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Home Developer Offers Concessions In Rancho Peñasquitos Project

The entrance sign to the Penasquitos Village housing development in Rancho Peñasquitos is seen here, Aug. 14, 2017.
Katie Schoolov
The entrance sign to the Penasquitos Village housing development in Rancho Peñasquitos is seen here, Aug. 14, 2017.
Home Developer Offers Concessions In Rancho Peñasquitos Project
Home Developer Offers Concessions In Rancho Peñasquitos Project GUEST:Andrew Bowen, metro reporter, KPBS News

This is KPBS Midday Edition. I'm Maureen Cavanaugh. A proposed development in Rancho Peñasquitos has become a focal point in the housing crisis. Since we first told you about this project last summer, the developer has made changes. Andrew Bowen has the story.So of the 276 apartment homes they're going to be located closest to where the corporate offices.Kim Arnold is walking me around the village. Is a quiet area with a canopy of pine and eucalyptus trees shading the homes. Arnold is a supervisor with Atlantic and Pacific.It's a wraparound style interior courtyard. They have all the amenities.Arnold is describing Pacific village. The plan has drawn criticism from some neighborhood activists who say the existing homes are some of the few left in the neighborhood that are still affordable to low and moderate income residents. That is because they are older, smaller and lack modern amenities. Several tenants rely on federal housing vouchers to help pay rent. Arnold says Atlantic and Pacific has heard the concerns.The project has evolved over time and we listen to officials and community leaders and started making some changes to the plan that will incorporate two Maine things. The first is the affordability component.60 apartments will set aside for -- be set aside for low income residents. The second change was a relocation package for all the residence. They hired a consultant to help find new homes for the housing voucher recipients.Voucher holders are what we are committing 100% of our efforts to. The most exciting thing that Atlantic and Pacific has done is we have designated at least half of the voucher holders to go to Atlantic and Pacific properties throughout San Diego.I see this as a victory in the battle but I don't see it as the entire compromise that can be had.Melinda is a resident who is organized against the project. The community plan calls for this site to be preserved for low and moderate income housing. She says even if the new homes are below the median price, most will still be unaffordable for the current tenants. She accepts they are trying to make money.There is no value judgment on that. That is the reason why we have government to implement regulations because government is supposed to be an assistance for the people to make sure that we have a plan because left to their own devices developers will do what is ever in their own best interest.She doesn't want to see any decrease in her neighborhood stock of affordable housing. That might be a lofty goal but funding for affordable housing has been drying up and San Diego has an immense shortage of market rate housing for the middle class. Pacific village would provide a net increase of 260 homes that currently don't exist.The spaces underutilize. In order to be a part of the solution, you need to bring more density into these projects. We think Pacific village does that and also brings both a moderate priced housing and the affordable housing that is in compliance with both the committee and the general plan.They been able to help relocate about half of the housing voucher recipients and will start construction and tell all have found a home. Pacific village gets a hearing at the city's planning commission on Thursday and after that it will go to the city Council for a final vote.Joining me is Andrew Bowen. Remind us about your original report on this project. You introduced us to a woman who was packing up not knowing where she would be able to move from the housing now. Has she found a home?Yes, she's lived in the village for 23 years. She is a section 8 housing voucher recipients. I've been told that she had been offered a place in North County but that place had poor access to public transit. She is currently still looking for a place to live.You say 60 units will be set aside for low income. How many residents live for need low income housing question markNone of the apartments are designated as affordable housing. The units were built in the late 60s and in 1992, the property owners had a deal with the government to designate them as low income housing. That agreement expired in 2010. The homes have been market rate ever since. They did agree to continue to accept the housing vouchers for some on-site. They will continue to do that for the 60 low income units in the new project. Those are 60 new units that are currently not in existence inWhere are the other properties that may accept the displaced residents which mightSome properties are close by. They are in Rancho Peñasquitos and others are in Escondido and Vista. The challenges that they might have are very likely more expensive than the properties at Rancho Peñasquitos .So some developers have chosen to pay a fee instead of building affordable homes they chose to increase the number of affordable homes. Do we know why they made that choice?I think what we can say here is on these projects that are controversial and it somehow involves a loss of subsidize or naturally affordable housing. City officials are more inclined to put the pressure on developers to increase or include more affordable homes in their projects. Not to just pay a fee.You say that the project will build a total of 600 homes, town houses and apartments adding more than 280 residences to the neighborhood. Is the size of the development drawing any opposition?When you have these dense projects or projects that are denser than what is in existence you hear concerns about parking laws or traffic congestion. I haven't heard any of those concerns. It hasn't been a part of the public discussion or dialogue. 600 units is what the city is zoned for so they are not asking for any special increase in density or using the bonus program. This is what they are allowed to build under the zoning.Usually the developer knows -- will price the new homes. What will they be selling for?They have not given a full list for the options of the for-sale properties. The attached home prices will start in the lower 500,000s. That is very expensive and unattainable for a lot of people but it is below the median price for a newly constructed home.What does that qualify it for? Is that moderate price, below market priced? What is the terminology?It depends on who you ask. The developers are saying this is moderately priced housing. There's a little bit of wiggle room is are you building luxury homes with the most expensive amenities or large units with several bedrooms or are you building smaller units with simple amenities? That is in the eye of the beholder. A lot of the advocates against this war posted this project have called this luxury housing and the developer rejects that term.In your report, you said the community plan sets aside this area for low and moderate income housing. Is that something the city Council can overturn?They can't really just overturned the community plan. They can make the findings that this project is consistent with. That is something in the eye of the beholder. The fact is that the project does include 16 new low income affordable units that don't exist on the site right now. Despite the fact that some of these apartments and homes will be out of reach for many San Diegans that is where the housing market is right now. From the developers perspective, they are providing the housing that San Diego needs.This project goes before the planning commission and we will see what happens there. I've been speaking with Andrew Bowen. Thank you.Thank you.

