MTS officials recently authorized negotiations with a development team seeking to build affordable housing on an underutilized trolley station parking lot. If approved, the proposal would more than triple the number of middle-income homes approved in San Diego since 2010.
This comes less than six months after MTS updated its real estate policy to encourage more housing near transit stations—an effort that appears to be showing some results.
The plan for the Palm Avenue station parking lot came from National CORE, a nonprofit affordable housing developer, and Malick Infill, a for-profit firm specializing in transit-oriented development. The team is proposing 150 homes for low-income households and 100 homes for middle-income households, along with retail and commercial space and parking for trolley passengers.
The MTS executive committee voted March 14 to start negotiations with the development team, after a 30-day window in which staff sought competing proposals but received none. The development team declined an interview request while negotiations are ongoing.
San Diego is producing less housing for the middle class than any other income group, according to a 2018 report from the San Diego Housing Commission. Since 2010 the city has permitted only 33 new homes reserved for moderate-income households, defined as those making between 80 and 150 percent of the area median income. For a single person, that translates to earnings of between $54,500 and $85,875.
The 100 middle-income homes in the plan would be mostly studios and one-bedroom apartments. The low-income homes would be a mix of one-, two- and three-bedroom apartments for seniors, veterans and families earning between 30 and 60 percent of area median income.
The update to MTS’ real estate policy, approved last October, sets a goal that 20 percent of homes built on MTS-owned land be affordable to low-income households. MTS CEO Paul Jablonski said in the past, staff were mostly interested in market-rate housing development because that generally brought in the most revenue from lease agreements.
“But what we found was that doing market-rate housing didn’t necessarily translate to transit riders,” he said. “With the whole affordability discussion occurring in places like San Diego, we began to think maybe our approach to our own properties, to our own transit-oriented development, should be geared more toward affordability.”
As MTS enters talks on the Palm Avenue proposal, the agency is also moving forward or completing transit-oriented development plans elsewhere in San Diego. Villa Encantada, a project with 67 affordable apartments at the Encanto/62nd Street trolley station, opened last year. The apartments are now full, and some 2,000 families put their names on the interest list, MTS spokesman Rob Schupp said.
Executive committee members this month also authorized a competitive bidding process for a parcel of land right next to MTS’ East Village headquarters. A feasibility study presented to the committee found the land could support more than 960 new homes, assuming 20 percent were affordable to low-income renters.
And staffers are negotiating with another team of developers, Affirmed Housing and Greystar, to construct 185 affordable homes and 240 student apartments at the Grantville trolley station.
All that development activity is satisfying to Colin Parent, executive director and general counsel of the nonprofit Circulate San Diego. Parent authored a study in 2018 calling for MTS to update its real estate policy, and many of the report’s recommendations were followed.
“It is great to see Circulate’s research and advocacy resulting in the transformation of empty parking lots into affordable homes,” Parent said. “MTS is taking the right steps to make better use of public assets.”