The proposed 580-home San Luis Ranch development off Madonna Road and Highway 101 in south San Luis Obispo may be headed to approval, judging from the comments of City Council members Wednesday night.
In front of a packed audience at City Hall, the council generally supported the project that would develop 40 acres of the 131-acre site for housing and set aside nearly half the total space — 60 acres —for organic farming and open space. Anyone who wants to buy a home must already live or work in the city to have first dibs.
The project also calls for a 200-room hotel, about 200,000 square feet of commercial space and 150,000 square feet of office space.
The meeting was the first of two scheduled to discuss the proposal submitted by developer Gary Grossman. The next one will be July 18.
Council members Carlyn Christianson, Dan Rivoire and Aaron Gomez said the project would bring needed housing to a city where 30,000 people commute each day from out of town. They supported its balanced vision of housing, agricultural space, bicycle and pedestrian pathways, and infrastructure upgrades.
Christianson said that many homes on the market now cost around $1 million and this project offers a much cheaper alternative. Grossman has said the homes will range in price from about $350,000 to $600,000 in today’s dollars.
“The reality is that not all 30,000 people who commute in every day will be able to live in San Luis Obispo, but some folks will,” Christianson said.
But Mayor Heidi Harmon said she remains concerned that the homes may not be affordable to the average working person and wants to pursue options to ensure that costs are kept down.
Council member Andy Pease recused herself, saying she had contracted with RRM Design Group, the project architect, within the past year.
The phased project calls for 282 single-family units with two-car garages and 298 multi-family units. Of those, 34 deed-restricted affordable units would be integrated into the neighborhoods, designated for various levels of qualifying low-income residents.
About 50 people spoke at the meeting, with the majority calling for more workforce housing to help relieve a tight market. Critics cited concerns about the potential home prices, traffic and a lack of a need for more commercial space, citing local big box store shutdowns such as Sears and Forever 21.
Harmon said that her goal would be to help the developer achieve his financial goals while also ensuring affordable pricing for constituents, possibly by adding higher density.
“What I’d like to see is a two-parent working household have an expectation that they can work hard, be a major contributor to the community and be able to afford living here,” Harmon said in a telephone interview with The Tribune on Thursday. “Right now, many families are telling me their kids and grandkids who grew up here can’t afford to come back home.”
The proposal currently satisfies state statutory requirements for affordable, deed-restricted units, and it allows for accessory dwelling units, just as such units are permitted on single-family home lots throughout San Luis Obispo. Such ADUs would be in addition to the current buildout of 580 homes. But the council could add additional requirements for more deed-restricted homes or ADUs into the development agreement.
Harmon said the development agreement negotiations between the city and Grossman’s team are ongoing and could incorporate some of those ideas, and wanted to keep the options open-ended.
Community Development Director Michael Codron also said that the city could potentially negotiate a specific number of units with a fixed sale price that is affordable to a workforce household, for those earning between 120 percent and 160 percent of median income.
Grossman plans to contribute $30 million to $50 million toward onsite and off-site infrastructure, including new streets and utilities in the development, in addition to his fair share of offsite improvements such as the Prado Road overpass (which is in the planning stages under Caltrans review).
The city is analyzing his ability to cover those costs, and an update is expected on July 18.