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City eyes condo conversions for affordable housing

DEL MAR — After hearing a proposal that could help bring its housing element into compliance with state requirements, City Council directed staff at the May 4 meeting to work with the Del Mar Housing Corporation to obtain data and identify potential affordable housing opportunities at the south end of Camino del Mar.
Don Countryman, representing the Housing Corporation, described a plan to create a permanent stock of affordable units by allowing owners to convert apartment buildings into condominiums, the majority of which would be sold at market value. A small percentage would be designated as affordable for a minimum of about 55 years. Most of the properties Countryman referred to are legal nonconforming buildings at the south end of Stratford Court.
Current codes prohibit the conversion of multiresidential properties with four or more units into fee ownership. “With that conversion there’s a large economic benefit to the owners,” Countryman said. “(They) would see a very significant increase in the value of their property.”
Countryman said the project would also benefit the city because it ties in with ongoing revitalization efforts, and it can be implemented using market-based funding so little or no public money would be involved.
Bud Emerson, a Housing Corporation board member and the only resident to comment on the issue, said he supports the idea. “I love proposals that have multiple wins, and it seems to me this has the potential for a whole lot of people to win,” he said.
“We can come out of this with something that we’ve always wanted, which is rental units that we can keep at an affordable level for people like teachers, city employees, firemen (and) students,” he said.
Owners would have an incentive to upgrade their properties, which would result in
higher assessments and increased revenue for the city. The city would have control over those units designated as affordable, and the private sector would get condominiums at a good price, Emerson said.
Council members also supported the plan. “I would certainly like to see us do something here,” Councilman Richard Earnest said, adding that the city has struggled for at least a decade or more with “precious few” properties to satisfy the housing requirement.
“I think this is an opportunity that we should move forward with,” Councilman Don Mosier said, adding that he would like to see a more detailed proposal. “There is a little lack of specificity on exactly what’s needed.”
Mosier said the real question is whether the plan is financially attractive to investors in the current housing and financial climate. “If the answer’s yes, then we should take advantage of that opportunity,” he said. “We’re missing grant opportunities by not complying with the low-income housing regulations.”
The state rejected Del Mar’s last housing element about two years ago. According to interim Planning Director Brian Mooney, the conversion plan alone won’t solve the compliance issue, but it “takes us a positive step in that direction,” he said.
Emerson agreed. “We’ve been pushed back because the people in the state don’t like our verbs,” he said. “We say, ‘We’ll consider, we may do this, we may do that.’ This could turn into an action verb that says, ‘We are doing this. We will do this.’”
Countryman was asking council to authorize a limited feasibility study that would include parking density and planning evaluations, a rental unit survey and a bedroom count. Mooney estimated the work would take about 60 to 80 hours of staff time to develop a detailed proposal within two months. Countryman said the Housing Corporation has already done some of the necessary work.
Councilman Carl Hilliard, who described the idea as very creative and something worth pursuing, said he was reluctant to commit time and money to a proposal with no guarantees.
“Conceptually it sounds like a great idea,” Hilliard said. “The reality is, if you have one unit it doesn’t make a lot of sense for us to spend an enormous amount of staff time.
“We’re going to get embroiled in a very lengthy process that’s going to have a lot of stops and snaps and … we won’t get the result,” he said. So in the end, rather than authorize a full study, council directed staff and the Housing Corporation to work together to identify interested property owners and obtain other necessary data.
Mooney said he has spoken with one owner who’s expressed interest in the plan.