Housing Crunch Puts S.D. on Fast Track Path
BY MANDY JACKSON
Staff Writer
For real estate developers, time is money.
They contend the long review and approval process in San Diego adds to the cost of their projects and limits the amount of affordable housing that can be built.
The city’s Development Services Department has asked the City Council to consider a proposal to expedite the review of plans for affordable housing and infill, or redevelopment, projects.
The city’s Land Use and Housing Committee, made up of five council members, considered the proposal at a daylong April 17 meeting on affordable housing.
Over the next several months a first draft of the proposal may make its way to the full City Council for input.
The plan, which the city has dubbed the affordable/infill housing expedite program, would require San Diego to hire an additional manager to oversee it and extra staff members , estimated at 5 to 8 new employees , to work only on affordable and infill projects.
“It gives them a singular focus and keeps their priorities clear,” said Kelly Broughton, deputy director of the development services department in the land development review division.
“We really need to have a group of specialists who understand the type of development we do,” said Michael Galasso, president of Barone Galasso, a San Diego-based affordable and infill housing developer.
Having a division focused on one type of development would lessen the amount of time spent answering the same questions over and over again on similar projects, Galasso said.
More, More, More
As more questions are raised in the process, more fees are assessed to developers and more fees must be paid to architects and consultants helping the developer answer those questions.
“The cost for consultants has gone up rather dramatically because of the meetings with the city,” said Tom Carter, a general partner in Carter Reese & Associates, another San Diego-based developer specializing in affordable housing and infill development.
Also, Carter explained, if the developer has already purchased its land, it has to make payments on the loan and pay property taxes on land it isn’t allowed to develop and earn income on yet.
For instance, Carter Reese’s Marston Point development near Balboa Park was reviewed for 24 months and it cost the developer $220,000 per year to hold on to the land.
Also, a condition of a lot of state and federal funding for affordable housing is that a building permit must be pulled in a certain amount of time or the money will be taken, Galasso said.
For two years, Galasso has been a member of the Technical Advisory Committee appointed by the Land Use and Housing Committee to examine the development process in the city.
Barone Galasso submitted its plan for Island Village, 280 affordable apartments at 12th Avenue and Market Street in Downtown’s East Village, in October and received a building permit in April. Construction is under way.
For 30 days, the developer spent time on its own reviewing its design. Excluding that month, Galasso said that its six-month approval period on Island Village is typical for a developer who knows the review process in San Diego.
Having a project manager who communicated with the 13 city departments reviewing its plans also helped Island Village. Galasso said the extra fees for that service are worth the savings in time and money.
Paying To Get On Fast Track
For an extra fee, developers already can have their projects expedited through the review process. However, so many projects have asked for speedier processing, even those projects get backlogged. That is why development services wants to create a new program to speed affordable housing through the review process.
Carter Reese & Associates partners Carter and Reese Jarrett have been pushing the city to develop a program dedicated to expediting the review process.
“It’s one of the things driving up the cost of housing. The longer it takes to get a project through, it decreases the chances to stick to the original pricing (of the housing units),” Carter said.
Council members Brian Maienschein, Scott Peters and Byron Wear supported the concept during the April 17 Land Use and Housing Committee meeting. Council members Donna Frye and George Stevens, however, feared projects would be approved without support from the community.
Frye was concerned that by including infill housing in the program, housing on redevelopment sites that aren’t affordable would be expedited as well.
Broughton said the department will take a closer look at including infill projects in its plan to expedite certain projects.
“We see that as the next movement to get more housing in the city,” Broughton said.
Under the plan, development services staff members would push developers to take their projects to a public hearing if community groups disagree with their plans rather than going back and forth between those groups, Broughton said. It’s up to the City Council to make a final decision.
“It’s complicated, but as developers we complicate it too,” Galasso said.
If developers don’t respond quickly to questions from the city, that slows down the process too, he noted.
