SOLANA BEACH — City Council opened the door on Feb. 27 for developers to propose potential affordable housing options for the Distillery Lot on 140 S. Sierra Avenue.
In an effort to comply with state-mandated housing requirements and fulfill a need to increase its affordable housing stock, the city of Solana Beach issued a request for development proposals (RFP) for the city-owned parking lot.
The one-acre lot currently contains 117 public parking stalls for beach-goers and city visitors. It is one of three city-owned properties outlined by the city’s housing element as a potential site for affordable housing. The city released an RFP last year for the City Hall parking lot, but received no proposals from developers.
The Distillery Lot is zoned for more units than the City Hall site, but in an email to The Coast News, Councilwoman Jewel Edson said the Distillery Lot will face similar market conditions.
Edson said the City Hall site may have posed an extra challenge to developers due to the need to keep the actual town hall on site, or redevelop it. But in general, such projects continue to be set back by increasing construction costs.
During the meeting, City Manager Greg Wade pointed out the city might be looking at “very few, if any” proposals for this site.
“Our options may be limited, that said … we reserve the right to refuse any proposals that come in the door,” he said.
The city approved the RFP with the request that developers propose a plan with 75 percent of the housing on site reserved for low- or very-low income brackets. The site’s zoning allows for mixed use and up to 20 dwelling units, or up to 27 units under density bonus law depending on the proportion of affordable housing the developer proposes.
The RFP comes with several “key assumptions,” including that the developer provides affordable residential units for varying income levels, the lot remain a city-owned site, and the developer be responsible for the planning, building and management of the potential dwelling units. It also assumes there would be no net loss in public parking spaces.
Any proposed project is also to be limited to two stories, at a maximum of 27 feet in height.
City Council members debated the appropriate percentage of low- and very-low income units to require as a condition of any development proposal. Resident Gary Martin, who spoke during public comment, proposed the city require 100 percent affordable housing as a requirement. Mayor Dave Zito called this option “financially infeasible” ‘ which was contested by Councilwoman Kelly Harless.
“It’s a very desirable piece of property that a developer would be getting for free, essentially,” she said.
Zito expressed concern that developers would simply opt to propose less residential units for the property if faced with a 100 percent affordability parameter, and instead aim for more commercial uses. If that were the case, the city would be required to find another site in the city to make up for the deficit in units — a challenge in a city with so few undeveloped sites.
As council addressed concerns over the proportion of commercial and residential uses, Johanna Canlas pointed out that the city has “plenty of tools in (its) toolbox” to avoid ending up with fewer dwelling units than what is designated by the housing element.
After vacillating between 50 percent and 100 percent affordability, council decided to set a condition of 75 percent low- or very-low income units for the property.
Zito also raised the issue of Fiesta Del Sol — a beloved local outdoor music and arts festival that takes place on the Distillery Lot every year.
“I don’t have any brilliant ideas at this point with respect to what we could do about that, but I do think that’s a significant consideration,” he said.
Solana Beach’s housing element identifies a need for 340 housing units across income levels in the city, with 85 needed in the very-low category and 65 in the low category.
Solana Beach has made some gains on the affordable housing front: securing 32 low-income units for seniors through the approval of a revitalized Solana Highlands apartment complex, and approving an application for 10 affordable units off of Sierra Avenue. The latter project, called The Pearl, was delayed significantly when two homeowners associations filed lawsuits against the city and Hitzke Development Corporation — the potential site’s developer. The court ultimately ruled in the city’s favor, but the project has yet to break ground.
“Among the greatest challenges to development our city faces are the scarce inventory and market value of developable land within our city limits,” Edson said to The Coast News. “However, we are diligently chipping away at our State Mandated housing requirement numbers.”
At the same meeting, council also moved forward with the first reading of Ordinance 500, which would amend the city’s municipal code to reflect the most recent updates to the state’s Housing and Land Use laws. The ordinance opens up the option of accessory dwelling units, legalizing existing unpermitted units as long as the units are reserved for very-low and low-income households.