Encinitas looks to update inclusionary housing ordinance

Developers may have to set aside 15 percent of a project’s housing units for low- and very-low-income tenants — up from the current 10 percent — under forthcoming updates to a housing ordinance that the Encinitas City Council is expected to tackle in the next few weeks.

The city council and planning commissioners met March 7 with a panel of local housing experts — including Paul Barnes, local resident and division president of Shea Homes San Diego; Sue Reynolds, president and CEO of the nonprofit Community Housing Works; Jim Schmid, founder and CEO of Chelsea Investment Corp. and representative of the Building Industry Association; and Debbie Fountain, housing and neighborhood services director in the city of Carlsbad — to discuss updates to the city’s inclusionary housing ordinance, which currently mandates that developers allot 10 percent of market-rate developments for affordable housing or pay an in-lieu fee. Developers must set aside 15 percent in other cities like Carlsbad.

“The fundamental question we’re trying to answer is what combination of inclusionary policies is likely to create the most high-quality units for low and very low incomes,” said former council member Lisa Shaffer, who led the three groups through the dialogue.

Carlsbad’s policy, which it adopted in 1993, has been effective, said Fountain. It requires housing developers, building seven units or more, to provide 15 percent of their total units as affordable to low- or very-low-income households. Those who are building six units or less are mandated to pay an in-lieu fee.

“The key to the success is it’s mandatory that affordable units be built,” Fountain said. “They can’t just pay a fee into a fund.”

Since adopting this policy, Carlsbad has built more than 2,000 affordable units, Fountain said. Between 2010 and 2017, the city built 42 units for very low incomes, 213 units for low incomes and 56 units for moderate incomes.

The panel, city council and planning commission seemed to agree that Encinitas should look toward Carlsbad’s policy as a model.

They also suggested that Encinitas look into implementing the following ideas in its draft inclusionary housing ordinance:

• Accessory dwelling units should be used to meet affordable housing numbers.
• In-lieu fees should apply to specific development projects that are proposed and have a written agreement but not built yet.
• Processes should be streamlined to reduce costs that don’t add value to housing.
• Parking requirements should be reduced for affordable units.
• Payments of impact fees should be deferred so they don’t all have to be paid up-front.

City staff said at the conclusion of the meeting that they would work to draft an ordinance from the panel’s suggestions and further study some of the ideas. They expect to bring that draft ordinance back to the city council within the next month.