Del Mar City Council
June 13, 2022

Table of Contents
2022-6-13 REVISED City Council Special Agenda - Open Session.pdf Item 1 - Combined Agenda Report - Phase I Studies.pdf
Item 2 - Combined SB 1105 Letter of Support 6-13-22.pdf 24 99
Del Mar City Council
REVISED Special Meeting Agenda

VIA TELECONFERENCE ONLY
1050 Camino del Mar, Del Mar, California
1050 Camino del Mar, Del Mar, CA 92014 www.delmar.ca.us Civility Works: The Del Mar Code of Civil Discourse: Together we will promote inclusion; listen to understand; show respect; be clear and fair; and focus on the issue.

In the interest of public health, and consistent with the provisions of Assembly Bill 361 (AB 361) and related resolutions adopted by the Del Mar City Council, the City of Del Mar is temporarily taking actions to mitigate the COVID-19 pandemic by holding City Council Meetings electronically or by teleconference. This is not an in-person meeting.

Members of the public can watch the meeting live on the City’s website at:
http://delmar.12milesout.com/Video/Live and on Cable TV Spectrum Ch. 24, AT&T Ch. 99 starting at 2:00 PM.

Agenda materials and communications from the public on agenda items, “Red Dots”, are available on the City’s website: http://www.delmar.ca.us/AgendaCenter and a hard copy of the agenda materials are available at City Hall and the Del Mar Library during their business hours.

REVISED

NOTICE AND CALL OF

SPECIAL MEETING OF THE DEL MAR

CITY COUNCIL
MONDAY, JUNE 13, 2022 2:00 P.M.

City of Del Mar, VIA TELECONFERENCE ONLY
1050 Camino del Mar, Del Mar, California
*********************************************
NOTICE IS HEREBY GIVEN that the Mayor of the City of Del Mar has called a Special Meeting at the time and place listed above to consider the following: Please refer to the attached agenda.

CERTIFICATION
I, Sarah Krietor, Administrative Services Manager/City Clerk of the City of Del Mar, hereby certify that a copy of this notice was posted at City Hall and distributed to the City Council on June 10, 2022, at approximately 8:30 a.m.
____
Sarah Krietor, Administrative Services
Manager/City Clerk
Special Needs: In compliance with the Americans with Disabilities Act, if you need special assistance to participate remotely in this meeting, please contact the Administrative Services Department via email at [email protected] or by calling (858) 755-9313, preferably at least 48 hours in advance of the meeting if possible.

Dwight Worden
Mayor
Tracy Martinez
Deputy Mayor
Dave Druker
Council Member
Terry Gaasterland
Council Member
Daniel Quirk
Council Member
Ashley Jones
City Manager
Leslie E. Devaney
City Attorney
Sarah Krietor
Administrative
Services
Manager/City Clerk
Del Mar City Council Special Meeting June 13, 2022
Revised Agenda Page 2
1050 Camino del Mar, Del Mar, CA 92014 www.delmar.ca.us Public comment is restricted to only items listed on the Special Meeting Agenda. Members of the public can participate in the meeting by either submitting a written red dot comment via email to [email protected] or by speaking live during the meeting using the Zoom link and/or dialin information provided below. For written comments, the subject line of your email should clearly state the item number you would like to comment on. The deadline to submit written comments is 12 p.m. on the day of the meeting. Those wishing to comment live should join the Zoom meeting when the item(s) they wish to speak on is announced.

Zoom Link: https://us02web.zoom.us/j/84790910014
Phone: (669) 900-6833
Meeting ID: 847 9091 0014
While registration is not required, staff recommends members of the public submit an optional tele-comment request form (www.delmar.ca.us/telecomment) to assist with speaker management during the meeting. For more information please visit:
www.delmar.ca.us/publiccomment.

I. CALL TO ORDER/ROLL CALL
II. CITY COUNCIL BUSINESS

1. Presentation of the Findings from Phase I Planning Studies to Implement the City’s Housing Element
Recommended Action: Staff recommends the City Council receive a presentation of the Phase I Planning studies that were prepared in accordance with adopted Housing Element strategies for location of affordable housing on the State Fairgrounds and two vacant City-owned sites (10th Street and 28th Street); and provide feedback.

Reference: Clerk’s File No. 304-7, 1601-8

2. Letter of Support for Senate Bill 1105 (Hueso): San Diego Regional Equitable and Environmentally Friendly Housing Act
Recommended Action: Councilmembers Druker and Gaasterland recommend that the City Council authorize submittal of a letter of support for Senate Bill 1105 (Hueso): The San Diego Regional Equitable and Environmentally Friendly Housing Act (S.D. REEF Act) to be signed by the Mayor.

Reference: Clerk’s File No. 303-1, 401-7
III. ADJOURNMENT
City of Del Mar
Agenda Report
________________________________________________________________________________________________________ City Council Action:

TO: Honorable Mayor and City Council Members
FROM: Amanda Lee, Principal Planner
Karen Brindley, Planning & Community Development Director Via Ashley Jones, City Manager
DATE: June 13, 2022
SUBJECT: Presentation of the Findings from Phase I Planning Studies to Implement the City’s Housing Element
REQUESTED ACTION/RECOMMENDATION:

Staff recommends the City Council receive a presentation of the Phase I Planning studies that were prepared in accordance with adopted Housing Element strategies for location of affordable housing on the State Fairgrounds and two vacant City-owned sites (10th Street and 28th Street); and provide feedback.

BACKGROUND
The City’s 6
th Cycle Housing Element (Housing Element), which was adopted in April 2021 and amended in December 2021, required preparation of planning studies to:
 Demonstrate that the State Fairgrounds and two City-owned sites, located at 28th Street and 10th Street, are adequate sites for affordable housing and are smart growth opportunity sites that can accommodate housing for lower income households near transit, quality schools, groceries, jobs, and governmental/health services.  Facilitate implementation of the City’s highest priority action program (Housing Element Program 3A) to secure an agreement with the State by December 2024 to allow for development of affordable housing on the State Fairgrounds property; and  Help the City obtain final certification of the 6th Cycle Housing Element from the California Department of Housing and Community Development (HCD).

The City’s Housing Element sets forth a plan to create opportunities for new affordable housing units to accommodate housing for at least 113 lower income households as assigned to the City for the current Housing Element cycle (2021-2029). This includes 101 lower income units that were assigned through the 6th Cycle Regional Housing Needs Assessment (RHNA) allocation process and an additional 12 low income units that were not met during the 5th Cycle and must also be accommodated. For reference, lower income households earn 1 June 13, 2022 Item 01
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Findings from Phase I Housing Planning Studies
June 13, 2022

no more than 80% of the San Diego County Area Median Income (AMI), which in 2022 corresponds to a maximum income of $89,800 for a one-person household.

The City’s plan to meet its housing obligation includes a variety of strategies that focus on utilizing public land to accommodate at least 61 lower income units (54% of the total 113 lower income units required) and the remaining 52 affordable units through participation from private property owners. The City’s initial focus on Housing Element implementation has involved feasibility studies that were initiated in November 2021 to help the City understand potential sizing and financing options for future affordable housing projects on the State Fairgrounds and two City-owned sites at 28th Street and the Civic Center (10th Street).

The “Phase I” planning studies were prepared by two consultant teams, Stephen Dalton Architects (SDA) and Keyser Marston Associates (KMA). The purpose of this agenda report is to share the findings of the studies and seek Council direction on next steps.

DISCUSSION:

The studies provide detail as to how the City can best achieve 61 lower income units on the publicly owned sites identified in the Housing Element sites inventory, including:
 How many affordable housing units could fit on the Fairgrounds (1 to 1.5 acres), the 10th Street lot at Civic Center (0.10 acre), and 28th Street lot (0.06 acre)  Typical costs for development at a range of affordability types and unit mix  The effect of “lost rent” when affordable units are included within a project  Tax credit programs and other financing options for a prospective project Attachment A includes information prepared by KMA explaining how affordable housing is typically created, who qualifies to live in it, definitions of key terms and concepts, typical costs, financing options, and the level of local financial contribution needed based on recent projects in the region, as well as economic analysis specific to Del Mar. KMA also provided a comparison of restricted affordable and market rate rents for north county coastal areas in San Diego County (April 2022). This information demonstrates the need for lower income “family housing” options based on data that shows average market rent for a 3-bedroom unit is $4,100, while the State’s benchmark for restricted affordable rent of that same unit is $1,604 for a low income household and $1,336 for a very low income household.

The site-specific studies, zoning assessment and architectural concepts prepared by SDA are included in Attachments B through G and evaluate three site-specific project concepts for the Fairgrounds (Site studies 1A, 1B, and 1C) and one project concept for each of the Cityowned lots (Site studies 2 and 3). These “concepts” are not intended as prospective architectural designs, rather, each site study identifies the general footprint for a potential affordable housing project that meets tax credit eligibility criteria and corresponding number of affordable units identified in the Housing Element as follows:
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Location Number of Units
State Fairgrounds At least 54 lower income units, located on the southeasterly corner of Via de la Valle and Jimmy
Durante Boulevard
28th Street Vacant Lot 3 lower income units
10th Street Civic Center Vacant Lot 4 lower income units The SDA studies were used by KMA for the economic analysis, which considered various factors (i.e., construction costs, ongoing operating costs, and whether the market rate land value is enough to offset development cost) to provide the City with estimates of the public financial contribution that will be needed to develop affordable housing. KMA identified the comparative difference in feasibility for a 100% market rate project; mixed income project (with 20% of the units restricted at various ranges of area median income for low, very low, and extremely low income households); a 100% affordable housing project at various lower income levels without use of tax credits; and a 100% affordable housing project using tax credits (9% tax credit and 4% tax credit options). This included evaluation of potential eligibility for a “scattered sites” tax credit program (e.g., a housing project with the City-owned 28th Street lot in combination with the State Fairgrounds).

