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City’s affordable housing hopes still in a lurch

ENCINITAS — The Planning Commission refused to accept a complex plan to satisfy the city’s affordable housing requirement at the subdivision referred to as Nantucket I and II in Leucadia. Rather, the commissioners voted unanimously against staff’s recommendations on Dec. 2.
The now largely abandoned subdivision bordered by Sheridan Road and Andrew Avenue has been controversial since its inception.
In 2004, the property was subdivided leaving two developments with nine lots each. However, according to the state’s density bonus law, an affordable unit was required to be built in each subdivision.
The city imposed certain conditions, such as withholding the certificate of occupancy to the market rate homes until the affordable units were built.
The owner and developer of the property, Barratt American, built eight market rate homes in the first subdivision, but left the affordable housing unit, required on Lot 8, empty. Three homes are partially constructed on the second subdivision while the remainder of the property is vacant.
In 2007, the lender on the project, Bank of America, foreclosed and construction came to an abrupt halt. Barratt American filed for bankruptcy in 2008.
As if matters weren’t complicated enough, Barratt American separated title of the two affordable units from the remaining homes in the two subdivisions. As a result, the affordable unit in the second project, Lot 4, is under control of the trustee of the bankruptcy court. However, it is held under covenant to remain an affordable unit. City Council would have to approve removal of such a condition.
Much of the property in the unfinished subdivisions lay fallow, as weeds and debris infest the area. Neighbors have also complained that the eyesore brings down property values and invites vandals.
The applicant recently purchased the property and wants to complete construction on a project that has sat vacant for two years. Yet, the commission was unconvinced that the new owner, ELN, LLC, would be able to satisfy the affordable housing requirements.
“Why don’t you
just build this yourself?” asked commissioner JoAnn Shannon.
When the applicant responded that discussions with nonprofit agencies had gone very well, she was still unsatisfied that the unit would be built.
The applicant was also willing to deed Lot 8 to the city in perpetuity and kick in $10,000 for construction of the 2,000-square-foot affordable single-family home and a 600-square-foot accessory unit.
Density bonus affordable housing is only required to be maintained as such for 30 years.
Senior City Planner Kerry Kusiak told the commission the situation was unusual. “The solution proposed by the applicant is intended to solve the issues presented in this particular set of circumstances,” he said. “This is not intended to set a precedent.”
Kusiak said in a later interview that there were lessons learned from the project. “These were the first two density bonus projects that the city did,” he said. “Some of the issues have come from inexperience. We do it better now, we get the (affordable) units early on in the process and the conditions are more specific.”
The applicant has 10 days to appeal the commission’s decision to City Council.