By Josh Cohen.
San Diego’s population is growing fast — nearly 16,000 people moved to the California city between July 2015 and June 2016, a roughly 1.5 percent increase — and the supply of housing hasn’t kept up with demand.
As with many U.S. cities, this has created an affordability problem. Since 2002, rents have increased 32 percent while the median income of local renters has decreased by 2 percent. There are nearly 9,000 homeless people living in San Diego County. According to a recent San Diego Housing Commission report, the city needs to almost triple the amount of housing it builds each year to meet demand.
For one solution, San Diego turned to the market, using inclusionary zoning to try to spur affordable housing development. This zoning tool, which is being deployed in various forms in cities throughout the U.S., typically allows developers to put up bigger buildings, with more units, in exchange for contributing in some way to a city’s supply of homes that rent below the market rate and are therefore affordable to a greater percentage of residents. For many years, San Diego relied on a statewide program, but in 2016, the city rolled out more incentives for developers and, according to one new report, the effort is showing promise.
California’s longstanding inclusionary zoning law allows residential developers to receive incentives, including approvals to build taller or with a bigger footprint, or to provide fewer parking spaces than typically required, if they provide a certain number of rent-restricted units. The ability to build higher or wider than zoning would otherwise allow is the centerpiece of the program. The bonus varies and depends on how many such units a developer provides and for what income level they are affordable. The maximum bonus is a 35 percent increase in density if 11 percent of units are rent-restricted.