Following are the scenarios that were evaluated as potential options that can produce at least 61 lower income units on publicly owned sites:

State Fairgrounds site:
 54-unit project (family housing) on a 1-acre site (Site scenario 1A)  80-unit (family housing) project on a 1.5 acre site (Site scenario 1B)  78-unit (senior housing) project on a 1.5 acre site (Site scenario 1C) City-owned vacant sites (28th Street and Civic Center 10th Street):
 3-unit project (family housing) on 28th Street lot (Site scenario 2)  4-unit project (family housing) on 10th Street Civic Center lot (Site scenario 3) Scattered sites scenarios eligible for tax credits (Fairgrounds + 28th Street project):
 57-unit family housing project (Site scenario 1A + 2)  83-unit family housing project (Site scenario 1B + 2) Site scenarios 1A, 2, and 3 represent the number of lower income units the City must meet for the respective publicly owned site locations as identified in the Housing Element. These sites can be considered for development individually; or the unit count on the Fairgrounds site can be increased within one project as needed to reach at least 61 lower income units. If a project yields more than 61 lower income units on the Fairgrounds, it will reduce the remaining unit count needed on City-owned and/or privately-owned sites.

While the Fairgrounds was a primary focus of the studies, it is important to note that the City does not own or control development on State-owned property. The City’s intent is to use the data collected and information provided through the Phase 1 planning studies to continue to 3 June 13, 2022 Item 01
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June 13, 2022

make progress toward facilitating an agreement with the State for housing development that aligns with State and local housing goals. The Phase I studies provide examples of potential projects as a starting point to facilitate additional Housing Element implementation efforts and will help inform future City Council decisions regarding Housing Element implementation as additional options for affordable housing in Del Mar are identified and considered.

The most significant takeaways of the studies include:
 Development of affordable housing will require a significant capital investment.  The City should expect to contribute at least 20-25% of the total project funding.  To address the financing gap for development of affordable housing in Del Mar, use of tax credit programs and Federal and State funding sources will be needed.  Without tax credits or Federal/State funds, development of 100% affordable housing will require an additional cash subsidy that will vary depending on the unit income level restrictions (i.e., $119,000-$500,000 per unit for scenarios studied).

Next Steps
Fairgrounds staff along with the 22nd District Agricultural Association Board Housing Subcommittee liaisons were notified about the Council workshop and provided copies of the agenda packet. Following the Council workshop, City staff will set up a meeting with the Fairgrounds staff and Board and Council liaisons to discuss the findings of the studies and discuss next steps. The City is also in the process of completing a Request for Qualifications (RFQ) process to hire a consultant with expertise in affordable housing to assist with this critical project. Once on board, the consultant will be working with City staff to develop a comprehensive plan of action for how to best move forward with this project and ensure we meet the goals and timing that are identified in the City’s Housing Element. We expect to return to Council with a plan in September following the Council’s August meeting recess.

ATTACHMENTS:

Attachment A – KMA Report
Attachment B – SDA Report
Attachment C – SDA Exhibits Site Study 1A - Fairgrounds 1.0 acre (Family Housing) Attachment D – SDA Exhibits Site Study 1B - Fairgrounds 1.5 acre (Family Housing) Attachment E – SDA Exhibits Site Study 1C - Fairgrounds 1.5 acre (Senior Housing) Attachment F – SDA Exhibits Site Study 2 - City-Owned 28th Street Lot (Family Housing) Attachment G – SDA Exhibits Site Study 3 - City-Owned 10th Street Lot (Family Housing) 4 June 13, 2022 Item 01

AFFORDABLE HOUSING

FINANCIAL FEASIBILITY ASSESSMENT
Prepared for:

City of Del Mar
Prepared by:

Keyser Marston Associates, Inc.

June 2022

D R A F T
Attachment A
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TABLE OF CONTENTS
I. Introduction....................................................................................................................................... 1 II. Overview of Affordable Housing Programs and Transactions.......................................................... 3 III. Financial Feasibility Analysis............................................................................................................ 12 IV. Residual Land Value Conclusions .................................................................................................... 19 V. Key Findings..................................................................................................................................... 26 VI. Limiting Conditions.......................................................................................................................... 31

APPENDIX
Glossary of Terms........................................................................................................................................ 33

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I. INTRODUCTION
A. Objective
Keyser Marston Associates, Inc. (KMA) was engaged by the City of Del Mar (City) to prepare this Affordable Housing Financial Feasibility Assessment Study (Study) to address the feasibility of potential multi-family housing developments on publicly owned sites. The City is contemplating potential public/private partnerships to facilitate development of mixed-income or affordable housing on these sites. This Study presents the economic analysis prepared by KMA to estimate the magnitude of the public financial contribution that would be required to facilitate development of projects consisting of entirely affordable units (100%) and projects with a mix of affordable (20%) and market-rate units.

B. Methodology
KMA performed the following key work tasks in completing this Study.

1. Conducted a review of regional and local market trends for residential development.

2. Collected and reviewed third-party residential market data related to inventory, rental rates, and property values.

3. Assisted City staff and the City’s urban design consultant, Stephen Dalton Architects (SDA), formulate project descriptions for potential development prototypes/sites.

4. Prepared financial pro forma models to estimate the residual land value generated by each residential prototype/site under four scenarios: (a) at 100% market-rate; (b) mixed-income; (c) 100% affordable without Low Income Housing Tax Credits (Tax Credits); and (d) 100% affordable with Tax Credits.

C. Organization of Report
This Study is organized into the following key sections:
• Following this introduction, Section II provides an overview of affordable housing programs and transactions.
• Section III presents the financial feasibility analysis for each housing development prototype prepared by SDA.

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• Section IV presents the outcomes of the financial feasibility analysis for each affordability/financing scenario analyzed by KMA.
• Section V presents the KMA key findings.
• Section VI presents limiting conditions pertaining to this Study. • A glossary for select terms referenced in this Study is presented in the Appendix.

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II. OVERVIEW OF AFFORDABLE HOUSING PROGRAMS AND TRANSACTIONS A. Affordable Housing Units Needed
Jurisdictions must revise their Housing Elements every eight years. The City adopted the 6th Cycle Housing Element Update (HEU) on March 25, 2021, obtained comments from the State of California Department of Housing and Community Development (HCD) in July 2021, and re-adopted the HEU in December 2021 with the revisions requested by HCD. The HEU plans for, and guides, the development of new housing opportunities within the City for the period 2021-2029. The HEU identifies potential locations and/or sites within the City for possible development of new housing opportunities in general, and lower income housing units in particular.

The City’s plan for accommodating its regional share of dwelling units and associated household income levels must be defined in the HEU. It is derived from the Regional Housing Needs Assessments (RHNA), determined under the following process:

1. HCD develops a regional housing needs estimate for each region in California.

2. The State sends the estimate to the San Diego Association of Governments (SANDAG) for the regional allocation that is assigned to each jurisdiction based on adopted methodology.

3. The RHNA is adopted by the SANDAG Board of Directors.

4. The jurisdiction incorporates the allocation into the Housing Element and must demonstrate adequate site capacity that can accommodate development of the housing allocation in each income category.

The City’s current RHNA estimate for the 6th Cycle is 175 total units, which is allocated as follows:

Table II-1: City of Del Mar - 6
th Cycle Housing Element RHNA Allocation of Units
Income Level Area Median
Income (AMI) Unit Count
Percent of
Total
Very Low Less than 50% of AMI 37 units 23%
Low 51% to 80% of AMI 76 units (1) 39%
Moderate 80% to 120% of AMI 31 units 19%
Above Moderate Over 120% of AMI 31 units 19%
Total 175 units 100%
(1) Includes 12 low-income units allocated during the 5th Cycle Housing Element.

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B. Who Qualifies for Affordable Housing: Income and Rent Levels Both the State and the Federal governments impose household income qualification and affordable housing cost standards for households living in affordable housing. These standards are all measured against the Area Median Income. For the City of Del Mar, the Area Median Income is based on San Diego County as a whole. Table II-2 illustrates the income standards in San Diego County for 2022.

Table II-2: Income Restrictions, 2022
Household Size
Very Low Income
Less than 50% AMI
Low Income
Between 51%
and 80% AMI
Moderate Income
Between 81%
and 120% AMI
1 Person $45,550 $72,900 $89,800
2 Persons $52,050 $83,300 $102,650
3 Persons $58,550 $93,700 $115,450
4 Persons $65,050 $104,100 $128,300
5 Persons $70,300 $112,450 $138,550
Source: State of California Department of Housing and Community Development (HCD) 2022 income limits.

Comparatively, the affordable rent calculations are based on defined benchmarks for determining the allowable rents for very low-, low-, and moderate-income units. Table II-3 illustrates the affordable rents standards in San Diego County for 2022. For comparison purposes, Table II-3 also shows current average market rents for one-, two-, and three-bedroom units based on a survey of market-rate apartment complexes located in the North Coastal cities/communities of San Diego County.

Table II-3: Affordable and Market Rents, 2022
Restricted Rents, 2022 (1)(2)
Average Market Rents
North Coastal
Cities/Communities (3)
Unit Size
Very Low
Income
30% of
50% AMI
Low Income
30% of
60% AMI
Moderate
Income
30% of
110% AMI
Studio $936 $1,123 $2,058 $2,100
1 Bedroom $1,069 $1,283 $2,351 $2,600
2 Bedroom $1,203 $1,443 $2,646 $3,100
3 Bedroom $1,336 $1,604 $2,940 $4,100
(1) Based on established benchmarks defined in H&SC Section 50053. (2) Reflects gross rent. Gross rent minus utility allowance = maximum cash rent. (3) Includes the cities and communities of Del Mar, Carlsbad, Cardiff by the Sea, Oceanside, San Diego (North Coastal areas), and Solana Beach. Source: CoStar Group, April 2022.

