SOLANA BEACH — A study conducted to help Solana Beach estimate the impact of market-rate housing on the need for affordable units — and how much it should charge developers for those units — is now available on the city website for a 30-day public review.
According to the city’s current inclusionary housing law, developers who build five or more units of market-rate housing must set aside 10 percent of the total units for very low or low income levels for 30 years.
The California Department of Housing and Community Development defines very low as making 50 percent of the area median income and low as making 80 percent. Depending on the number of people in the household that translates, in San Diego, to an annual income between $28,900 and $47,900 for very low and $46,250 and $76,700 for low.
In Solana Beach developers currently do not have the option to pay a fee in lieu of building the units. A Los Angeles court case last year determined laws such as the one in Solana Beach that mandate developers to build affordable housing for rental units were not valid.
An impact fee must be the primary requirement for rental housing of five units or more, not including condominiums that are built to sell individually.
Condominium developers in Solana Beach will still be required to set aside 10 percent of the units as affordable. The Los Angeles ruling also does not apply to for-sale single-family housing.
The underlying concept is that new households represent new income that will consume goods and services. That new consumption translates to new jobs, some of which will be low paying.
Those lower-paying jobs mean lower-income households that can’t afford
market-rate units in the city, creating a need for affordable housing.
The study quantifies the link between new-market units and the demand for affordable housing.
Paul Marra of Keyser Marston Associates, the San Diego economic consulting firm that conducted the study, said three prototypes were developed to help determine the maximum fee the city should charge developers.
He recommended the city charge per square foot rather than by unit. According to his calculations, Solana Beach could charge about $40 per square foot. Marra said that is one of the highest amounts he’s seen.
He said Santa Monica, which charges $20 per square foot, has the highest fee he’s seen. Most cities charge about $10,000 per unit.
To view and comment on the study, visit the city website. Once the 30-day comment period is over, staff will respond to all comments received and present the study to council members for a policy discussion on the fee schedule.
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