CARLSBAD — Rincon Homes, developers of a 33-unit mixed-use project in Carlsbad Village, withdrew its application ahead of a scheduled City Council hearing after a city staff report recommended denying the project.
The report noted that while the council would make the final decision, staff had identified issues with tenant protections under the state’s Housing Crisis Act. Staff’s recommendation follows the Planning Commission’s February recommendation that the council approve plans for the Rincon Roosevelt project.
The project would develop a 0.69-acre site along Roosevelt Street with a four-story building containing 33 condominiums, including five affordable units, according to city documents. It would also include 3,419 square feet of commercial space and 42 parking spaces in a gated garage.
Following the commission’s recommendation, city staff identified possible violations of the Housing Crisis Act, including a requirement to allow tenants to remain in their units until six months before construction begins.
Upon further investigation, staff determined that the property owner had required tenants to move out of the existing units without the notice and relocation assistance required by the law, according to the report.
The applicant, Rincon Homes, contacted seven of the eight former tenants in April and offered them the right to return to their units at their previous rental rates and remain until six months before construction, according to the report. Of the five who replied, only one expressed interest in moving back.
Staff sought guidance from the California Department of Housing and Community Development in May. After discussions between city staff and Rincon, a state agency representative “left a voicemail message for city staff indicating that the applicant’s proposed remedy was satisfactory, approval of the project would not violate the Housing Crisis Act or at least the California Department of Housing and Community Development would not go after the city for approving the project,” according to the report.
“A written response would have established an official record of guidance from the California Department of Housing and Community Development that the city could provide in response to any challenge to the city’s decision on the project,” the report stated. “The department’s voicemail response does not provide the same level of protection for the city and failed to address the Housing Crisis Act’s apparent requirement that the city deny the project.”
Rincon withdrew the application ahead of the Sept. 29 City Council meeting, when the project was scheduled for a hearing. Mayor Keith Blackburn announced the withdrawal at the start of the meeting.
Jonathan Frankel, vice president of Rincon, said in a statement that the team had been working with the city and state for seven months “to address actions that occurred before our ownership of the property.”
“On Sept. 19, we were informed that the city could not rely on guidance from the State Department of Housing, which had concluded that the project complied with the Housing Crisis Act,” Frankel said.
“Under these circumstances, we felt it was important to take a step back and re-evaluate the proposal to assess potential alternatives. We look forward to bringing forward a project that delivers affordable housing, supports small businesses, and implements the city’s vision for a vibrant village area.”
