Agenda - Planning Commission - 11/02/2006

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NEWS BRIEFS INCLUSIONARY ZONING IN SAN DIEGO: SECURE AT LAST? By David Morley The City of San Diego and developers appear to have finally resolved a four-year legal battle that threatened to invalidate the city's inelu. sionary housing ordinance. The settlement, approved by the city council on July 25. reinstates several provi- sions favored by developers in exchange for an end to court proceedings against the city. In 2002, the city council voted to adopt an inelusionary housing ordinance as part of its response to a mounting crisis of housing affordability. The ordinance ineluded a 10 per- cent set-aside requirement for all new devel. opment, but provided developers with the option of paying an in.lieu fee instead of set- ting aside affordable units. It also ineluded several exemption provisions; ineluding exemption of units sold to owner-occupants with no other property earning 150 percent of area median income or less. At the time, San Diego was probably the largest city in the country to adopt such an ordinance. Almostimmediately, the Building Indus- try Association (BIA) of San Diego filed suit against the city. The organization elaims to represent Olrer 1,400 developers and. accord- ing to its web.site, "has been described as 'arguably one of the most powerful interest groups in San Diego:" For the next four years, the case has gone from court to settlement proceedings and back again. Agreement between the-city council and developers seemed at hand this past April when the council suddenly backed out over a provision that would have allowed the suit to resume if the city made any changes to the ordinance within two years. Some council members felt that the in-lieu fees were too low and had proposed removing them. which would have forced developers to comply with the 10 percent affordable set- aside requirement. Had the city accepted the settlement with the no.amendment provision it would have forgone the option of annulling in:lieu fees for at least another two years. By not accepting the settlement, how. ever. the city landed itself in court again. On May 24. Judge John S. Meyer delivered his ver- dict against the council. finding the ordinance unconstitutional because it did not allow developers to argue that their projects did not contribute to the affordability crisis and should thus be exempted. According to the San Diego magazine City Beat, while the court battle "was similar to law- suits filed by building-industry groups in other cities and counties that have i nelusionary hous- ing laws. . . San Diego's is the only lawsuit developers have beaten in court." The ruling led to a brief split within city government. While the council vowed to con- vince Judge Meyer to overturn his original rul. ing at a second hearing on July 14, city attor- ney Michael Aguirre argued for a quick amendment to incorporate the exemption the The inclusionary housing ordinance was ruled unconstitutional because it did not allow developers to argue that their projects did not contribute to the affordability crisis and should thus be exempted. judge had found lacking. The council later decided (once again) to attempt a settlement with the building industry out of court, and on July 25 a compromise was reached. The new compromise is similiar to the com- promise announced in April. One key provision is that in-lieu fees will be calculated when develop- ers submit pennit applications rather than when issuing building penn its. Since the fees were designed to increase over time builders will be able to save money if the fees are assessed ear- lier in the process. The two-year moratorium on amendments to the ordinance has also been reinstated. Many inclusionary housing proponents have reluctantly accepted the new settlement. Councilwoman Toni Atkins said that while she was "not particularly happy [the city is] in this position, and that [San Diego] inelusionary housing ordinance has been challenged. . . it's important we preserve the constitutional. ity of.the ordinance." Nico Calavita. professor of city planning at San Diego State University and a founding member of the San Diego Housing Coalition, concurs: while the city could forego elose to $10 million in affordable housing financing under the settlement, the inclusionary ordinance will be preserved. Other cities with inelusionary housing ordinances have encountered less heated opposition from developers despite the imposi- tion of more onerous demands. In Berkeley, California, the affordable set.aside ratio is 20 percent. Calavita attributes San Diego's pro- longed and heated controversy to a more aggressive, conservative building industry. The 5an Diego Housing Coalition had initially sought support from the BIA of San Diego when it was lobbying for the inelusionary ordinance, but the latter was fundamentally opposed. In the Bay area, by contrast. initial confrontation between the Home Builders Association of Northem California and the housing advocates eventually led to a joint policy brief that agreed on the basic tenets of inclusionary housing. David Morley is a researcher with the American Planning Association VOL ,~3, NO. 'j Zoning P,actice is a monthly publication of the l'\mcrkal1 Ptatwing Assodat!on. Subscriptions are "va;iante for $75 (U.S.) and $-.00 (foreign). W. ?'_wl farmer, 'i.IC? L';ecutive Director; Wiiliam R. H.tP.ifi, ,:':'il...fJ1 Dj!t~c::{)r af Research. Zoning Practicq (ISSN 1548-0135) is produced at APA. Jim Schwab. ;,ICP, Editor; Michael Davidson, Guest Editor; Julie Von Bergen, Assistant Editor; Lisa Barton, Design and Production. Copyright {9zoo6 bV American Planning Association, 122 S. Michigan Ave.. Suite_16oo, Chicago. II. 60603_ The American Planning Association also has offices at 1776 Massachusetts Ave., I~.W., Washington, D.C. :0036; I.NIN'lv.plJnning.org. All rights r~served. N0 ~ilrt oj tllis publication may be ":prfJcluC~d O)r utilized in any form or by any means, electronic or mechanical, including pil0toCOpyins. recording, or by any information storage and r2[rieval system, without permission in writing from tile Am~rican Planning Association. P"illL:'": 'i": ::;;c.:,..~~.j ;.i,::lper. ~r:d~G:i1g: ~.t)~:ro':';J ;'ety~ '~:.f:~~ '~~:.:::r .;~:d .~;~~. )lj5h.j~:s~un~r ....!a~te_ ZONINGPRACTlCE 9.06 AMERICAN PlANNING ASSOCIATION I page 7 61