DEL MAR — The Del Mar City Council approved a resolution this week declaring a small city-owned lot adjacent to City Hall as exempt surplus land, in the first step toward developing a 100% affordable housing project on the site.
The vacant parcel along 10th Street measures around one-tenth of an acre and is part of the City Hall complex. The site is one of two city-owned lots that Del Mar is relying on to help meet its affordable housing production goals outlined in its 6th Cycle Housing Element, the other located on 28th Street.
At the City Council’s Feb. 16 meeting, city officials said that before the city can solicit developers to submit proposals for projects, the city must issue a resolution declaring the site as exempt surplus land in compliance with the Surplus Land Act.
City officials are planning to develop between four and eight very low-income housing units on the parcel, in a building that fits with the character of the single-family neighborhood. However, city leaders emphasized that the City Council will have the final say on the number of units.
“The approval of this submittal of the waiver for the Surplus Land Act is the first step in the city being able to develop that parcel,” said City Manager Ashley Jones. “It is not a council approval of a scope of a project, it’s not approving a number of units.”
Once the resolution is approved by the state Housing and Community Development Department (HCD), the city can solicit project proposals from housing developers. Any proposed project would be presented to the Design Review Board and the City Council for review.
Del Mar has allocated $500,000 to the project so far, but will need millions more in grant funding to make it a reality.
The city was unsuccessful in obtaining a $3.5 million Smart Growth Incentive Program grant from SANDAG this past year, but will seek funding via HCD, state encampment resolution funds, and representatives who may be able to secure discretionary dollars.
“What we’re deciding to do is declare this surplus, and then begin a journey,” said Councilmember John Spelich.
The city has been discussing developing this small parcel since 2020. HCD requires the city to obtain a building permit for at least seven units by 2027 and to identify other sites for development.
Some council members, as well as residents, questioned why the resolution mentioned the possibility of up to eight units, given that the city had previously hired a consultant to study the feasibility of four units.
Officials said the consultant found that there is enough space to develop four two-bedroom units on the site. Based on this, the city determined that the site could also accommodate eight smaller units, each around 500 square feet, if they wanted to maximize the number of units.
“The number of units that’s identified is to give the City Council the most amount of flexibility possible,” Jones said.
Some neighbors said a smaller project would be better, citing potential impacts on parking, privacy, and the area’s overall community character.
Rick Ehrenfeld, who lives on 10th Street, said mentioning the possibility of eight units in the resolution could set an expectation, going forward, that the project will be that large.
“This is the first time eight ever appeared … The neighbors were okay when it was four units, most were okay when it was six units,” Ehrenfeld said.
Resident Camilla Rang, who also lives on 10th Street, said two-bedroom units would be better for families with children who want to live in the area.
“We should scrap that eight. We should not give the developers that flexibility or that opportunity,” Rang said.
Staff said the project would be no more than two stories tall and designed to fit the neighborhood character. Parking could be provided in the City Hall parking garage adjacent to the site, they said.
Councilmember Terry Gaasterland said that at this point, she preferred a four-unit project with two-bedroom units.
The very low-income units would be restricted for a period of 55 years for renters making 50% or less of the area median income in San Diego County
Jones said it will be difficult to determine the project’s financing until the city receives pro formas from developers. She said the city would likely partner with a nonprofit developer focused on affordable housing, which typically develops the project at cost plus a flat fee from the city and later manages the development.
“The rents are so restricted that these properties really don’t cash flow,” Jones said. “If you have to finance it, they barely cover the cost of paying for themselves, and also just the general maintenance and repair of the property.”
Del Mar has yet to see any affordable housing units developed in the city. Under the Regional Housing Needs Allocation, or RHNA, process, the city is obligated to produce 37 very low-income and 64 low-income units by 2029.
