ENCINITAS — The Encinitas City Council, despite reservations, voted unanimously on Oct. 24 to require further study of the impact of increasing the inclusionary ordinance — the amount of low-income housing that builders must include in new developments — before authorizing any changes.
The concern was that requiring a higher percentage of affordable units would deter builders from developing the high-density housing that’s intended to get Encinitas into compliance with state housing law.
The council did not arrive at the decision easily. Mayor Catherine Blakespear said during discussion, “To me it seems like we are running way down into the rabbit hole for a kind of fishing expedition for the Planning Commission.” The Planning Commission requested that further research be done after holding a public workshop based on an economic feasibility study’s preliminary findings.
Early results from that study by Keyser Marston Associates, Inc., indicated that Encinitas may be able to require, should Measure U get approved, that developers of sites upzoned for up to 30 units per net acre set aside either 25 percent of those units for low-income households or 20 percent to very low-income households. The currently proposed rate is 15 percent low and 10 percent very low.
Likewise, the study’s early findings supported increasing the citywide inclusionary ordinance for non-upzoned sites to 20 percent low-income or 15 percent very low-income from the current 15 and 10 percent, respectively.
Blakespear questioned whether authorizing an enhanced study was worthy of the city’s time and money. Deputy Mayor Joe Mosca and Councilwoman Tasha Boerner Horvath expressed similar misgivings.
In theory, the higher inclusionary percentages would help the city reach state housing quotas for various income levels, while reducing the number of market-rate units that get built in the process of making projects pencil out for developers.
But developers and the Building Industry Association of San Diego County contend that the increased rates are out of touch with the reality of market forces. Those assertions, plus the fact that most surrounding cities do not have inclusionary ordinances as high as what the consultants had suggested was feasible, caused both the Planning Commission and City Council to hesitate on approving the higher rates.
Councilman Tony Kranz said, “We seem to be pushing towards increasing that number to the point that we’re going to end up with no housing being built on this Housing Element if it passes or is imposed.”
About the inclusionary ordinance, Kranz said, “Frankly, if we jack it up and we hear crickets, then there are things that we can to do to remedy that, of course. But, ultimately, I would prefer to go slow and have as much information as possible.” Councilman Mark Muir agreed.
The council’s authorization for extended research will push the decision past the Nov. 6 election, which means that Encinitas voters will not know whether the inclusionary rate will go up when they cast their vote on Measure U. Measure U asks voters to allow upzoning to 30 units per net acre at select sites — with the main purpose being to build the amount of affordable housing mandated by the state.
During public comment, Peter Curry of Cushman & Wakefield recommended that the council listen to the tape of the last commission meeting to better understand the developers’ financial perspectives. Curry stated that the developers who own some of the sites eligible for upzoning can choose to build at the lands’ current zoning, such as commercial or office professional, should they find that higher inclusionary rates disincentivize the building of multi-family developments.
Curry further shared that Peter Stern, an outspoken opponent to Measure U, at the commission meeting “made the point that you can study all the numbers you want, but it’s really the market forces that decide and determine what’s going to happen and not happen.”
Keyser Marston Associates was originally going to be paid $65,000 to carry out the research, but now its approved compensation for the more extensive consulting work is $171,000.