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San Diego City Council Fails To Override Mayoral Veto On Inclusionary Regulations

Construction crews work on a 24-unit apartment building in North Park, July 2...

Photo by Andrew Bowen

Above: Construction crews work on a 24-unit apartment building in North Park, July 23, 2019.

The San Diego City Council failed Tuesday to override Mayor Kevin Faulconer's veto on a set of amendments to the city's regulations on what percentage of a housing development's units must be reserved for low- and moderate-income tenants.

Only five council members voted to override the veto, with six votes needed to overturn it. Faulconer vetoed the amendments last month after the council held a second vote to ratify them.

The amendments to the city's "inclusionary housing" regulations would have required developers to lease or sell up to 15% of a development's rental and for-sale units at below-market rates capped at certain percentages of the county's area median income for a family of four.

Developers also would have had options to build the requisite affordable units at a separate site by paying an "in-lieu" fee, albeit with fewer incentives. The amendments would have increased the current $12.73 in- lieu fee per square foot to $22 per square foot by the start of the 2023 fiscal year.

RELATED: Faulconer To Veto Council’s Affordable Housing Policy Proposal

Local developers argued that the amendments would lead to fewer housing units rather than more and an exodus of developers to friendlier markets for development like San Antonio, Texas.

"We need to make sure that we get to a point where it's an equilibrium," Councilman Scott Sherman said. "We have enough fees to pay the things we need to pay for the community but it also makes it a lot easier to build housing in that middle market that is so desperately needed."

In his veto statement, Faulconer agreed with the developers and a group of local housing experts who opposed the amendments.

After the override vote, Councilwoman Georgette Gomez, the chief supporter of the amendments, offered to compromise by altering two facets: developers would be required to lease 10% of a development's rental units at or below 60% of the county area median income for a family of four rather than 50%, which was originally proposed.

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Gomez also offered changing the in-lieu fee cap from $22 to $25 with a longer, four-year phase-in rather than the original three-year proposal.

"The bottom line is that we need to have an update to an inclusionary policy that, as previously stated, was adopted in 2003," Gomez said. "The conditions in which we are now living are completely different and the pressures are definitely stronger than what they were in 2003."

City Council members Vivian Moreno and Mark Kersey, who voted against the amendments both times and against the override, previously suggested they could flip their votes if similar changes were made. A sixth vote would also enable the council to override another potential veto from Faulconer on the revised policy.

However, Moreno and Kersey voted against considering the tweaked amendment package at a future council meeting. The council voted 5-4, again, to post an already completed feasibility study of the revised amendments online for 30 days, as required by the city charter, before considering the package at a meeting next month.

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