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C. How Affordable Housing is Delivered
The delivery of affordable housing is typically through private non-profit or for-profit developers who specialize in the development of affordable housing. The vast majority of affordable rental housing units that are household income-restricted by covenant in San Diego County have received Tax Credits. These Tax Credits significantly reduce the amount of local public assistance required to make very low- and lowincome units financially viable. Affordable housing developers “sell” the Tax Credits awarded to their project to outside investors (e.g., corporations, financial institutions, etc.) in exchange for an equity financing contribution to the project.

The Federal government created the Tax Credit program as part of the Tax Reform Act of 1986. Rental units provided in new construction and qualified acquisition and rehabilitation projects are eligible to apply for Federal Tax Credits if they fulfill the income and affordability requirements imposed by Internal Revenue Code Section 42. Federal Tax Credits represent a dollar-for-dollar credit against the project owner’s Federal income tax liability annually over a 10-year period. The affordable housing developer and Tax Credit investor form a Limited Partnership so that the Tax Credit investor is a co-owner of the project for the 15-year compliance period. Federal Tax Credits are divided into the “9% Tax Credits” and “4% Tax Credits” programs. These percentages represent the approximate percentage that is multiplied times a project’s eligible cost basis to determine the dollar amount of the annual Tax Credits that will be awarded to a project.

The key characteristics of the two Tax Credit programs are summarized below. 9% Tax Credits:

Key Characteristics
• Administered by the California Tax Credit Allocation Committee (CTCAC) program on behalf of the State of California.
• Competitively awarded by CTCAC based on a Qualified Allocation Plan (QAP) that is modified regularly by CTCAC based on changes in priorities and preferences of CTCAC as well as affordable housing advocates. • Projects compete for Tax Credits on a regional basis -- i.e., projects in San Diego County complete against other San Diego County projects -- based on a point scoring system.
• Most projects receive the maximum point score. A tie-breaker formula generally decides the outcome of projects that will be recommended for a 9% Tax Credit award.
• Rental units are household income-restricted by covenant for at least 55 years.
• Maximum household income range is 0% to 80% AMI.

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• Projects with units greater than 60% AMI must have an average income for all tenants that does not exceed 50% AMI.
• The financial benefit to the project, in the form of Tax Credit equity investment, is equal to approximately 90% of the depreciable cost basis for income-eligible units in the project. Typically, 100% of the units in an affordable housing project financed with Tax Credits are income-restricted. 4% Tax Credits:

Key Characteristics
• Awarded to rental projects financed with Tax-Exempt Multifamily Bonds. • Projects compete for a tax-exempt bond allocation through the California Debt Limit Allocation Committee (CDLAC) based on point scoring. • A tie-breaker formula generally decides the outcome of projects recommended for a bond allocation.
• Rental units are household income-restricted by covenant for at least 55 years.
• Maximum household income range is 0% to 80% AMI.
• At least 10% of the units must be allocated to households earning less than 50% AMI.
• Projects with units greater than 60% AMI must have an average income for all tenants not to exceed 60% AMI.
• Once a project has received a bond allocation from CDLAC, it is eligible for an “automatic” 4% Tax Credit. The financial benefit to the project, in terms of Tax Credit equity investment, is equal to approximately 44% of the depreciable cost basis for income-eligible units in the project.

Federal Tax Credits represent the federal government’s primary program for incentivizing the development of rental housing for very low- and low-income households. Since the Federal government adopted the Tax Credit program in 1986, nationwide over two million income-restricted rental units have been developed or acquired and rehabilitated. CTCAC administers the Federal Tax Credit program on behalf of the State of California. Demand for 9% Tax Credits is very high. In 2021, CTCAC received 182 applications for 9% Tax Credits with 106 projects, or 58% receiving a Tax Credit allocation. The 182 applicants requested $330 million in annual 9% Tax Credits, exceeding the nearly $192 million available.

The applicant success rate is higher than the previous five years, where the success rate ranged between 38% and 52%. The 106 projects awarded 9% Tax Credits, including five (5) projects in San Diego County, are projected to generate $1.9 billion in private equity investment and result in the development of 6,235 affordable rental units.

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The number of 4% Tax Credit applications and awards has varied greatly in recent years. In 2021, 354 applications for 4% Tax Credits were submitted. Of these applications, 164 applicants received a Tax Credit reservation, a 46% success rate. The applicant success rate is much lower than the previous five years, where the success rate ranged between 58% and 91%. The 164 applicants receiving a reservation, including 13 projects in San Diego County, are projected to develop 16,729 affordable rental units funded with approximately $3.6 billion in private Tax Credit equity.

D. Potential Funding Sources for Affordable Housing
Sources of funds for affordable housing developments are typically divided into three (3) categories:

1. Equity Investment

2. Supportable Debt

3. Soft Debt
• Equity Investment – The funding sources for affordable rental housing projects typically do not include any “cash” equity investment from the developer. Rather, the sole source of equity investment is the contribution made by the Tax Credit investor in exchange for the Tax Credits. • Supportable Debt – Supportable debt consists of loans supported by a project’s net operating income.

This usually takes the form of a traditional permanent loan from a private lender with a maturity date of 30 to 40 years. Projects funded with 4% Tax Credits are eligible to finance their projects with supportable debt funded from the proceeds of tax-exempt bonds, thereby resulting in a lower interest rate.
• Soft Debt – Soft debt includes funding from other Federal and/or State programs, as well as gap financing contributions from local public agencies. Some Federal and State funding sources may trigger prevailing wages, which can add 15% to 20% to construction costs. Soft loans are typically repaid with simple interest from project cash flow (net operating income less debt service), known as “residual receipts”. The following table provides examples of Federal/State programs that provide soft debt to affordable rental projects.

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Federal Programs
• Affordable Housing
Program (AHP)
Grant or loan funds from the Federal Home Loan Bank for affordable housing. Applicants for funds apply through local bank members. • HOME Investment
Partnership Program
(HOME)
Grants to public agencies and low-interest loans to developers to create and retain affordable housing.

State Programs
• Affordable Housing
Sustainable
Communities (AHSC)
Program
Administered by the Strategic Growth Council and implemented by HCD, the AHSC Program, or “Cap and Trade” program, provides funding for land use, housing, transportation, and land preservation projects to support in-fill and compact developments that reduce greenhouse gas emissions.
• Infill Incentive Grant
Program (IIG)
Funds to assist in the construction and rehabilitation of infrastructure that supports high-density affordable and mixedincome housing in in-fill locations. • Multi-Family Housing
Program (MHP)
Deferred payment loans for new construction, rehabilitation, and preservation of permanent and transitional rental housing for households earning up to 60% AMI.
• Mixed-Income Program
(MIP)
Subordinate loans to incentivize new multi-family housing projects restricting units between 30% and 120% AMI.
• No Place Like Home
(NPLH)
Provides funds used to finance capital costs and to fund operating subsidies for units rented to individuals with a serious mental illness who are homeless, chronically homeless, or at risk of chronic homelessness.
• Permanent Local
Housing Allocation
(PLHA)
Permanent source of funding for local governments for affordable housing activities, funded by a Statewide $75 recording fee on real estate documents.

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E. Local Financial Contribution
Despite the availability of Tax Credits and other Federal/State programs to fund affordable housing development, virtually all affordable rental housing projects require a local contribution. Local financing gap contributions typically include a contribution of free land and/or additional cash subsidy. This local gap financing contribution is also an important requirement for projects to compete more effectively for various State funding programs.

A land contribution can be in the form of the property sold in fee for $1.00 or via a ground lease with a payment of $1.00 per year. Cash subsidies are typically structured as a subordinate loan (soft debt) that will be repaid from residual receipts i.e., net project cash flow, subject to cash flow availability.

The amounts of local contributions can vary widely, based on construction type, tenant population (families vs. seniors), financing plan (9% vs. 4% Tax Credits), and other factors. KMA reviewed recent financing gaps filled by local jurisdictions in San Diego County. Table II-4 provides a summary of the typical per-unit contributions provided by local jurisdictions.

Table II-4: Typical Local Contributions Per Unit, Affordable Rental Housing, San Diego County, 2018 – 2022 (1)(2)
9% Tax Credits 4% Tax Credits
Family Housing $50,000 - $125,000 $0 - $125,000
Senior Housing $25,000 - $100,000 --- (3)
(1) Based on a survey of recent affordable housing transactions reviewed by KMA, primarily in San Diego County from 2018 to the present.
(2) Reflects cash subsidy only, i.e., projects received these amounts in addition to land value contribution. (3) Insufficient sample size.

In terms of total funding sources for an affordable housing development, the local financial contribution typically reflects approximately
D
20% to 25% of a project’s total sources of funds, as illustrated in Table II-5.

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Table II-5: Typical Sources of Funds Per Unit, Affordable Rental Housing, San Diego County, 2018 – 2022 (1)
9% Tax Credits 4% Tax Credits
Per Unit % Per Unit %
Supportable Debt (Permanent Loan) $40,000 9% $50,000 11% Tax Credit Equity Investment $293,000 65% $225,000 47%
Other State/Federal Funding Sources $22,000 5% $75,000 16% Local Gap Financing Contribution $95,000 21% $125,000 26% Total Development Costs $450,000 100% $475,000 100%
(1) Based on a survey of recent affordable housing transactions reviewed by KMA, primarily in San Diego County from 2018 to the present.

