Fixing the Inclusionary Housing Law

The San Diego City Council has an opportunity to affirm its commitment to solving the affordable housing crisis for the city’s working families.

Last week, responding to a lawsuit by the Building Industry Association, a Superior Court judge invalidated the city’s inclusionary housing ordinance on a technicality, and an apparently thin technicality at that. The judge gave the city the language it needs to fix the ordinance, and that should be done immediately.

In 2002, housing advocates and the City Council came to the table in good faith, seeking workable solutions for all stakeholders. It’s now clear that the BIA was not sincere in its commitment to build homes for all San Diegans. It has not acted in good faith.

When the City Council considered the first inclusionary housing ordinance, the council brokered an agreement between the housing advocates and the BIA to water down the ordinance. When the ordinance was passed, the BIA promptly went to court to have it overturned.

The BIA went to court a second time when the City Council agreed to a settlement that resulted in even lower in-lieu fees. The BIA then demanded that additional items be included in the settlement. So back to court it went.

The inclusionary housing ordinance needs to be legally amended – but it also needs to be strengthened so that real affordable housing gets built. The City Council has a chance to get it right – to craft an ordinance that creates housing that San Diegans can afford and puts in place an action plan to address the housing crisis.

It can adopt a second amendment to the ordinance to require the construction of affordable housing and eliminate the in-lieu fees altogether. We can say to builders: Either build your entire project affordable to households earning less than $90,000 per year or build at least 10 percent of it for families earning less than $32,000 per year.

Despite arguments being put forth by opponents of inclusionary housing, it has had an impact in San Diego and across the region.

In Carlsbad, Chula Vista and San Marcos, inclusionary housing ordinances have been an extremely effective tool in making housing affordable to working people. The builders in these cities are required to build the units, and consequently more than 4,000 homes have been created that are affordable for the working class. These are 4,000 homes that would not have been built without strong inclusionary ordinances.

In San Diego, the BIA has stated that the cost of inclusionary has been added to the price paid by the home buyers. The truth is the builder does not set the price of the homes it sells, the market does. For the last five years, the market has been willing to pay much more than the original asking price of the builders. Profits have been at record levels, not because the builders asked for those prices, but because the buyers bid them up. In the hot real estate market we’ve experienced in San Diego, it’s a little hard to imagine builders saying they don’t want to accept what the market will pay because their profit margin will be too great.

Furthermore, builders do receive subsidies from the city for complying with the law. They qualify for density bonuses and additional waivers on development requirements. They qualify for expedited processing, which can save them six months to a year in planning. And their large projects even qualify for federal, state and local financing subsidies. As matter of fact, seven of the nine rental housing allocations from the 2002 state housing bond have helped finance inclusionary housing developments in the county.

The BIA argues that inclusionary zoning does not help the affordable housing crisis. We agree. The city of San Diego’s current ordinance is not as effective as it could be because the builders negotiated a compromise that drove the in-lieu fees so low that the fees are insufficient to construct the inclusionary units or serve as an incentive for the builders to build them.

In the midst of the legal and political rhetoric, the hundreds of thousands of families who are experiencing the deep economic pressures of the housing crisis have only one question: When are we going to get serious about building housing for San Diego’s working families?

Akinfosile is co-chair of the San Diego Organizing Project. Cohen is executive director of the Center on Policy Initiatives. Lawrence is president of the Affordable Housing Coalition.

Copyright Union-Tribune Publishing Co.

Issues: Responsible Development | Campaigns: Inclusionary Housing Policy |