SOLANA BEACH — Solana Beach candidates for local office outlined the city’s obstacles to affordable housing, calling for the return of Redevelopment Agencies, a discontinued property tax mechanism, at a forum last month.
Nicholas Garcia of the San Diego Organizing Project (SDOP), a group of religious congregations that hosted the Sept. 15 forum, told candidates his family had to move away, after living in Solana Beach for 30 years.
Even before losing a restaurant job due to COVID closures, almost “all of my salary went to pay rent, bills, and food,” he said (translated from Spanish). “We hope that more low-income housing is built in Solana Beach so that we can return.”
From 2013 to 2019, Solana Beach granted permits for 21% of the units allocated to it in the 2013-2021 Regional Housing Needs Assessment, a cyclical housing demand forecast. The city permitted only 4% of its target specifically in lower-income categories.
Asked how they’d improve these stats, the candidates, all uncontested, said the city can only do so much without state help.
“Especially in cities with high land value, … we can’t get projects to pencil, even giving away [publicly-owned] land to developers,” said Mayor Jewel Edson, who’s running in Council District Three. She referred to The Pearl, a planned all-affordable apartment complex that would’ve gone on a city-owned parking lot, but which fizzled for lack of financing. (Though Ginger Hitzke, The Pearl’s developer, recalled in an April podcast the city being less than accommodating.)
“Gov. Brown removed what’s called the Redevelopment Agency, which was a source of funding that each city could realize to provide to affordable developers,” said Lesa Heebner, a Solana Beach mayor candidate.
“We continually push back on our state elected officials, … saying, please, please bring back redevelopment funds,” Edson said. “Without these funds, … we can’t attract developers.”
Councilman Dave Zito, who’s running in District One, echoed this sentiment.
Redevelopment Agencies used “tax increment financing,” or TIF, to divert future growth in property tax revenue to finance urban renewal projects.
Cities keep only some of their property tax revenues, the rest is redistributed to the county government, school districts and special districts, such as water and hospital districts. In San Diego County, 45% goes to schools, the largest share by far, and 13% to cities.
Normally, everyone’s share would grow as the size of the whole countywide property value pie grew. But under Redevelopment, other recipients’ shares were frozen in time, with the incremental growth in value, including of new development, going to Redevelopment Agencies. The state, obligated to backfill, lost revenue growth for schools, eventually abandoned this system in 2011.
State law still allows cities to utilize TIF by establishing Enhanced Infrastructure Financing Districts, or EIFDs. Like Redevelopment Agencies, EIFDs borrow against tax growth to fund projects.
But an EIFD captures only the city’s portion of revenue growth, unless another recipient agency — namely, the county government — voluntarily cedes its portion to achieve some shared purpose, such as transit infrastructure together with affordable housing.
“In Redevelopment, we were like the kid that came to the sandbox with our toys, and then we took everyone else’s,” Larry Kosmont, a consultant, told The Coast News. “In EIFDs … we come to that same sandbox … hoping that people will throw their toys in and participate with us.”
A few municipalities have struck deals with L.A. and Orange Counties.
But even if Solana Beach negotiated such a deal, “it is unlikely to derive much revenue for [Solana Beach] given … many of the infrastructure improvements that would cause a further increase in property values have already been done,” Heebner told The Coast News. “We need state and federal money. Period. You can’t legislate or zone [affordable housing] into being.”