In general, local gap financing contributions are provided solely by the respective city and/or county government. Affordable housing developers typically request local funds by submitting a request to the local jurisdiction directly, or in response to a Notice of Funding Availability (NOFA) issued by the city or county.

County of San Diego (County) funding for affordable housing is extremely competitive. The County has issued five affordable housing NOFAs under its Innovative Housing Trust Fund program, and several other specialized funding NOFAs, since 2017. As shown in Table II-6, cumulatively under these NOFAs, the County has received a total of 68 applications, with proposals for approximately 5,200 units, and total funding requests of $238.6 million. Of these total applications, the County has funded (or proposes to fund) 31 projects, containing approximately 2,280 units, for a total funding award of $90.2 million. More than half of the projects/units proposed did not receive funding awards. The vast majority of the projects awarded County funds also received a funding contribution from the city in which their project is located.

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Table II-6: Summary of County of San Diego Affordable Housing NOFAs, 2017 – 2022 (1) Applications
Received
Applications
Awarded
Unfunded
Applications
%
Unfunded
Number of Projects 68 Projects 31 Projects 37 Projects 54% Number of Units per Year 5,205 Units 2,281 Units 2,924 Units 56% Total County Funds
Requested
$238.6 M $90.2 M $148.4 M 62%
Average per Project
Average per Unit
$3.5 M
$46,000/Unit
$2.9 M
$40,000/Unit
---
---
---
---
(1) Includes NOFAs issued and funds awarded for IHTF Rounds 1 – 5, HOME CHODO, CDBG, PLHA, PBV, and PBV-VASH between 2017 and 2022.

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III. FINANCIAL FEASIBILITY ANALYSIS
A. Development Scenarios
City staff and SDA identified three (3) potential sites for feasibility testing, as follows:
• Fairgrounds – 1.0 or 1.5-acre site at the southwest corner of Via de la Valle and Jimmy Durante Boulevard. The Fairgrounds site is owned by the State of California. • 28th Street – 0.06-acre property at 298 28th Street. The 28th Street site is owned by the City. • Civic Center – 0.10-acre property on 10th Street in the southwest corner of Del Mar Civic Center complex. The Civic Center site is owned by the City.

SDA identified a range of residential development prototypes supported by each site. The development prototypes/sites are described in Table III-1 below.

Table III-1: Residential Prototypes/Sites
Project Type Site Housing Type Acres
Units/
Acre
Units
Average
Unit Size
1A
Standalone
Project
Fairgrounds Site Family Housing 1.00 54 54 727 SF
1B
Standalone
Project
Fairgrounds Site Family Housing 1.50 53 80 745 SF
1A + 2
Scattered
Sites
Fairgrounds and
28th Street
Family Housing 1.06 57 57 689 SF
1B + 2
Scattered
Sites
Fairgrounds and
28th Street
Family Housing 1.56 55 83 718 SF
1C
Standalone
Project
Fairgrounds Site Senior Housing 1.50 52 78 534 SF
2 Standalone
Project
28th Street Site Family Housing 0.06 50 3 612 SF
3 Standalone
Project
Civic Center Site Family Housing 0.10 40 4 718 SF

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B. Affordability and Financing Scenarios
KMA prepared financial feasibility analyses of the various rental housing development prototypes formulated by SDA. The purpose of this exercise was to prepare order-of-magnitude estimates of public local gap financing contributions that would be required to facilitate the development of affordable housing for each site/development prototype. In addition to the range of development prototypes for the candidate sites, KMA also considered a mix of affordability/financing scenarios, as outlined below.

1. 100% Market-Rate

2. Mixed-Income

3. 100% Affordable without Tax Credits

4. 100% Affordable with 9% Tax Credits

5. 100% Affordable with 4% Tax Credits
Exhibit 1, on the following page, provides a summary of the development prototypes and each of the corresponding affordability/financing scenarios analyzed by KMA.

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EXHIBIT 1

DEVELOPMENT SCENARIOS BY INCOME LEVEL

AFFORDABLE HOUSING FEASIBILITY ANALYSIS

CITY OF DEL MAR
1A 1B 1A + 2 1B + 2 1C 2 3
28th Street Civic Center
Standalone Project Standalone Project
Site Size 1.00 Acre 1.50 Acres 1.06 Acre 1.56 Acres 1.50 Acres 0.06 Acres 0.10 Acre Number of Units 54 Units 80 Units 57 Units 83 Units 78 Units 3 Units 4 Units I. All Market-Rate 100% @ Market-Rate 100% @ Market-Rate 100% @ Market-Rate 100% @ Market-Rate 100% @ Market-Rate II. Mixed-Income w/o Tax Credits
Market-Rate Units 43 Units 64 Units 62 Units
Affordable Units 11 Units 16 Units 16 Units
Total Units 54 Units 80 Units 78 Units
20% @ 30% AMI 20% @ 30% AMI 20% @ 30% AMI
20% @ 50% AMI 20% @ 50% AMI 20% @ 50% AMI
20% @ 80% AMI 20% @ 80% AMI 20% @ 80% AMI
100% @ 30% AMI
w/o Tax Credits
100% @ 30% AMI
w/o Tax Credits
100% @ 30% AMI
w/o Tax Credits
100% @ 30% AMI
w/o Tax Credits
100% @ 30% AMI
w/o Tax Credits
100% @ 50% AMI
w/o Tax Credits
100% @ 50% AMI
w/o Tax Credits
100% @ 50% AMI
w/o Tax Credits
100% @ 50% AMI
w/o Tax Credits
100% @ 50% AMI
w/o Tax Credits
100% @ 80% AMI
w/o Tax Credits
100% @ 80% AMI
w/o Tax Credits
100% @ 80% AMI
w/o Tax Credits
100% @ 80% AMI
w/o Tax Credits
100% @ 80% AMI
w/o Tax Credits
9% Tax Credits 9% Tax Credits 9% Tax Credits 9% Tax Credits 9% Tax Credits 4% Tax Credits 4% Tax Credits 4% Tax Credits 4% Tax Credits 4% Tax Credits (1) The scattered sites excludes Civic Center as Low Income Housing Tax Credit regulations require scattered sites to be within a 1-mile diameter circle. (2) 28th Street site development concept not appropriate for senior housing.

Scattered site scenarios applies to 100%
Affordable developments with
Low Income Housing Tax Credits only Mixed-income not
assumed for 28th Street
site due to small number
of units
Mixed-income not
assumed for Civic Center
site due to small number
of units
III. All Affordable w/o Tax Credits
IV. All Affordable w/ Tax Credits
Tax Credit scenarios not
assumed for site due to
small number of units
Tax credit scenarios not
assumed for site due to
small number of units
Fairgrounds
w/Senior Housing (2)
Standalone Project Scattered Sites Standalone Project
Fairgrounds w/Family Housing Fairgrounds and 28th Street (1) Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar_Affordable Housing Feasibilty Assessment\6/8/2022; ema

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For each scenario, the financial feasibility analysis must take into consideration factors such as market conditions, target population, and potential funding sources, as described in Table III-2.

Table III-2: Overview of Affordability and Financing Scenarios for Development Prototypes Affordability/Financing
Scenario Description Key Issues for Consideration

1. 100% Market-Rate A residential development with all
units at market-rate rents
• Currently achievable market rental
rates at project location
• Target developer returns reflective of
current market conditions
• Does not assume City inclusionary
housing requirement

2. Mixed-Income A residential development that
incorporates a mix of affordable
and market-rate development, with
varying levels of affordable housing
set aside, specifically:
• 20% @ extremely low (30%
AMI) / 80% market-rate
• 20% @ very low (50% AMI) /
80% market-rate
• 20% @ low (80% AMI) / 80%
market-rate
• Mixed-income scenario not assumed
for smaller sites due to small number
of units
• Currently achievable market rental
rates for market-rate units
• Target developer returns reflective of
current market conditions for marketrate units
• Restricted rent levels for affordable
units

3. 100% Affordable
without Tax Credits
An 100% affordable housing
development financed without Tax
Credits, specifically:
• 100% @ extremely low (30%
AMI)
• 100% @ very low (50% AMI)
• 100% @ low (80% AMI)
• Restricted rent levels for affordable
units
• Scattered site scenarios only apply to
100% affordable developments with
D
Tax Credits

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Table III-2: Overview of Affordability and Financing Scenarios for Development Prototypes Affordability/Financing
Scenario Description Key Issues for Consideration

4. 100% Affordable
with 9% Tax Credits
100% affordable housing
development financed with 9% Tax
Credits
• Average affordability typically
at or below 50% AMI
• Site location must be within close
proximity to amenities (i.e., public
transit, public schools, social service
facilities, pharmacies, etc.) to
competitively score for 9% Tax
Credits
• Scattered sites are required to be
within a 1-mile diameter circle
• Scattered site development scenario
does not work for senior housing
development due to the level of
services typically needed by senior
tenants
• Prevailing wages are not triggered if
no other Federal/State funds are
assumed

5. 100% Affordable
with 4% Tax Credits
An 100% affordable housing
development financed with taxexempt bonds and 4% Tax Credits • Average affordability typically at
or below 50% AMI
• Scattered sites are required to be
within a 1-mile diameter circle
• Scattered site development scenario
does not work for senior housing
developments due to the level of
services typically needed by senior
tenants
• Prevailing wages may be triggered as
additional funding from Federal/State
sources are typically required
C. Residual Land Value Methodology
For each affordability and financing scenario described above, KMA prepared a financial pro forma analysis to determine the supportable residual land value. Residual land value is defined as the maximum land value supported by a proposed development. It is calculated by estimating the total value upon completion, including all potential Federal and State funding sources, and subtracting the estimated total

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development costs (other than land acquisition costs) required to develop the project. Each residual land value model incorporates estimates of development costs, market-rate and/or affordable rents, and target developer returns (for market-rate housing) or potential funding sources (for affordable housing).

