The City of San Diego’s popular infill development initiative, the Complete Communities – Housing Solutions program, has generated a flurry of transactions and project applications during its first few years of existence. Developers have rushed to take advantage of the program’s benefits which include by-right development up to 8.0 or even unlimited FAR for certain sites. In response to the program’s success, the City Council recently voted to expand its benefits to an additional 688 acres by redefining the criteria for qualifying sites.
The Housing Solutions program, which was approved by the City Council in December 2020, was a major goal of the prior Mayor. The program one-ups the State Density Bonus Law by providing a floor area ratio (“FAR”) -based incentive program for projects that restrict specified percentages of units for rental at affordable rates. To qualify, a development must lie within one of four FAR tiers as shown on the City’s interactive map. Qualifying projects are entitled to new FAR ratios of 4.0, 6.5, 8.0, or unlimited FAR, with some exceptions, as well as incentives and waivers to deviate from development standards in the same fashion as traditional Density Bonus projects. Vitally, compliance with the Housing Solutions program itself does not necessitate a discretionary approval for most projects, so developments can achieve massive infill density without triggering California Environmental Quality Act review.
Housing Solutions projects earn the heightened FAR by restricting 40% of base units for rental at affordable rates. Specifically, projects must reserve 15% for very low income households, 10% for low income households, and 15% for households earning up to 120% of the area median income. Projects must satisfy a number of other requirements, including mandatory design standards and certain fee payments. While the program’s steep affordability requirements generated a lukewarm initial response, developers have subsequently found countless properties where the dramatic increase in FAR has presented attractive returns.
The City Council voted on February 14th to add an additional 688 acres of qualifying property to this popular program. While all FAR tiers were previously tied to Transit Priority Areas, which generally include the area within one half-mile of a major transit stop that is existing or planned, the Council revised the program to apply to “Sustainable Development Areas” which extend to a walking distance of one mile from transit stops in most instances.
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