Affordable housing proposal draws some heated criticism

SOLANA BEACH — A sheriff’s deputy had to step in twice to regain decorum during an Aug. 15 workshop to provide information on a proposed affordable housing development slated for a city-owned parking lot in the 500 block of South Sierra Avenue.
City Manager David Ott gave a brief history of the project, then introduced Ginger Hitzke, president of Hitzke Development Corporation.
About a minute into her presentation, Hitzke was interrupted with comments from the audience that included, “You’re hiding the facts,” “This is a marketing presentation,” and “This sucks.”
“We came here expecting some dialogue,” said Marty Schmidt, who provided a handout opposing the 10-unit project. “We all want to hear what everyone else’s comments are.
“A PowerPoint presentation is a marketing plan,” he said. “It’s not going to be productive. It’s a big waste of time.”
Not all of the approximately 80 people attending were against the proposal. “Some of us are not opposed to this project,” three-time former Mayor Marion Dodson said. “Some of us want information.”
Past litigation
Although all cities are required to provide affordable housing, Solana Beach has been subject to lawsuits since the 1990s after City Council took action that closed a mobile home park.
Affordable housing advocates threatened litigation, claiming low-income units had been eliminated. Rather than go to trial, the city entered into what became known as the Perl settlement, which, among other things, mandated the replacement of 13 affordable units.
Since then three have been provided. “This project meets (the Perl settlement) requirement,” City Attorney Johanna Canlas said.
Earlier this year the court ruled in favor of the city on a lawsuit stemming from the Perl agreement. Despite the win, the city still had legal costs.
“This council is charged with trying to figure out how to stop spending millions of your dollars in these lawsuits,” Councilman Dave Roberts said. “We want to settle the past.”
Mayor Lesa Heebner said avoiding litigation is only one reason the city should pursue the project.
“Providing affordable housing is the right thing to do,” she said. “Diversity is vital to the future vibrancy of our city.”
Ott explained that the process began in late 2008 and spring 2009, when affordable housing developers were invited to two workshops to discuss development options at various city sites.
Hitzke wasn’t able to attend those workshops but she and others approached the city independently.
Her plan was to specifically develop the South Sierra lot. After several discussions, the city entered into an exclusive negotiation agreement with her company during a July 2010 council meeting that was reported in this and other local newspapers.
The agreement didn’t obligate the city to sell or lease the site or continue working with Hitzke beyond the 120-day contract. It also didn’t grant Hitzke the right to develop the property.
At the Jan. 26 meeting, council members extended the agreement and approved a $648,000 loan to help defray the estimated $1.1 million in predevelopment costs that include architectural, planning, environmental and engineering studies, designs, utility analyses, and legal and application fees.
Half of that money is available to Hitzke now. Remaining funds can only be used after the project is approved. So far Hitzke said she has spent approximately $163,000. The city has reimbursed her $40,000 and another $50,000 is pending.
“My money is very much at risk now,” she said. The loan, which came from the city’s redevelopment fund, must be paid back in 55 years with 3 percent interest.
Hitzke and city staff presented the project to a nearby homeowners association in May and held the first informational workshop in June.
“There’s nothing being hidden here,” Ott said.
The project
Hitzke is proposing a three-story building that includes three one-, two- and three-bedroom units ranging from 510 to 1,075 square feet, one 1,200-square-foot four-bedroom flat and 1,350 square feet of commercial space for an upscale market.
The existing 31 parking spaces, used mostly by beachgoers and as a drop-off area for the city’s junior lifeguard program, will be retained, and 23 spaces will be added in a semi enclosed underground structure.
Called The Pearl, the building will feature “all the bells and whistles” needed to obtain LEED certification, architect Mike Burnett said. “This is not a big box,” he said.
What is affordable housing?
Hitzke said affordability doesn’t mean low income. According to government guidelines, affordable means housing costs — the monthly payment, utilities, taxes and insurance — cannot be more than 30 percent of one’s income.
Using that formula of annual income, times 30 percent, divided by 12 months, Hitzke said a medical assistant or veterinary receptionist — jobs she found advertised in Solana Beach — making $12 to $14 an hour, would qualify to live in The Pearl, as would some senior citizens.
During Hitzke’s explanation, attendees again began shouting comments out of turn, prompting a sheriff’s deputy to ask them to be respectful.
Security & traffic
Applicants will be subject to a screening process that includes third-party income verification and annual civil and criminal background checks, Hitzke said. Additional provisions include a crime-free lease addendum that will expedite resident removal for illegal behavior.
“There won’t be gang members in there because they would be screened out,” Lt. Glenn Giannantonio said. Any drug, gang or criminal activity will be grounds for removal. Site inspections are also allowed.
“When these developments are certified, it actually becomes a privilege for the tenants to live there,” he said. “You get a higher class of people. There are definitely controls over who can become a tenant there and who can stay a tenant there.”
A third-party management company is used and an onsite manager will live in the complex.
The proposed project will be certified with the crime-free multihousing program, which is run by local law enforcement and used in more than 2,000 cities nationwide, Giannantonio said.
The program trains property managers and uses crime prevention through environmental design, which encourages public safety by focusing on lighting, fencing, vegetation and cameras if warranted.
“There’s not going to be a lot of dark corners where people can hide,” Giannantonio said.
John Collins, a traffic engineer, estimates the complex will generate 288 daily trips, so it “does not have any significant impacts” on the roadway, he said.
He said South Sierra has a capacity for 8,000 daily trips and is currently at half that, prompting one resident to say, “You’ve got to come spend some time on that street.”
Fact versus fiction
In his handout Schmidt, who lives on South Sierra, made a variety of allegations against the city and the developer.
There will be 10 extremely low-income housing units. Hitzke said her development falls in the very low category, or those making $17,000 to $47,500 annually, depending on household size.
State law only requires a city to plan for affordable housing, not build it, and a vote is required. After checking with the city attorney, Ott said both these statements are false.
The unit cost will be more than $300,000.
Hitzke said that is true, but the high cost is not unique for affordable housing projects.
A requirement to pay prevailing wages, eliminate blight with aesthetically pleasing projects that fit into a neighborhood and build sustainably, as well as the price tag to prepare the site result in higher-than-average costs, according to a Voice of San Diego article Hitzke said accurately summarized the issue.
The project exceeds zoning requirements. Yes and no, Ott said.
It falls within the limits for floor area ratio and height but not for setbacks, density and parking. In those areas, Ott said it exceeds the requirements slightly, but that is allowed for affordable housing projects.
The project doesn’t meet the Highway 101 specific plan requirements. The specific plan sets guidelines, not policy, Ott said.
The City Hall parking lot can support this project. Ott said the City Hall parking lot was considered for other potential projects but it’s too big for The Pearl.