KMA has compiled these inputs and assumptions based on industry data sources, current market research, and our ongoing database of comparable housing developments/transactions.

Specifically, the residual land value for a residential development is derived from the following calculation illustrated in Table III-3.

Table III-3: Residual Land Value Calculation
The residual land value conclusion provides an indicator of relative financial feasibility for a specific development proposal subject to the assumed affordability and financing scenario. A positive residual land value represents the amount that the developer could pay to the landowner. In other words, the project would not require any cash subsidy. A negative residual land value indicates the amount of cash subsidy that a developer would need to develop the project, in addition to the contribution of free land.

The application of this approach to the mixed-income scenarios vs. 100% affordable scenarios is more fully described below.

Mixed-Income Scenarios
The magnitude of the public financial contribution required to develop affordable housing in a mixedincome development is measured by comparing (a) the residual land value for the 100% market-rate development vs. (b) the residual land value assuming a range of targeted affordability levels are imposed.

If the difference in residual land value is a positive amount, the land value supported by the market-rate units can be used to offset the financial impact of the affordable units. If the difference is a negative amount, the land value supported by the market-rate units falls short of what is needed to offset the financial impact of the affordable units, and an additional public financial contribution is needed.

Total Value at
Completion
(including
Federal/State
funding sources)
Estimated
Development
Costs
(excluding land)
Residual
Land Value
- =

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100% Affordable Housing Scenarios
For the 100% affordable housing scenarios (both with and without Tax Credits), the residual land value reflects the difference between total development costs and total potential funding sources. The difference is typically a negative amount and represents the financing gap associated with the affordable housing development. In other words, development of a 100% affordable housing development would need free land and a public financial contribution equal to the negative residual land value amount.

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IV. RESIDUAL LAND VALUE CONCLUSIONS
A. Overview of Residual Land Value Outcomes
Exhibit 2, at the end of this section, presents a comprehensive summary of the KMA financial feasibility models. The exhibit details residual land value and gap financing conclusions for all of the sites and development prototypes studied, under the various affordability and financing scenarios. The key financial outcomes from the financial feasibility models for each affordability/financing scenario are highlighted below.

B. 100% Market-Rate Scenarios
As shown in Table IV-1, residual land value conclusions for the Fairgrounds sites developed as 100% market-rate rental housing ranged from $30 to $97 per SF land. Residual land value conclusions for the 28th Street and Civic Center sites were estimated at $135 and $203 per SF, respectively. These financial models do not assume the imposition of the City’s inclusionary housing requirement.

Table IV-1: Residual Land Value – 100% Market-Rate
Residual Land Value
Total Per Unit Per SF Land
• Scenario 1A
Fairgrounds w/ Family Housing
Standalone Project

1.00 Acre
$4,234,000 $78,000 $97
• Scenario 1B
Fairgrounds w/ Family Housing
Standalone Project

1.50 Acres
$5,157,000 $64,000 $79
• Scenario 1C
Fairgrounds w/ Senior Housing
Standalone Project

1.50 Acres
$1,972,000 $25,000 $30
• Scenario 2
28th Street
Standalone Project
$354,000 $118,000 $135
• Scenario 3
Civic Center
Standalone Project
$884,000 $221,000 $203

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C. Mixed-Income Scenarios
Table IV-2 summarizes the residual land value conclusions for the mixed-income scenarios at three (3) levels of affordability: 20% at 30% AMI, 20% at 50% AMI, and 20% at 80% AMI. As shown in the table, all of the residual land values for the 20% at 30% AMI and 20% at 50% AMI were found to be negative. These residual land value conclusions indicate that the project would require free land plus a gap financing contribution in the amount of the negative residual land value. In the case of the 20% at 80% AMI scenarios, two (2) of the prototypes were found to be negative and one (1) of the prototypes yielded a nominal positive residual land value -- the Fairgrounds w/ Family Housing on 1.0 Acre. This positive residual land value conclusion indicates that a developer would not require subsidy for the project and in fact could make a payment for the land. As shown, KMA estimates, that a developer developing the Fairgrounds w/ Family Housing on 1.0 Acre could pay $631,000 for the site.

Table IV-2: Residual Land Value – Mixed-Income Scenarios Residual Land Value
Total Per Unit Per SF Land
Mixed-Income – 20% @ 30% AMI
• Scenario 1A
Fairgrounds w/ Family Housing
Standalone Project

1.00 Acre
($2,325,000) ($43,000) ($53)
• Scenario 1B
Fairgrounds w/ Family Housing
Standalone Project

1.50 Acres
($4,423,000) ($55,000) ($68)
• Scenario 1C
Fairgrounds w/ Senior Housing
Standalone Project

1.50 Acres
($5,023,000) ($64,000) ($77)
Mixed-Income – 20% @ 50% AMI
• Scenario 1A
Fairgrounds w/ Family Housing
Standalone Project

1.00 Acre
($1,246,000) ($23,000) ($29)
• Scenario 1B
Fairgrounds w/ Family Housing
Standalone Project

1.50 Acres
($2,875,000) ($36,000) ($44)

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Table IV-2: Residual Land Value – Mixed-Income Scenarios Residual Land Value
Total Per Unit Per SF Land
• Scenario 1C
Fairgrounds w/ Senior Housing
Standalone Project

1.50 Acres
($3,615,000) ($46,000) ($55)
Mixed-Income – 20% @ 80% AMI
• Scenario 1A
Fairgrounds w/ Family Housing
Standalone Project

1.00 Acre
$631,000 $12,000 $14
• Scenario 1B
Fairgrounds w/ Family Housing
Standalone Project

1.50 Acres
($82,000) ($1,000) ($1)
• Scenario 1C
Fairgrounds w/ Senior Housing
Standalone Project

1.50 Acres
($1,479,000) ($19,000) ($23)
D. 100% Affordable without Tax Credits
Table IV-3 summarizes the residual land value conclusions for the 100% affordable scenarios without Tax Credits at three (3) levels of affordability: 100% at 30% AMI, 100% at 50% AMI, and 100% at 80% AMI. As shown in the table, all of these scenarios yielded substantial negative residual land values. For the 100% at 30% AMI scenarios, the estimated residual land values ranged from negative $393,000 to negative $500,000 per unit, depending on the site/prototype. For the 100% at 50% AMI scenarios, residual land values were found to range from negative $286,000 to negative $381,000 per unit. In the case of the 100% at 80% AMI scenarios, residual land value estimates for the various sites/prototypes ranged from negative $119,000 to negative $184,000 per unit. These residual land value conclusions indicate that the project would require free land plus a gap financing contribution in the amount of the negative residual land value. These conclusions are not surprising in that these financing scenarios do not rely on Tax Credits or any other Federal or State funding sources.

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Table IV-3: Residual Land Value – 100% Affordable without Tax Credits Residual Land Value
Total Per Unit Per SF Land
100% Affordable without Tax Credits – 100% @ 30% AMI
• Scenario 1A
Fairgrounds w/ Family Housing
Standalone Project

1.00 Acre
($25,762,000) ($477,000) ($591)
• Scenario 1B
Fairgrounds w/ Family Housing
Standalone Project

1.50 Acres
($39,981,000) ($500,000) ($612)
• Scenario 1C
Fairgrounds w/ Senior Housing
Standalone Project

1.50 Acres
($30,689,000) ($393,000) ($470)
• Scenario 2
28th Street
Standalone Project
($1,292,000) ($431,000) ($494)
• Scenario 3
Civic Center
Standalone Project
($1,708,000) ($427,000) ($392)
100% Affordable without Tax Credits – 100% @ 50% AMI
• Scenario 1A
Fairgrounds w/ Family Housing
Standalone Project

1.00 Acre
($19,403,000) ($359,000) ($445)
• Scenario 1B
Fairgrounds w/ Family Housing
Standalone Project

1.50 Acres
($30,454,000) ($381,000) ($466)
• Scenario 1C
Fairgrounds w/ Senior Housing
Standalone Project

1.50 Acres
($22,329,000) ($286,000) ($342)
• Scenario 2
28th Street
Standalone Project
($984,000) ($328,000) ($376)

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Table IV-3: Residual Land Value – 100% Affordable without Tax Credits Residual Land Value
Total Per Unit Per SF Land
• Scenario 3
Civic Center
Standalone Project
($1,224,000) ($306,000) ($281)
100% Affordable without Tax Credits – 100% @ 80% AMI
• Scenario 1A
Fairgrounds w/ Family Housing
Standalone Project

1.00 Acre
($9,547,000) ($177,000) ($219)
• Scenario 1B
Fairgrounds w/ Family Housing
Standalone Project

1.50 Acres
($14,746,000) ($184,000) ($226)
• Scenario 1C
Fairgrounds w/ Senior Housing
Standalone Project

1.50 Acres
($9,305,000) ($119,000) ($142)
• Scenario 2
28th Street
Standalone Project
($434,000) ($145,000) ($166)
• Scenario 3
Civic Center
Standalone Project
($499,000) ($125,000) ($115)
E. 100% Affordable with Tax Credits
Table IV-4 summarizes the residual land value conclusions for the 100% affordable scenarios with Tax Credits. All scenarios assume a maximum average affordability level not to exceed 50% AMI, as this income targeting will be required for projects to compete effectively for Tax Credits and/or other Federal/State funding sources. Overall, estimated residual land values for the 9% Tax Credits financing scenarios ranged from negative $113,000 to negative $146,000 per unit. Residual land values for the 4% Tax Credits financing scenarios were found to range from negative $110,000 to negative $168,000 per unit. These residual land value conclusions indicate that the project would require free land plus a gap financing contribution in the amount of the negative residual land value. Notably, these negative residual land values are substantially lower than the “without Tax Credits” scenarios reviewed above. These conclusions are not surprising in that these financing scenarios are leveraged with funding from Tax Credits and/or other Federal or State funding sources.

