Nearly 100 affordable homes will be built on a vacant lot in east Chula Vista.
While city officials have already approved the $38 million project at the southwest corner of Santa Victoria and Santa Diana roads in Otay Ranch, their latest move could be key to advancing the plan: Councilmembers earlier this month voted unanimously to begin the process of issuing as much as $25 million in tax-exempt bonds on behalf of the developer, Orange County-based Baldwin & Sons.
A spokesperson said the city is acting as what’s known as a “conduit issuer” — meaning the Housing Authority facilitates the financing but is ultimately not responsible for repayment.
Staff said in a report to councilmembers that the arrangement will allow the city “a greater ability to oversee ongoing compliance at the project than if the bonds were administered by an outside issuer.”
The affordable units would be in a standalone building that’s part of a nearly 600-unit project known as Enclave Montecito. Units would range from one to three bedrooms, and about 10 of them would be meant for extremely low-income households at 30% of the area’s median income. They are required to remain affordable for 55 years.
The project also is expected to include more than 11,000 square feet of commercial space.
In addition to the tax-exempt bond, the developer expects to finance the rest of the Montecito affordable housing through private sources.
Because state law allows affordable housing developers to build at higher densities, the project has been approved for reductions in onsite parking, private open space, common usable space and public plaza space.
Though they approved the project, some Chula Vista planning commissioners previously raised concerns regarding possible lack of parking, traffic increases and general congestion. They also pointed to the land’s previous commercial zoning.
Baldwin & Sons is involved in other Chula Vista developments. It reached a settlement earlier this year over its plans to build a 450-acre development near Lower Otay Lake after environmentalist groups sued over fire risk concerns and other issues.
Chula Vista, like others in San Diego County, has grappled with building affordable housing for years as the region struggles with low inventory and skyrocketing costs. Last month, councilmembers approved loaning as much as $4 million to local nonprofit developer Community HousingWorks for the construction of nearly 80 affordable units along Third Avenue.
The city, particularly its eastern neighborhoods, has seen substantial housing construction for decades that’s resulted in the expansive Otay Ranch area along with Eastlake and Rancho del Rey neighborhoods. In recent years, it has led the county on a per capita basis for issuing permits for new home construction.
Since then, Chula Vista’s latest housing report shows it has issued building permits for roughly 5,700 above-moderate income units in the past four years. It issued fewer than 650 permits for affordable units during that same time period.
San Diego County’s median household income is $130,000. “Affordable housing” units are offered to families earning 60% or less of the area’s median income.
The city is expected to first hold a public hearing on the bond issue before the Housing Authority would consider final approval in early 2026.
