Can Rich Man, Poor Man Be Neighbors? : Housing: Carlsbad is taking steps to find out, with a requirement that developers devote 15% of a project to lower-income units.
Larry Clemens’ life became a lot less simple recently when Carlsbad distinguished itself as the first city in San Diego County to require major developers to build 15% of their new units for poorer families.
Clemens is building a $1-billion resort and housing project on the graceful slopes overlooking Batiquitos Lagoon. Mixing lower-income units with homes selling for $500,000 isn’t what he had in mind.
“This comes as a bit of a shock. We don’t know how to deal with it,” said Clemens, vice president and general manager of Hillman Properties, the master developer of the 2,836-unit Aviara project.
But Carlsbad, a largely upscale, coastal community of 63,000 people, is in a bind of its own.
Along with other cities, it is struggling to meet its regional share in providing lower-cost housing, amid pressure from the state and the San Diego Assn. of Governments.
The city wants to see 1,480 more dwellings over the next five years for lower-income people--often people who work locally but must travel congested roads and freeways to housing in less expensive communities such as Vista.
When the City Council last month approved the 15% mandate, it broke new ground among local cities. Oceanside is considering a similar move, and Sandag is cajoling other cities to do likewise.
“We’re trying to convince a number of jurisdictions to follow,” said Mike McLaughlin, housing program manager for Sandag. “Carlsbad is the furthest along.”
So far, Carlsbad’s fledgling experiment is raising more questions than passions. Even the city’s mayor wonders just how the affordable units can be blended, both economically and socially, into fancy new developments.
“How can you sell to a person with a $30,000 income? How can you get them into Carlsbad, with the average home running over $200,000?” asked Mayor Bud Lewis, a 20-year veteran of the City Council.
Developers wonder the same thing, yet the need to find more housing for poorer people is no academic question.
According to Sandag, nearly 22,000 more such units are needed countywide between now and 1996. The median income for a family of four in the county is $37,900, while the top of the low-income category is $30,000.
Carlsbad’s progress in helping such families has been halting: Its previous goal of providing 567 lower-income units between 1985-90 fell short by nearly 40%.
But that was before the city approved the 15% requirement, and the ambitious plan is expected to net 1,480 more lower-income units by 1996.
Even though the estimated number of units needed is 2,509, Associate Planner Tom Ponsford, the city’s housing specialist, is pleased that the housing program now has “teeth” in it. Before the percentage requirement, most developers simply ignored lower-income housing, he said.
“We didn’t have any numbers, so they just went merrily on their way,” Ponsford said. “We’ve been letting the development community distribute the housing stock in Carlsbad.”
The state requires cities to foster housing for poorer families, but does not tell them how to do it. That allows the flexibility to impose a percentage requirement on developers.
Ponsford hopes developers will respond with a variety of units, including rentals and lower-priced homes for sale.
“We’re not going to exclude homeownership,” he said.
However, the city’s housing plan won’t be completed until July, and considerable mystery remains about how government and private industry can work together to accomplish the awkward mix of units within the same project.
Just ask Clemens, the master developer of Aviara, whose nearly 3,000 homes will be completed in five to seven years. The houses will range in price from $250,000 to $600,000 in the first phase, and custom lots are expected to hold homes selling for upward of $1 million.
In addition, Aviara will offer a luxury hotel and an Arnold Palmer-designed golf course.
“The area was always expected to be the move-up market for Carlsbad,” Clemens said.
There were no plans for lower-income housing, said Clemens, who is now faced with revamping his land planning.
He said it will be difficult to artfully combine cheaper units amid expensive dwellings.
“Here we are building a resort; we hardly are the ones who want something to stand out as a ghetto,” he said.
Although local builders say they want to help house poorer families, they clearly don’t want to subsidize the cost--especially since they already pay fees to help build schools and provide parks, roads and services.
Even though the new developments themselves cause the need for additional schools, parks and infrastructure, builders feel the cost of lower-income housing may be going too far.
“We can’t shoulder it all,” said Bret Vedder, a legislative analyst for the Construction Industry Federation in San Diego.
He argues that the cost of building affordable housing would be tacked on to the price of regular housing in a development. “It’s a hidden subsidy tax on the new homeowner,” he protested.
Vedder largely blames local government for creating the housing crisis among lower-income families.
As he sees it, stiff fees and the years-long process of getting a project approved drive up costs so much, “there really isn’t affordable housing being provided. We’ve been priced out of providing affordable housing.”
So far, it’s impossible to tell whether such hardship claims by developers will find sympathetic ears at City Hall, where builders are often presumed to be more interested in profit than in helping solve social problems.
Ponsford believes that with Carlsbad’s potential as an industrial and retail job center, more housing must be built for the lower-wage work force--and developers should play a key role.
He doesn’t agree that providing affordable homes will necessarily hurt developers. “That cost, especially if it’s a big development, can be a small cost that’s passed on,” he said.
Developers, meanwhile, hope that the city of Carlsbad, where land is expensive, will grant them concessions to build the lower-income housing.
Vedder thinks the city should save time by streamlining the project approval process, consider waiving some fees, or give so-called density bonuses with which developers can build a larger number of units per acre.
“It’s not like we’re asking for a freebie,” he said.
City officials are still refining the plan and say they don’t yet know how to work lower-income units into a project. But it is clear that the city will rely heavily on private-sector projects, while continuing to use federal rent subsidies and its own redevelopment money to help meet the goals.
The city is also determined to spread the lower-income units throughout the community rather than concentrating them.
