San Diego Sharply Limits New Housing

The City Council adopted an interim ordinance Tuesday that would reduce by almost 50% the number of residential dwellings that could be constructed in the state’s second-largest city during the next year.

After listening to 7 1/2 hours of public testimony and debate, the council voted 8 to 1 to permit developers to build only 8,000 dwellings in the next year, a sharp reduction from the 15,000 units constructed in 1986, when low interest rates fueled record construction.

In addition to the construction lid, the council also agreed, in concept, to a provision that would strengthen protection for the city’s canyons, hillsides and wetlands threatened by development.

A spokesman for the development community characterized the vote as an “overwhelming defeat” for builders and other local business interests, who argued strongly that any artificial controls on growth would produce economic havoc.

Council members, slow-growth advocates and builders agreed that the new ordinance would change the landscape of the construction business in San Diego, which for the last three years has experienced one of the strongest housing markets in the country.

The council decision was hailed by slow-growth advocates and environmentalists as the most significant step to date to rein in what they called the city’s “runaway” development, which has overburdened streets, sewers, schools and parks.

“It is an absolutely outstanding, monumental victory for conservation and, I think, a balanced approach to protecting the environment of this community,” Councilman Mike Gotch said after the council vote.

Mayor Maureen O’Connor, who lobbied her council colleagues heavily for approval of the interim ordinance, called the vote a “victory for the little guy.”

“The council listened to what the community has been saying for the past five years: Development has run wild in the community and they want controls,” O’Connor said Tuesday afternoon. “Business as usual at City Hall is no longer that the developer can walk into the door and get what he wants. The council is now in charge of governing this city.”

Development community representatives lamented the passage of the ordinance.

‘Brand New Policy’

“I think it is very much a signal that the rules are changed forever,” said Kim Kilkenny, spokesman for the Construction Industry Federation. “Those were watershed decisions that were made last night, brand new policy.”

Kilkenny said the council’s vote was much more significant than Proposition A, the slow-growth initiative passed by the city’s voters in 1985 that requires a citywide vote for any development in the outlying land in San Diego’s booming northern tier.

Kilkenny said the vote sent two messages to the local development industry:

First, developers will not be able to build any homes unless they make sure they have adequate streets, sewers, libraries and parks in place to accommodate the growth.

Second--and more important--the council is not against imposing “artificial” controls on growth, even if the facilities can be guaranteed.

“There will be bankruptcies, there will be foreclosures and there will be layoffs,” Kilkenny said, describing the ramifications of the council’s decision on Tuesday.

“We are going to see the real economic impact in a larger sense 12 and 13 months down the road. . . . It’s unavoidable. Real people are going to be losing real jobs.”

Work on the interim measure is not over. Although council members approved broad guidelines Tuesday, they left many details unresolved and instructed city staff members to report back on July 21 with a plan on how to implement the ordinance.

Those details will include the thorny issues of how to allocate the 8,000 housing units among developers and what areas should be exempted from the measure.

If the council approves the ordinance in final form July 21, it will be 30 more days--until Aug. 21--before the ordinance is effective, city attorneys said. That lag time gives developers two more months to apply for last-minute building permits in the hopes of escaping the 8,000-unit restriction.

“There will be an Oklahoma land rush, no question,” Gotch predicted.

O’Connor, however, said she is not worried about the rush--which actually began in late April--because the city manager has up to 12 months to issue a building permit after a developer applies. By that time the ordinance will have been enacted and the 8,000-unit cap imposed.

O’Connor said she would consider the ordinance to be retroactive to April 29, when the mayor and a council member announced plans to enact an interim development ordinance with limits on home construction.

Despite the ordinance, San Diego will continue its boom housing construction for a year or so, experts say. Issued permits for 16,679 dwelling units--more than were built in 1986--are outstanding and would be unaffected by the ordinance.

In Los Angeles, the issue of growth has ballooned into the year’s most-discussed local political issue. The everyday frustrations of heavy traffic, air pollution and school overcrowding first translated into overwhelming voter approval for a major slow-growth city ballot measure last November.

Then last month, voters ousted City Council President Pat Russell from her long-held council seat in favor of environmentalist Ruth Galanter, who campaigned against Russell’s approval of major controversial developments in her middle-class Westside district.