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The negative residual land value conclusions in this Study are at the high end of the range of, or exceed the typical, local financing gap contribution amounts presented in Section II-E above. These higher negative residual land values are due in part to current pro forma inputs and assumptions that reflect the recent upsurge in construction costs due to ongoing supply chain interruptions, the rising cost of materials, significant increases in transportation costs, and competition for workers in the construction trades.

Table IV-4: Residual Land Value – 100% Affordable with Tax Credits Residual Land Value
Total Per Unit
100% Affordable with Tax Credits – 9% Tax Credits
• Scenario 1A
Fairgrounds w/ Family Housing
Standalone Project

1.00 Acre
($6,798,000) ($126,000)
• Scenario 2B
Fairgrounds w/ Family Housing
Standalone Project

1.50 Acres
($10,648,000) ($133,000)
• Scenario 1A + 2
Fairgrounds and 28th Street
Scattered Sites

1.06 Acres
($7,607,000) ($133,000)
• Scenario 1B + 2
Fairgrounds and 28th Street
• Scattered Sites

1.56 Acres
($12,146,000) ($146,000)
• Scenario 1C
Fairgrounds w/ Senior Housing
Standalone Project

1.50 Acres
($8,809,000) ($113,000)
100% Affordable without Tax Credits – 4% Tax Credits
• Scenario 1A
Fairgrounds w/ Family Housing
Standalone Project

1.00 Acre
($9,061,000) ($168,000)

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Table IV-4: Residual Land Value – 100% Affordable with Tax Credits Residual Land Value
Total Per Unit
• Scenario 1B
Fairgrounds w/ Family Housing
Standalone Project

1.50 Acres
($12,620,000) ($158,000)
• Scenario 1A +2
Fairgrounds and 28th Street
Scattered Sites

1.06 Acres
($8,983,000) ($158,000)
• Scenario 1B +2
Fairgrounds and 28th Street
• Scattered Sites
• 1.56 Acres
($13,345,000) ($161,000)
• Scenario 1C
Fairgrounds w/ Senior Housing
Standalone Project

1.50 Acres
($8,558,000) ($110,000)

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V. KEY FINDINGS
The KMA financial feasibility analyses of the various sites/prototypes and affordability and financing scenarios yield the following principal conclusions.

1. The local financial contribution for affordable housing development typically reflects approximately 20% to 25% of a project’s total sources of funds.

2. Only one (1) mixed-income scenario comprising 20% affordable units and 80% market-rate units -- the Fairgrounds w/ Family Housing on 1.0 Acre -- yielded a nominal positive residual land value.

3. The remaining mixed-income scenarios are not feasible without additional cash contribution from a local public agency. In other words, the positive residual land value supported by the market-rate units (80% of total unit count) is not sufficient to offset fully the negative financial impact of the affordable units (20% of units). In order to be feasible, these scenarios would require additional cash subsidy in the following ranges:
20% @ 30% AMI $211,000 to $314,000 per affordable unit
20% @ 50% AMI $113,000 to $226,000 per affordable unit
20% @ 80% AMI $5,000 to $92,000 per affordable unit

4. Developing 100% affordable projects without Tax Credits or other Federal/State funding sources yields extremely high financing gaps that would need to be funded by a local public agency. In order to be feasible, these scenarios would require additional cash subsidy ranging from $119,000 to $500,000 per unit, as shown below.
100% @ 30% AMI $393,000 to $500,000 per affordable unit 100% @ 50% AMI $286,000 to $381,000 per affordable unit 100% @ 80% AMI $119,000 to $184,000 per affordable unit In Del Mar, the most likely scenario for developing affordable units is by using Tax Credits and/or other Federal/State funding programs. These scenarios result in substantially lower financing gaps, estimated to range from $110,000 to $168,000 per affordable unit, as shown below.

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9% Tax Credits @ average not to exceed 50% AMI $113,000 to $146,000 per affordable unit 4% Tax Credits @ average not to exceed 50% AMI $110,000 to $168,000 per affordable unit

5. The City is seeking to create at least 61 lower-income units. Of the scenarios studied, the most likely scenario to create 61 lower income units would be development of at least 1.5 acres at the Fairgrounds or some combination of the Fairgrounds development, ranging from 54 to 80 units, and the 28th Street and/or Civic Center sites (3 and 4 units, respectively).

While there are many combinations and approaches that could meet the City’s goals, Table V-1 illustrates a few approaches and the resulting total financial contribution that would be required from the City and/or County. As shown, these possible approaches require a City and/or County total financing gap contribution, in addition to free land, ranging from $7.7 million to $13.3 million. This equates to $127,000 to $161,000 per affordable unit.

Table V-1: Estimate of Total Financing Gap for Alternative Approaches to Create 61 LowerIncome Units Scenario Site/Prototype Units Financing
Scenario
Financing Gap (1)
Low High
1B • Fairgrounds w/
Family Housing
Standalone
Project

1.50 Acres
80 units with Tax Credits $10.6 M
$133,000
per unit
$12.6 M
$158,000
per unit
1C • Fairgrounds w/
Senior Housing
Standalone
Project

1.50 Acres
78 units with Tax Credits $8.6 M
$110,000
per unit
$8.8 M
$113,000
per unit
1B + 2 • Fairgrounds and
28th Street
Scattered Sites

1.56 Acres
83 units with Tax Credits $12.1 M
$146,000
per unit
$13.3 M
$161,000
per unit

D R A F T
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Table V-1: Estimate of Total Financing Gap for Alternative Approaches to Create 61 LowerIncome Units Scenario Site/Prototype Units Financing
Scenario
Financing Gap (1)
Low High
1A + 2 +
3 • Fairgrounds w/
Family Housing
Standalone
Project

1.0 Acres
• 28th Street
• Standalone
Project
• Civic Center
Standalone
Project

1.16 Acres
61 units 1A – with Tax
Credits
2 and 3
@ 80% AMI
$7.7 M
$127,000
per unit
$10.0 M
$164,000
per unit
(1) Reflects gap financing contribution needed in addition to free land.

D R A F T
34 June 13, 2022 Item 01
EXHIBIT 2

SUMMARY TABLE - RESIDUAL LAND VALUES

AFFORDABLE HOUSING FEASIBILITY ANALYSIS

CITY OF DEL MAR
1A 1B 1A + 2 1B + 2 1C 2 3
28th Street Civic Center
Standalone Project Standalone Project
Site Size 1.00 Acre 1.50 Acres 1.06 Acre 1.56 Acres 1.50 Acres 0.06 Acres 0.10 Acre Number of Units 54 Units 80 Units 57 Units 83 Units 78 Units 3 Units 4 Units I. All Market-Rate 100% @ Market-Rate 100% @ Market-Rate 100% @ Market-Rate 100% @ Market-Rate 100% @ Market-Rate A. Total Residual Land Value $4,234,000 $5,157,000 $1,972,000 $354,000 $884,000 Per Unit $78,000 $64,000 $25,000 $118,000 $221,000
Per SF Land $97 $79 $30 $135 $203
II. Mixed-Income w/o Tax Credits
20% @ 30% AMI 20% @ 30% AMI 20% @ 30% AMI
A. Total Residual Land Value ($2,325,000) ($4,423,000) ($5,023,000) Per Total Unit ($43,000) ($55,000) ($64,000)
Per Affordable Unit ($211,000) ($276,000) ($314,000)
Per SF Land ($53) ($68) ($77)
Difference vs. 100% Market-Rate ($596,000) ($599,000) ($437,000) Per Affordable Unit
20% @ 50% AMI 20% @ 50% AMI 20% @ 50% AMI
B. Total Residual Land Value ($1,246,000) ($2,875,000) ($3,615,000) Per Total Unit ($23,000) ($36,000) ($46,000)
Per Affordable Unit ($113,000) ($180,000) ($226,000)
Per SF Land ($29) ($44) ($55)
Difference vs. 100% Market-Rate ($498,000) ($502,000) ($349,000) 20% @ 80% AMI 20% @ 80% AMI 20% @ 80% AMI
C. Total Residual Land Value $631,000 ($82,000) ($1,479,000) Per Total Unit $12,000 ($1,000) ($19,000)
Per Affordable Unit $57,000 ($5,000) ($92,000)
Per SF Land $14 ($1) ($23)
Difference vs. 100% Market-Rate ($328,000) ($327,000) ($216,000) Scattered site scenarios applies to 100%
Affordable developments with
Low Income Housing Tax Credits only
Mixed-income not
assumed for 28th Street
site due to small number
of units
Mixed-income not
assumed for Civic Center
site due to small number
of units
Fairgrounds w/Family Housing Fairgrounds and 28th Street (1) Fairgrounds
w/Senior Housing (2)
Standalone Project Scattered Sites Standalone Project
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar_Affordable Housing Feasibilty Assessment\6/8/2022; ema

