SLO is proactive and serious about affordable housing

Housing cost ranks among the top issues of concern for residents of the city of San Luis Obispo. In fact, it was a driving reason why city residents and the San Luis Obispo City Council supported housing as a major city goal in our financial plan.

Factors driving up housing costs in our market are myriad, but it is certain that supply constraints contribute to the crisis. In spite of this challenge, affordable housing is being developed at a faster rate in the city of San Luis Obispo than in any other part of our county.

Between 2005 and 2015, 749 units were constructed in the city; 177 of those units were affordable. In other words, over the past 10 years, 24 percent of all units constructed in the city were affordable to working households.

These are units that are legally restricted for use by households that meet certain income eligibility criteria. For example, a moderate income household with three members can earn up to $84,000 a year from all earners. The restricted sales price for an affordable, two-bedroom home is currently about $290,000. All new development in the city contributes to delivering these units, either by paying a fee into the city’s affordable housing fund or by building the units as part of a mixed-income project.

Affordable housing isn’t normally controversial in the city. Affordable housing incentives have been a component of state law for many years and are nothing new for city decision-makers. The city’s rules (zoning ordinance) include affordable housing incentives that go beyond minimum requirements of state law.

For example, the City Council approved an 83 percent density bonus for the Del Rio Terrace project — which provides affordable housing for seniors and was constructed by the Housing Authority of San Luis Obispo — and an 80 percent density bonus for 860 on the Wye, HASLO’s veterans’ project.

State law only requires a 35 percent density bonus for affordable housing projects, but the city allows an additional density bonus as one of the incentives it offers to developers of affordable or mixed-income projects that provide a qualifying percentage of affordable units. There are a number of other projects that have provided much-needed affordable housing that are mixed with market rate units where incentives have been provided.

It is worth noting that state law mandates approval of projects that include affordable housing units unless a direct public safety or health risk can be proven. This is true for both 100 percent affordable projects and mixed-income projects. The protections and requirements established in state law for projects that fall under the density bonus law and the Housing Accountability Act are going to become increasingly relevant as more projects come forward meeting the protections offered by the state.

Recently, the 22 Chorro project provided a case in point.

The City Council approved the use permit for 22 Chorro project, allowing the density bonus and height exception after considerable testimony both for and against the project. The concerns from opponents of this project include impacts on parking, overlook and privacy, noise, diminished views and concerns about the safety of the Chorro/Foothill intersection. As part of the city’s comprehensive review process, city staff reviewed all of these issues and required the developer (within the constraints of state law) to modify the project to address concerns. Changes included improvements to the intersection and reducing the height of the building next to the existing residences, among others.

However, under state law, in order to deny a qualifying affordable housing project, the city must determine there are specific “adverse impacts.” This means there must be a significant, quantifiable, direct and unavoidable impact, based on objective, identified public health or safety standards, policies or conditions. In the case of 22 Chorro, this presented a very high bar for denial and the City Council made an important and difficult decision to approve the project and adhere to the limits of its discretion under state law. This action also protected the city from liability for acting outside of the state law.

Although there were many speculative concerns raised about what might happen if the project was approved, no sufficiently quantifiable or objective information was provided that would allow the city to deny or substantially change the project. Even where a project has inconsistencies with the city’s General Plan, state law directly and expressly prohibits denials based only on policy or zoning ordinance noncompliance and, in fact, requires waiver of those standards to facilitate housing project approvals.

Infill properties that present opportunities for housing development are becoming increasingly scarce. This is due in part to the city’s superior environmental, anti-sprawl and greenbelt protections. The city is driven by sound policy to maintain a compact urban form, making the remaining infill sites increasingly valuable for their ability to provide needed housing. As a result, the constraints and mandates of state law will increasingly be at the forefront of future decision-making about housing projects. Nonetheless, these projects will add to the housing stock — both affordable and market rate — in a way that will help the city achieve a major goal as called for by many city residents.

This story was originally published November 12, 2016 at 8:32 PM with the headline "SLO is proactive and serious about affordable housing."