San Diego Land Use and Housing Committee Meeting - January 16, 2019

The Land Use and Housing Committee of the San Diego City Council met on January 16, 2019, at 10:00 AM. The meeting was chaired by Councilmember Moreno (with Vice Chair Ward presiding over the consent agenda due to Moreno's recusal). Members present included Councilmembers Ward, Campbell, Sherman, and Moreno. The committee addressed a consent item, a major discussion on housing reform, and three action items, all of which were approved unanimously.

Consent Calendar

• Item 1 – Sale of City-Owned Land at San Isidro: Approved 3-0 (Chair Moreno recused). The sale of city-owned land at the southwest corner of West San Isidro Boulevard and Derrymart Road to Left Coast Investment Inc., including reservation of easements for water pipelines and utilities.

Public Comments & Testimony

Non-Agenda Public Comment:

• Joy Sunyata (District 3): Suggested deleting the word "homeless" from the city's vocabulary, arguing it implies "less than." Shared personal experience of choosing homelessness for four years.
• Martha Welch: Criticized the city's use of AMI, claimed downtown towers are empty, and alleged mismanagement of HUD money by the county.
• Terri Ann Skelly: Expressed dismay over the proliferation of marijuana production facilities (MPFs), citing community shock at the approval of 40 business locations and the negative impact on youth.
• Peggy Walker: Opposed an MPF on Pickwick Street in City Heights, noting its proximity to drug treatment centers and calling for more sensitive land-use decisions.
• Kathleen Rhodes: Asserted that the San Diego Housing Commission has $324 million in unrestricted net position and that the city is "rich enough" to house every homeless person. Called for an independent forensic audit of housing funds.

Public Comment on Housing Reform (Item 5): 29 speakers addressed the committee, representing a wide range of stakeholders. Key positions included:

• Lori Pfeiffer (Housing New Matters/Habitat for Humanity): Supported lowering parking standards near transit, specific plans for transit stations, and the climate action plan.
• Stephen Russell (San Diego Housing Federation): Recommended an informational item on local land-use policies that could increase eligibility for state housing funds (Prop 1, 2, SB2).
• Matt Adams & Guy Asaro (Building Industry Association): Urged decisive change, citing a 50,000-unit shortfall under the 2010 RHNA. Proposed regulatory streamlining, CEQA reform, self-certification, and fee restructuring.
• Colin Parent (Circulate San Diego): Advocated for citywide policies over community plan updates, noting the 2016 density bonus increased citywide capacity by 11% vs. 4% from four community plans.
• Craig Benedetto (NAIOP): Called for elimination of height limits outside the coastal zone, programmatic EIRs, and reduced parking requirements. Opposed new regulations that would increase costs.
• Dr. Murtaza Baksamusa & Carol Kim (Building Trades): Highlighted the need for skilled workers, stagnant wages in residential construction, and the importance of prevailing wage and union apprenticeship programs to create middle-class careers.
• Keith Maddox (Labor): Noted that only 33 moderate-income units were built out of a needed 15,000, and stressed the need to build across all income levels and neighborhoods.
• Jonathan Siegel (Architect/Developer): Called for eliminating discretionary processes (Process 2, 3, 4) and standardizing engineering requirements. Opposed community input on form-based projects.
• Molly Kirkland (Apartment Association): Opposed additional regulation like rent control, which she said creates panic. Suggested using rental business tax revenue for displacement or affordable housing funds.
• Joe Locava (Build Better San Diego): Resubmitted 2017/2018 policy recommendations, including mandatory inclusionary housing. Criticized reliance on private investment for public housing needs.
• Rick Bates (Unite Here): Noted that hospitality workers cannot afford housing near their jobs and urged adoption of inclusionary housing reform.
• Stephanie Benvenuto (Chamber of Commerce): Supported the mayor's proposals, including middle-income housing bonus and parking reductions. Asked for data on lost units due to CEQA.
• Betsy Brennan (Downtown Partnership): Supported by-right development and praised the downtown Civic process. Asked for flexibility in parking maximums.
• Haney Hong (Taxpayers Association): Emphasized the need for data-driven housing policy.
• Jeannie Crescenzo: Argued that affordable housing must include those earning less than 30% AMI, and that trickle-down housing has not reduced rents in her neighborhood.
• Brian Pease: Urged adoption of the 2017 Build Better San Diego letter, including tenant protections and source of income discrimination (already passed).
• Rafael Bautista (Tenants Union): Demanded rent control at 2%, criticizing the council for inaction and calling the mayor "do nothing."
• Julie Corrales: Proposed the city build its own housing, create overlay zones for affordable housing, and extend eviction notice periods for long-term tenants.
• Susan Baldwin: Called for a stronger inclusionary housing ordinance requiring on-site construction of affordable and moderate-income units in large projects.

Discussion Items

Item 5 – Housing Reform Discussion (Taken First): Chair Moreno opened the discussion, stating the housing crisis is the committee's top priority. Public comments were heard for over two hours. Committee members then offered their own priorities:

• Councilmember Ward: Emphasized setting housing goals by community, incentivizing development in willing neighborhoods, using programmatic EIRs, monitoring state action, addressing DSD staffing shortages, and preserving existing affordable housing. Also called for city-owned property to be used to underwrite development costs.
• Councilmember Sherman: Noted that 47% of housing costs come from government regulation. Proposed companion unit fee reductions, commercial flexibility, middle-income density bonuses, community planning group reform, restructuring impact fees (per square foot instead of per unit), and self-certification.
• Councilmember Campbell: Supported efficient permitting, mandates for affordable and middle-class housing (eliminating in-lieu fees), a city bank for housing funding, assistance for workers (police, fire, teachers) with mortgages, and careful consideration of height limits in context of neighborhood character.

Item 2 – Contract with Energy Center San Diego (NRG) for Chilled Water: Staff presented a 20-year contract (with two 5-year renewals) to provide chilled water to 1200 Third Avenue and 101 Ash Street. The alternative (repairing the chiller plant) would cost $900,000 in repairs plus $1.7 million in replacement, with annual maintenance of $120,000. The NRG system is projected to save $12.4 million over 20 years. The contract was approved unanimously.

Item 3 – 20-Year Nonprofit Agreement with Educational Enrichment Systems (EES): EES has operated a subsidized child care center at 2360 East Jewett Street since 1998, serving 2,500 children. The lease extension includes a new playground funded by grants. The city requested a waiver of council policy 700-12 to allow below-market rent. Approved unanimously.

Item 4 – Two-Year Extension of Stadium Naming Rights for SDCCU Stadium: The city will receive $1.5 million for two years (Dec 31, 2020) from SDCCU, up from $500,000 for the previous 15-month term. Fox Sports will receive a 22% commission. The contract includes a right of first negotiation. Approved unanimously.

Key Outcomes

• All action items (Items 2, 3, 4 and the consent item) were approved unanimously.
• The housing reform discussion was informational; no formal action was taken. Chair Moreno will incorporate public comments and committee priorities into the 2019 work plan, to be presented at the next meeting on February 6, 2019.
• The committee will continue to evaluate policy proposals including parking reform, inclusionary housing, density bonuses, and process improvements.