ESCONDIDO — The city is applying for a regional grant to establish a housing trust fund and an in-lieu fee program, both of which aim to support affordable housing projects along the city’s East Valley corridor.
The City Council voted unanimously to direct staff to apply for funding through the San Diego Association of Governments’ Smart Growth Incentive Program. The program, funded by TransNet — a half-cent sales tax approved by county voters nearly four decades ago — supports public infrastructure and planning projects that promote compact, mixed-use, and transit-oriented development.
If awarded, the city’s proposal would establish a housing trust fund and a corresponding in-lieu fee specific to the East Valley Specific Plan area, located along East Valley Parkway, in general proximity to the Escondido Transit Center. The area is designated as a “high-quality” transit corridor.
“The housing trust fund is like a bank account,” said City Planner Veronica Morones. “Funding would go into it, and that funding would then theoretically be expended on housing development, and the city would control how that funding is expended.”
Under the proposal, developers building within the East Valley plan area would be required to contribute to the fund through in-lieu fees, unless they construct housing at the target density levels outlined in the plan.
“It’s not an ubiquitous fee for everyone,” Morones said. “There are avenues for not having to pay while contributing to the trust fund.”
Morones added that the city will work with a consultant to develop a fee structure that is “reasonable and in line with” similar estimates used in other jurisdictions.
The creation of both the trust fund and the in-lieu fee is mandated under the city’s adopted sixth cycle housing element. In addition to bolstering affordable housing options, the initiative is expected to give the city more control over future development. The City Council would have final approval authority on any projects funded through the trust.
“This one’s intriguing, but ultimately, I support this,” Mayor Dane White said.
Escondido joins other regional cities, such as Oceanside, which have implemented in-lieu fees to help fund affordable housing projects.
City officials said a decision from SANDAG is expected this fall. If the city secures the grant, staff do not expect the program to be fully developed for at least another year.
Separately, the city also approved applying for the same grant program to support the third phase of its Grand Avenue Vision Plan.
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