March 12 2014 10:17 AM

He won the housing-fee battle; now he has to deliver an alternative

Kevin Faulconer
Photo by David Rolland

San Diego Mayor Kevin Faulconer and his allies in the business community last week defeated an attempt by the majority of the City Council and affordable-housing advocates to raise a fee that developers pay to help finance construction of low-rent housing. The council, faced with a ballot referendum on its decision, obviously believed it was a losing proposition and repealed its own ordinance.

CityBeat supported increasing the fee, formerly known as the "linkage" fee and now called the workforce-housing offset because it helps offset the demand that commercial development creates for low-wage-worker housing. Under city law, the fee is supposed to increase over time to keep pace with construction costs, but it's currently the same as it was in 1990. Faulconer and Co. were able to whip up fear and opposition to the fee hike by deceptively calling it a "jobs tax."

Well, it's dead—for now—and the pressure's on Faulconer and his pals to come up with an alternative. The good news is that the new mayor claims to want more subsidized housing.

"I'm a huge supporter of affordable housing," he said last week at his first media briefing as mayor. "The need is great."

OK. So far so good. He likes the idea but doesn't want commercial-building developers to pay for it. And even some advocates for affordable housing who were disappointed with the loss of the fee increase and angered by the flawed rhetoric used to defeat it were impressed with at least the thought that went into the Faulconer campaign's housing plan—which, considering the extent to which it involves Civic San Diego, the successor entity to the dearly departed Redevelopment Agency, was likely written by Civic San Diego officials.

In addition to the conventional conservative goal of reducing market-rate housing prices by increasing supply through lowered regulatory barriers (potentially scary), Faulconer's plan envisions updating community plans (expensive but critically important), working with Civic San Diego to create incentives for private investment in housing construction near transit corridors (good if the supporting infrastructure is adequate) and reducing parking requirements on developers in exchange for public-transit-oriented concessions (rage-inducing for people in cars but good for reducing the city's carbon footprint and fighting climate change). 

His plan also envisions lowering construction costs for affordable housing by convincing the state to streamline its process for allocating tax credits (we'll see) and encouraging construction in areas other than Downtown where land is pricy (fine, as long as there's nearby transit), facilitating more private investment through the Community Reinvestment Act (another Civic San Diego production) and pulling in more federal dollars through the New Market Tax Credit Program (great if successful).

Faulconer, during his media briefing, added that he plans to work closely with incoming state Assembly Speaker Toni Atkins, a former San Diego City Council member and passionate housing advocate. He should also make sure Susan Riggs is on speed dial—she recently left her post as executive director of the San Diego Housing Federation to become deputy secretary of housing policy for Gov. Jerry Brown. And if he really wants to help, he'll try to convince Republican lawmakers in Sacramento to support statewide affordable-housing legislation. Problem is, the business lobby statewide, just like in San Diego, doesn't want to chip in more money. Someone has to foot the bill.

So, sure, let's pursue all of these ideas, which we should be doing anyway. Dramatically increasing the supply of housing that's attain able for San Diego's low-wage workers will require a piecemeal, multipronged approach. Raising the workforce-housing offset was intended to simply beef up the city of San Diego's contribution to the effort, and, in Riggs' opinion, the extra cost was likely to have been absorbed within the development process without really affecting the companies that lease space.

CityBeat asked Faulconer if he'd commit to coming up with an alternative that would at least match the revenue or housing units that the offset fee would have generated, but even though the fee would have built only an estimated 100 to 150 more units per year (in addition to units built through other funding sources), he didn't want to commit to numbers.

Yet numbers are really all that matters, and if Faulconer genuinely supports affordable housing, 150 units as a replacement for the offset fee should be an absolute minimum. We eagerly await the plan. 

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