Oceanside’s First Off-Site Affordable Housing Project Is In the Works

A few months ago, San Diego Mayor Todd Gloria was met with backlash when he unveiled a proposal to allow housing developers to build affordable units off-site, rather than on-site with the other market-rate units. 

The argument for such a change was that providing more flexibility to developers would spur more housing development in the city. 

But the city of Oceanside already allows its developers to do that, and its first off-site project is in the works. 

It’s called Mirka South River Village and, once completed, it will be a 43-unit apartment complex built to satisfy the affordable housing requirement for the North River Farms development two miles away. 

Though off-site building has been allowed for several years in Oceanside, developers never took advantage of it because of the ordinance’s unclear language, said Leilani Hines, Oceanside’s housing and neighborhood services director. 

After city leaders revised the ordinance in 2022, the city now has its first taker.  

The developer of North River Farms, a 395-home development in South Morro Hills, partnered with Mirka Investments, an affordable housing developer based in San Diego, to build the affordable units off-site. 

Oceanside has a 15 percent inclusionary housing policy, which requires developers to include at least 15 percent affordable housing in all developments or pay an in-lieu fee of $20 per square foot. 

Many housing experts agree that off-site affordable housing can be a valuable tool if it’s done right. It’s viewed as a more cost-efficient option for developers. For example, an affordable housing developer like Mirka can be eligible for tax credits or subsidized financing options that can allow for high-quality affordable units at a much lower price. 

But off-site building does have the potential for negative consequences. 

It could concentrate affordable units in lower-income areas, it could produce lower-quality buildings and may lead to lower-quality long-term maintenance. It all depends on how cities manage their off-site building requirements. 

So, how do city officials in Oceanside decide where developers can build the off-site affordable housing? 

Down in San Diego, that was a major point of contention. 

Critics of Gloria’s proposal, part of his Housing Action Plan 2.0, were concerned that off-site building would open the doors to redlining, a historic practice that often kept Black and Latino people out of White neighborhoods. 

That’s because his proposed housing package would’ve allowed developers to build market-rate units in one income area and build the affordable units in a completely different income area, Voice of San Diego previously reported. 

That means a developer could build market-rate units in a higher income neighborhood and build affordable units in a lower income neighborhood. 

After a lot of back and forth, the San Diego City Council eventually approved the proposal in December, but limited off-site building to within the same community planning area and city council district or within three miles of the development.  

In Oceanside, it’s decided on a case-by-case basis, Hines said. 

The developer can propose a site, or parcel of land, which city officials will review, or the developer and city officials can work together to choose a site. Either way, it has to be a site that won’t “cause residential segregation, and is located with appropriate infrastructure and services,” the ordinance states. 

“The South River Village project, for example, is near amenities, services, public transportation, schools and it’s a site that is advantageous to the community,” Hines said. “Our lower income families need access to public transportation, they need access to healthcare, they need access to grocery stores – things that are within close proximity.” 

She added that city officials are also tasked with making sure affordable housing projects will not be concentrated in one area. And the ordinance doesn’t allow developers to put off-site affordable units in low-income impacted census tracts, which are census areas where at least 51 percent of its residents are low- and moderate-income. 

Critics of off-site building also argue that it could lead to affordable units being built at a lower quality. 

Oceanside requires the off-site units to be “reasonably consistent and compatible” with the standard and quality of the market-rate units in terms of construction design, appearances and finished quality, Hines said. 

But developers are not required to provide the same amenities that are in the market-rate development in the off-site affordable project. For example, if the market-rate development includes a gym for its residents, the off-site affordable development doesn’t have to include a gym. 

Hines said she’s aware of the criticism that surrounds off-site building, but Oceanside is committed to making sure off-site projects don’t worsen inequity. 

“I think we’ve done as much as we can to try to mitigate those issues in the ordinance and other requirements we have,” Hines said. “The more flexibility that we can provide, we see it as an opportunity to really get the housing constructed, whether it’s the affordable piece of it or the market-rate piece of it. We need all kinds of housing at all different price points.”