a city can accommodate enough new housing to meet its population’s needs.
If more affordable housing units are built in each development, the city will get closer to fulfilling those housing goals.
But Wait …
Oceanside is planning to make all these moves, but it might not really matter, for now.
That’s because the state did not approve the housing plan Oceanside originally submitted – that’s the Housing Element.
Oceanside’s staff have been busy making revisions to their plan and are aiming to resubmit it to the state by Aug. 15, said Sergio Madera, Oceanside’s city planner.
However, it’s not clear how long the state’s housing agency will take to approve the city’s revised Housing Element. Of course, there’s always the possibility that the state could reject it again and ask for more revisions.
That’s where a handful of state housing laws could come into play in the meantime:
- The Builder’s Remedy: This says if a city doesn’t have a compliant Housing Element, the city can’t use its zoning code or general plan to deny an affordable housing project.
- SB 330: Cities can’t enact new laws that would have the effect of reducing the legal limit on new housing within their borders.
- AB 1398: This requires cities that don’t have a compliant Housing Element to rezone all of the sites identified in its Housing Element that need rezoning.
Because Oceanside’s housing plan hasn’t been approved by the state yet, the city’s density cap proposal effectively doesn’t matter because the Builder’s Remedy would allow a developer to propose any size project with as many units as they want and the city would have to approve it, said YIMBY Policy Director Rafa Sonnenfeld.
“The city could avoid going down that rabbit hole of potential state intervention and more legal problems if it just focused on the pro housing side of that equation,” Sonnenfeld said.
In Other News
- Kaiser Permanente’s new San Marcos hospital officially opened Wednesday. The $600 million hospital is the third Kaiser hospital in San Diego County and will serve the 188,000 Kaiser members that live in North San Diego County. (Union-Tribune)
- Oceanside has announced three finalists in a design competition that will help determine how to acquire and retain sand on its beaches. The groups will design concepts aimed at mitigating erosion from the impacts of climate change. (Coast News)
- North County Transit District Executive Director Matthew O. Tucker announced Monday he will retire Sept. 1 after nearly 15 years with the agency and 30 years in public transit. (Union-Tribune)