35 June 13, 2022 Item 01
EXHIBIT 2

SUMMARY TABLE - RESIDUAL LAND VALUES

AFFORDABLE HOUSING FEASIBILITY ANALYSIS

CITY OF DEL MAR
1A 1B 1A + 2 1B + 2 1C 2 3
28th Street Civic Center
Standalone Project Standalone Project
Site Size 1.00 Acre 1.50 Acres 1.06 Acre 1.56 Acres 1.50 Acres 0.06 Acres 0.10 Acre Number of Units 54 Units 80 Units 57 Units 83 Units 78 Units 3 Units 4 Units Fairgrounds w/Family Housing Fairgrounds and 28th Street (1) Fairgrounds
w/Senior Housing (2)
Standalone Project Scattered Sites Standalone Project
III. All Affordable w/o Tax Credits
100% @ 30% AMI
w/o Tax Credits
100% @ 30% AMI
w/o Tax Credits
100% @ 30% AMI
w/o Tax Credits
100% @ 30% AMI
w/o Tax Credits
100% @ 30% AMI
w/o Tax Credits
A. Total Residual Land Value ($25,762,000) ($39,981,000) ($30,689,000) ($1,292,000) ($1,708,000) Per Affordable Unit ($477,000) ($500,000) ($393,000) ($431,000) ($427,000) Per SF Land ($591) ($612) ($470) ($494) ($392)
100% @ 50% AMI
w/o Tax Credits
100% @ 50% AMI
w/o Tax Credits
100% @ 50% AMI
w/o Tax Credits
100% @ 50% AMI
w/o Tax Credits
100% @ 50% AMI
w/o Tax Credits
B. Total Residual Land Value ($19,403,000) ($30,454,000) ($22,329,000) ($984,000) ($1,224,000) Per Affordable Unit ($359,000) ($381,000) ($286,000) ($328,000) ($306,000) Per SF Land ($445) ($466) ($342) ($376) ($281)
100% @ 80% AMI
w/o Tax Credits
100% @ 80% AMI
w/o Tax Credits
100% @ 80% AMI
w/o Tax Credits
100% @ 80% AMI
w/o Tax Credits
100% @ 80% AMI
w/o Tax Credits
C. Total Residual Land Value ($9,547,000) ($14,746,000) ($9,305,000) ($434,000) ($499,000) Per Affordable Unit ($177,000) ($184,000) ($119,000) ($145,000) ($125,000) Per SF Land ($219) ($226) ($142) ($166) ($115)
IV. All Affordable w/ Tax Credits
A. 9% Tax Credits 9% Tax Credits 9% Tax Credits 9% Tax Credits 9% Tax Credits 9% Tax Credits Total Residual Land Value ($6,798,000) ($10,648,000) ($7,607,000) ($12,146,000) ($8,809,000) Per Unit ($126,000) ($133,000) ($133,000) ($146,000) ($113,000) B. 4% Tax Credits 4% Tax Credits 4% Tax Credits 4% Tax Credits 4% Tax Credits 4% Tax Credits Total Residual Land Value ($9,061,000) ($12,620,000) ($8,983,000) ($13,345,000) ($8,558,000) Per Unit ($168,000) ($158,000) ($158,000) ($161,000) ($110,000) (1) The scattered sites excludes Civic Center as Low Income Housing Tax Credit regulations require scattered sites to be within a 1-mile diameter circle. (2) 28th Street site development concept not appropriate for senior housing.

Scattered site scenarios applies to 100%
Affordable developments with
Low Income Housing Tax Credits only
Tax Credit scenarios not
assumed for site due to
small number of units
Tax credit scenarios not
assumed for site due to
small number of units
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar_Affordable Housing Feasibilty Assessment\6/8/2022; ema

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VI. LIMITING CONDITIONS

1. The analysis contained in this document is based, in part, on data from secondary sources such as state and local government, planning agencies, real estate brokers, and other third parties. While KMA believes that these sources are reliable, we cannot guarantee their accuracy.

2. The analysis assumes that neither the local nor national economy will experience a major recession. If an unforeseen change occurs in the economy, the conclusions contained herein may no longer be valid.

3. The findings are based on economic rather than political considerations. Therefore, they should be construed neither as a representation nor opinion that government approvals for development can be secured.

4. Development opportunities are assumed to be achievable during the specified time frame. A change in development schedule requires that the conclusions contained herein be reviewed for validity.

5. The analysis, opinions, recommendations and conclusions of this document are KMA's informed judgment based on market and economic conditions as of the date of this report. Due to the volatility of market conditions and complex dynamics influencing the economic conditions of the building and development industry, conclusions and recommended actions contained herein should not be relied upon as sole input for final business decisions regarding current and future development and planning.

6. Any estimates of development costs, capitalization rates, income and/or expense projections are based on the best available project-specific data as well as the experiences of similar projects. They are not intended to be projections of the future for the specific project. No warranty or representation is made that any of the estimates or projections will actually materialize.

7. KMA is not advising or recommending any action be taken by City with respect to any prospective, new or existing municipal financial products or issuance of municipal securities (including with respect to the structure, timing, terms and other similar matters concerning such financial products or issues).

8. KMA is not acting as a Municipal Advisor to the City and does not assume any fiduciary duty hereunder, including, without limitation, a fiduciary duty to the City pursuant to Section 15B of the Exchange Act with respect to the services provided hereunder and any information and material contained in KMA’s work product.

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9. The City shall discuss any such information and material contained in KMA’s work product with any and all internal and/or external advisors and experts, including its own municipal advisors, that it deems appropriate before acting on the information and material.

D R A F T
38 June 13, 2022 Item 01

APPENDIX

GLOSSARY OF TERMS
Affordable Housing Financial Feasibility Assessment
City of Del Mar

D R A F T
39 June 13, 2022 Item 01
Acquisition Costs Purchase price, fees, and holding costs required to buy property
Affordable Housing Program (AHP) Established by the Federal Home Loan Bank to finance the development of owner-occupied housing for low- and
moderate-income households with incomes at 80% AMI or less or rental housing where at least 20% of the units are affordable to very low-income households. Applicants apply for grant or loan funds through local bank members.

Affordable Housing And Sustainable
Communities (AHSC) Program
Administered by the Strategic Growth Council and
implemented by the Department of Housing and Community
Development (HCD), the AHSC Program provides grants and/or loans towards land-use, housing, transportation, and land preservation projects to support infill and compact
development that reduce greenhouse gas ("GHG") emissions.

AMI Area Median Income. Reflects the midpoint of a region's household income distribution.

CDLAC California Debt Limit Allocation Committee. Allocates Federal tax-exempt bonds and 4% Low Income Housing Tax Credits to affordable housing developers.

CTCAC California Tax Credit Allocation Committee. Administers California's Federal and State Low Income Housing Income Housing Tax Credit program. Awards 9% tax credits to
developers.

Financing Gap Amount of capital that must be raised after a developer secures conventional financing, tax-exempt bonds, or Low Income Housing Tax Credits. Also referred to as soft funding. Typically funded by local public agencies such as cities or housing authorities.

Housing Element Update (HEU) The Housing Element is a required component of every jurisdiction's General Plan and must comply with specific standards and requirements set by the state. The Housing Element must be updated every eight years, with an additional progress report created annually. The Housing Element of the General Plan identifies the City’s housing conditions and needs, establishes goals, objectives, and policies to guide future housing decisions, and provides an array of programs to meet a City's housing priorities.

GLOSSARY OF TERMS
Affordable Housing Financial Feasibility Assessment
City of Del Mar
Prepared by: Keyser Marston Associates, Inc.

Filename i:\Del Mar - Affordable Housing - Glossary;6/8/2022;lag

40 June 13, 2022 Item 01
Glossary of Terms (Cont'd.)
Affordable Housing Financial Feasibility Assessment
Infill Infrastructure Grant Program (IIG) Administered by the California Department of Housing and Community Development (HCD). Promotes the development of infill housing by providing gap funding for infrastructure improvements for residential or mixed-use infill development projects or areas.

Low Income Household Households earning up to 80% of Area Median Income (AMI).

Low income Housing Tax Credits Created by the Federal Tax Reform Act of 1986. The Federal government allocates tax credits to state housing agencies.

Developers apply for tax credits from the state agency. The developer "sells" the tax credit to investors who claim the credits on their Federal or State income tax returns. Funds raised from the sale of tax credits to the investors are used to develop affordable housing.

Market Rent Rent a property, building, or unit would command on the open market if it were currently vacant and available.

Mixed-Income Residential development serving a range of income levels.

Includes a mix of market-rate units and affordable units.

Multi-Family Housing Program (MHP) Administered by the California Department of Housing and Community Development (HCD). Provides 55-year deferred
payment loans for affordable housing.

Moderate Income Household Households earning up to 120% of Area Median Income (AMI).

Qualified Action Plan (QAP) The QAP sets out the state's eligibility priorities and criteria for awarding federal tax credits to housing properties.

Regional Housing Needs Assessment
(RHNA)
Mandated by State Housing Law as part of the periodic process of updating local housing elements of the General Plan. RHNA quantifies the need for housing within each jurisdiction during specified planning periods.

Residual Land Value The maximum land value supported by a proposed development. It is calculated by estimating the total value upon completion and subtracting the estimated total
development costs (other than land acquisition costs) required to develop the project.

Prepared by: Keyser Marston Associates, Inc.

Filename i:\Del Mar - Affordable Housing - Glossary;6/8/2022;lag

41 June 13, 2022 Item 01
Glossary of Terms (Cont'd.)
Affordable Housing Financial Feasibility Assessment
San Diego Association of Governments
(SANDAG)
An association of local San Diego County governments. It is the metropolitan planning organization for the County of San Diego , with policy makers consisting
of mayors, councilmembers, and County Supervisors. SANDAG also has capital planning and fare setting powers for
the county's transit systems, the San Diego Metropolitan Transit System and North County Transit District
Tax Credits See Low Income Housing Tax Credits
Type III over Type I Construction Mid-rise wood-frame construction, with non-combustible materials for exterior bearing walls, over concrete parking podium.

Utility Allowance Estimated amount that affordable housing tenants need to set aside to pay for utilities. Typically subtracted by landlord from tenant's maximum monthly rent limit.

Very Low Income Household Household earning up to 50% of Area Median Income (AMI).

Prepared by: Keyser Marston Associates, Inc.