Funding
The Pearl will likely cost more than $6 million. About $1.5 million is expected to come from a county grant. Hitzke can also apply for state housing credits.
As part of the Perl settlement, the city was required to set aside money to replace those 13 units. There is currently about $1.5 million in that fund that will be used, Ott said. There is also $400,000 from a redevelopment agency that was closed in 2001 that will likely be used, he said.
The rest will be financed through Hitzke. The city will get all its money back and once the loans are paid the property will revert back to Solana Beach, Ott said. “The property is not being sold,” he said.
Optional sites
Roberts said the city doesn’t own the old mobile home park property, the owner is not willing to sell, and the city doesn’t have eminent domain power so that site is not an option.
Ott said other sites near City Hall were considered for other projects, but potential developers never followed up with the city.
Zoning
Schmidt said when he visited Hitzke’s development in Lemon Grove the retail space was not yet filled. Residents were concerned that may happen in Solana Beach. If it is filled, they said it will create more litter and asked if it could be eliminated.
Since the area is zoned commercial, the retail must stay because mixed-use developments are allowed.
Hitzke said the economy made it difficult to find a tenant for the Lemon Grove property when it opened a few years ago.
When her second project in the city was going to displace businesses, she stopped looking for tenants to give those owners a place to relocate.
Supporters
Schmidt said this is not a case of residents not wanting affordable housing in their backyard. He said most people told him the development does not fit on this property.
“It will dominate the whole street,” he said. “In my opinion, low-income people deserve the same dignity. Trying to put them in a parking lot where the building doesn’t fit will cause tension.”
He said he talked to tenants in the Lemon Grove complex and they complained they could hear the conversations and flushing toilets of their neighbors.
But The Pearl was not without supporters. “Not only do we need this project, but we need any number of projects like it,” Solana Beach’s first mayor, Margaret Schlesinger, said.
“Thirty years ago residents were saying the same thing about their projects,” said Schlesinger, who lives near the proposed complex and walks the area daily. “Those people are now objecting to 10 units.”
“You would have thought they were proposing 110 units,” Dodson said. “People think it will bring a drug-and-bug-infested element into the city. That’s not true.
“We really should provide housing for low-income families,” she said. “We should provide it regardless of the requirement.
What’s next?
The project is undergoing a 30-day view assessment review until early September. Ott said he may schedule another workshop if significant revisions are made following input from the two workshops.
The Pearl is not a done deal, Ott said. “We’re still in the workshop process,” he said.
Final approval must come from City Council following a public hearing at a noticed meeting, during which anyone can weigh in.
Council meetings are held the second and fourth Wednesday of the month beginning at 6 p.m., information at least one attendee was not aware of.
Anyone can sign up for city eblasts and have agendas sent electronically to them.

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