San Diego is reviving its attempt to require housing developers to build more low-income units with a new compromise proposal that is backed by a broad coalition of business groups, labor unions and community leaders.
The controversial legislation, called an “inclusionary housing ordinance,” was narrowly approved 5-4 by the City Council last summer, but Mayor Kevin Faulconer vetoed it because the business community opposed it.
A compromise proposal crafted by Council President Georgette Gomez in the wake of that veto has prompted the business community to switch its position, which is expected to persuade the mayor to not issue another veto.
The City Council is scheduled to consider the compromise proposal — which softens some requirements but toughens others — during a public hearing scheduled for 2 p.m. Tuesday at City Hall, 202 C. St.
“I’m very optimistic that this ordinance is going to get adopted by my colleagues, and I’m hoping that the mayor does not veto this ordinance,” Gomez said during a Monday morning press conference outside City Hall.
Gomez said she had not spoken with the mayor directly, but that his staff was present during compromise talks and “they’re very much aware of where we are.”
A spokesman for Faulconer said the legislation appeared to be heading in the right direction but was unwilling to guarantee there won’t be another veto.
If any of the four council members who voted against the law last summer decides to switch their vote because the business community is now in support, the mayor will not be in position to successfully veto it. Vetoes by the mayor can be overridden by a 6-3 council vote.
The business community said the previous version of the ordinance was a “tax on builders” that could worsen housing problems — instead of helping to fix them — by making projects financially unfeasible.
Leaders of the business community said Monday that the new proposal is a significant improvement.
“This compromise represents a balanced policy approach that considers the economic realities of home building but also leverages that investment to grow our affordable housing stock,” said Jaymie Bradford, chief operating officer of the San Diego Regional Chamber of Commerce.
In addition to the chamber, two other organizations also switched their position: the local chapter of the Building Industry Association and a commercial real estate group called the National Association of Industrial and Office Properties.
The compromise proposal would require developers to make 10 percent of the units in a housing project affordable to families making 60 percent of the median income, a tougher standard than the current 65 percent.
The previous proposal had required the income threshold to be 50 percent, so switching to 60 percent is a significant compromise.
Gomez has also agreed to phase the requirement in over five years instead of three, and to allow projects to follow the older, less aggressive policy if city planning officials have deemed a project application “complete” by the time the new legislation takes effect.
But she also toughened her proposal by increasing the fee that developers must pay if they choose not to meet the standards of the city’s inclusionary housing law, which dates back to 2003.
The previous version set the fee at $22 per square foot of their project, but the compromise proposal sets the fee at $25. Business leaders lobbied for a fee of $18 per square foot during the summer.
Under the city’s existing inclusionary law, developers must pay $12.73 per square foot. So the compromise proposal would nearly double that.
City officials collect the fees and use them to build or subsidize affordable housing projects.
Labor leaders, who have supported both versions of the proposal, said Monday they are pleased to see the policy appears to be headed for approval.
“After decades of gridlock, this policy is a critical first step toward building housing working people can afford — in every neighborhood,” said Keith Maddox, leader of the San Diego & Imperial Counties Labor Council.
Ramla Sahid, executive director of the nonprofit Partnership for the Advancement of New Americans, said this compromise between business, labor and community leaders could serve as a model for resolving other local disputes.
Gomez said she was grateful to all the groups who came together to craft the compromise.
“Because of the cost of living here in San Diego, this policy is even more important than ever before,” she said.
But Gomez stressed that the new policy won’t solve San Diego’s affordable housing crisis on its own.
“This is one tool in the toolbox,” she said. “We need to do much more, and we all recognize that.”
Other city efforts to spur more affordable housing include streamlined regulations, density bonuses for projects with low-income units, and allowing developers to build projects without parking spots to reduce construction costs.
In addition, the city has loosened rules for construction of granny flats and live-work spaces.