Peñasquitos Village is a quiet residential community wedged between Black Mountain Park and Interstate-15, with pine and eucalyptus trees providing shade for the 332 single-story homes. Some of the homes are vacant, but a sign posted in the window of the leasing office politely states no new rental applications are being accepted.

In April 2016, the property owner, Atlantic & Pacific, sent out letters informing its tenants that it was seeking to demolish the homes and build new ones. The letters set off a year and a half of pushback from neighborhood activists seeking to stop the redevelopment plan from being approved by city officials.

The plan, branded Pacific Village, was abruptly taken off the agenda of the city's Planning Commission in September. Now, Atlantic & Pacific and its development partner, Lennar Homes, are touting changes to the plan that they hope will win over skeptics at the project's rescheduled hearing on Thursday.


"We listened to elected officials, community leaders and the residents and neighborhood, and started making changes to the plan that will incorporate two main things," said Kim Arnold, a regional supervisor with Atlantic & Pacific. "The first is the affordability component."

RELATED: Experts See 'Perfect Storm' Descending On San Diego Housing Crisis

The developers have agreed to reserve 60 of the 600 homes in Pacific Village for low-income residents, and to charge them below-market rents. This fulfills the city's rule that 10 percent of new housing development be designated affordable — something developers often get around by paying a so-called "in lieu" fee. Previously, the project had 28 affordable homes, with the developers opting to pay the fee to make up the difference.

The second change to the project is a relocation package being offered to the current tenants. All are getting a discounted rate with a local moving company, and free moving boxes and packing tape.

Those who moved in prior to the April 2016 notices — about 40 percent of current tenants — are being offered a cash payment to help cover 18 months of what will likely be a higher rent at a new home. An agreement to keep the homes priced below market rate expired in 2010, but tenants have continued to pay relatively cheap rents because the homes are nearly 50 years old and lack modern amenities like dishwashers and air conditioning.


In addition to the cash payments, Atlantic & Pacific has pledged to spend extra time helping its most vulnerable tenants: those who receive federal Section 8 housing vouchers. It is setting aside apartments in other properties it owns and manages for the voucher holders, and those voucher holders will get first dibs on the 60 low-income homes included in the redevelopment plan. Atlantic & Pacific says construction will not start until all 80 voucher holders have found a new home.

"This relocation program is really something that is unheard of in this type of development," Arnold said.

Renderings illustrate the homes of the Pacific Village project proposed for Rancho Peñasquitos.
Renderings illustrate the homes of the Pacific Village project proposed for Rancho Peñasquitos.

The changes are encouraging to some activists — but not everyone has been won over.

"I see this as victory in the battle for preserving affordable housing in Peñasquitos, but I don't see it as the entire compromise that can be had," said Melinda Vasquez, a Rancho Peñasquitos resident who has organized against the Pacific Village project.

Atlantic & Pacific says both the apartments and for-sale homes in Pacific Village will start at prices below the median price for newly constructed homes. Vasquez says that would still be unaffordable for most middle class San Diegans, more than half of whom are considered burdened by the region's astronomical housing prices.

Home Developer Offers Concessions In Rancho Peñasquitos Project

Vasquez said she understood that Atlantic & Pacific and Lennar are not charities, and are just trying to make a profit. But she said it was up to city officials to keep them in check.

"Government is supposed to be in existence for the people, to help make sure … that we have a community plan, that we know how we're going to build out," she said. "Because left to their own devices, developers, or people in for-profit businesses will do whatever is in their own best interest."

Arnold countered that the main reason for San Diego's housing affordability crisis is a lack of new housing supply that, coupled with a growing population, has led to low vacancy rates and bidding wars over scarce homes. She said Pacific Village, which would create a net increase of 268 homes, is exactly the kind of project San Diego needs.

"The space is underutilized," she said. "In order to be a part of the solution for San Diego, you need to bring more density into these particular projects, project infill development areas. And we think Pacific Village does that."

Pacific Village is scheduled for an initial hearing at the San Diego Planning Commission, which can make a recommendation on the project's approval. The final decision rests with the City Council.