Filename i:\Del Mar - Affordable Housing - Glossary;6/8/2022;lag

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Del Mar Affordable Housing
Site Specific Studies

PREPARED BY STEPHEN DALTON ARCHITECTS

IN COOPERATION WITH THE PLANNING AND COMMUNITY DEVELOPMENT DEPARTMENT OF THE CITY

OF DEL MAR
JUNE 7, 2022
Attachment B
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TABLE OF CONTENTS
I. INTRODUCTION........................................................................................................................... 3 II. GENERAL FAIRGROUNDS ZONING ASSESSMENT....................................................................... 8 III. FAIRGROUNDS 1.0 – FAMILY HOUSING.................................................................................. 11 IV. FAIRGROUNDS 1.5 – FAMILY HOUSING.................................................................................. 13 V. FAIRGROUNDS 1.5 – SENIOR HOUSING................................................................................... 15 VI. 28TH STREET – FAMILY HOUSING............................................................................................ 17 VII. CIVIC CENTER – FAMILY HOUSING ........................................................................................ 20 VIII. EXHIBITS................................................................................................................................ 23 44 June 13, 2022 Item 01
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I. INTRODUCTION
To fulfill a portion of the City’s share of regional housing needs, the Housing Element identified potential sites that are publicly-owned and currently not subject to the typical zoning applicable to residential use. To determine the development potential and feasibility for affordable housing, a site-specific zoning assessment and architectural concepts were prepared for each site.

Housing Element Sites Studied in this Assessment:

The three sites studied in this assessment include the following publicly-owned sites:
• State Fairgrounds property: SW corner Via de la Valle & Jimmy Durante Blvd APN: 298-271-03
This potential housing site is owned by the State of California. The State’s General Services Department 22nd District Agricultural Association (22nd DAA) is the operator the Del Mar Fairgrounds. The Fairgrounds site is designated and zoned FairgroundsRacetrack (FR) in the City of Del Mar Community Plan (General Plan) and Zoning Code.

The site is also located within the Floodplain Overlay Zone. Site specific concepts for the Fairgrounds were considered using land on either a 1-acre or 1.5-acre site. As a Stateowned property, development at this location is not subject to local zoning requirements. • 28th Street: North lot at east end of 28th Street
APN: 299-030-12
This City-owned parcel is a small vacant lot that is 0.06 acres in size and designated for Public Facilities (PF) in the Community Plan. The corresponding zoning action to reflect PF zoning (adopted in 1997) on this parcel was not accurately reflected in the City’s Local Coastal Program (LCP) zoning maps (certified in 2001). A clean-up action is being processed by the City to address this error. This site is also located within the Floodplain Overlay Zone.
• Civic Center: 10th Street in the SW corner of Del Mar Civic Center APN: 300-093-17
This City-owned parcel is one of multiple contiguous parcels that make up the City of Del Mar’s Civic Center, which is located along Camino del Mar between 10th Street and 11th Street in the City’s downtown. The site is a small vacant lot that is 0.10 acres in size and is designated and zoned PF in the Community Plan and Zoning Code.

Exhibit A provides a vicinity map that indicates the respective location of the three sites. 45 June 13, 2022 Item 01
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Assumptions Factored into the Site-Specific Studies:

The following assumptions were factored into the site-specific studies as further described below:
• The City is seeking to create at least 61 lower income units on publicly owned sites. • Development of affordable housing will require public funding. • Tax credit programs are the most likely funding source, which means the project must be designed to meet the applicable criteria for eligibility. • Family Housing is the housing type that best aligns with the City’s Housing Element objectives and eligibility criteria for available tax credit programs. • The tax credit program “scattered sites” provision is one option for the City to meet its goal of 61 lower income units through a project with development on non-contiguous sites.

Therefore, the site-specific studies assume development of the sites with multiple dwelling unit structures in which all units are rent restricted for lower-income households and financed with a public funding source such as California’s Tax Credit Allocation Committee (CTCAC). Program elements such as unit size and type were determined for consistency with CTCAC requirements.

CTCAC identifies three main housing types that are eligible for public funding:
• Family Housing (also known as Large Family): One CTCAC requirement for this housing type that has a significant impact on the building form and size is a prescribed number of 2- and 3-bedroom units. A project in this category is required to have a minimum of 25% 2-bedroom units and 25% 3-bedroom units. Because of this requirement, Family Housing projects tend to be larger than other eligible housing types of a similar unit count. • Senior Housing: For this housing type, CTCAC prescribes that 1-bedroom and studio units comprise a minimum of 80% of the total unit count, thus generating a relatively smaller building when compared to a Family Housing project of a similar unit count. • Special Needs Housing: There are several CTCAC requirements for this housing type depending on which population is being served. Populations can include individuals who are homeless, those with physical or mental health disabilities, or youth transitioning from foster care, among others. Seniors and families can also be a part of the population served in this housing type. Unit types for Special Needs Housing are dependent on the specific population intended to be served, but Single Room Occupancy (SRO) and studio units are a common unit type for this housing type.

The site-specific studies primarily focused on concepts for affordable units in the Family Housing category because this type of housing with a mix of one bedroom, two bedroom, and three 46 June 13, 2022 Item 01
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bedroom units can accommodate the largest population and the eligibility criteria for project financing does not require additional restrictions beyond the restricted income requirement. Senior Housing was considered as one potential scenario for housing at the Fairgrounds site to provide a comparison. However, due to the unique requirements of both Senior Housing and Special Needs Housing populations as well as the limited size of the 28th Street and Civic Center sites, the potential design scenarios that would have been needed to try and accommodate these populations consistent with the tax credit program design criteria would result in fewer units and were therefore determined to be less suitable options for meeting the City’s housing objectives as set forth in the Housing Element.

The CTCAC funding source applies to sites greater than one-half acre in size; therefore, neither the 28th Street nor Civic Center sites would be eligible for CTCAC funding as standalone projects.

CTCAC does allow sites within 1-mile of each other to be combined into a single project under their “scattered sites” provisions. Based on the scattered sites provisions, the 28th Street site can be eligible for CTCAC funding if developed with affordable housing as part of a larger project in combination with the State Fairgrounds. Because the City-owned site on 10th Street (Civic Center) is more than 1-mile from the Fairgrounds site, it could not be considered as a scattered site with the Fairgrounds and/or 28th Street and would not be eligible for CTCAC funding.

Summary of Site-Specific Studies:

Five site-specific studies were prepared to help compare the difference between development capacity on the Fairgrounds using a 1.0-acre site versus a 1.5-acre site and the relative development capacity of the smaller City-owned sites. The studies also explored the difference in capacity when accommodating affordable housing for family housing versus Senior Housing.

The five site-specific scenarios studied are listed below:

1. Fairgrounds
A. Fairgrounds 1.0 ac – Family Housing
B. Fairgrounds 1.5 ac – Family Housing
C. Fairgrounds 1.5 ac – Senior Housing

2. 28th Street – Family Housing

3. Civic Center – Family Housing
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For each site-specific concept prepared, the development standards (i.e. square footage, height, setbacks, and parking), unit count, unit mix, and area tabulations are identified. Additionally, plan diagrams are provided to test fit the programmatic elements with each site. Based on the conceptual building diagrams, a generalized height and massing is established. It is important to note that the site-specific study does not represent a specific project design. Instead, it is a conceptual massing study to determine an overall scale of a potential affordable housing project.

Additional and separate economic analysis and financing strategies were prepared by Keyser Marston Associates (KMA) utilizing the architectural concepts and prototypes identified in these site-specific studies.
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Zoning Assessment Approach:

The sites studied for prospective affordable housing are not subject to the typical zoning requirements that are otherwise applicable to new residential development in citywide residential zones. Therefore, the zoning assessment considered the development standards applicable to adjacent parcels as well as the flexibility provided for by State law to accommodate production of affordable housing (i.e. State Density Bonus law). In using this approach, the zoning assessment considered the respective development size (i.e. height, floor area ratio, and lot coverage), the relationship to existing development on adjacent properties, and parking needs. The zoning assessment also factored in design requirements applicable to the coastal zone as needed for consistency with the Coastal Act (i.e. protection of public scenic views and protection from potential hazards such as projected flooding and sea level rise) and applicable Federal and State floodplainrelated design requirements.

Parking is one development standard type where the local standards significantly deviate from the State standard that is commonly accepted and applied to affordable housing development projects.

The City of Del Mar’s standard parking requirements (Del Mar Municipal Code Chapter 30.80) are not specific to affordable housing and do not factor in the lower parking demand specific to this population. By comparison, the State mandated parking ratios for affordable housing are based on affordable housing parking studies that account for the associated lower parking demand for lower income housing units, which is lower than what would otherwise be required per the City’s standard multi-family parking ratio requirements. Because of this, and because parking is a significant cost driver for affordable housing projects, the State’s requirements were utilized for the site-specific studies. A comparative chart of State affordable and Del Mar parking ratios is provided below:

TYPE
1-BR
2-BR
3-BR
GUEST N/A 1/4
1 1.5

1.5 RATIO
1 2
2 STATE AFFORDABLE DEL MAR
RATIO
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II. GENERAL FAIRGROUNDS ZONING ASSESSMENT
Housing development has been contemplated for the Fairgrounds in multiple land use plans. The 2008 Fairgrounds Master Plan anticipates new housing and in 2013 both the City of Del Mar and the 22nd DAA adopted resolutions to collaborate to carry out shared housing goals at the Fairgrounds property. The City’s 6th Cycle Housing Element (2021) identified the State Fairgrounds as an opportunity location for housing consistent with state, regional, and local housing goals to accommodate regional housing needs in smart growth locations. The parcel (APN 298-271-03) located at the southwest corner of Via de la Valle and Jimmy Durante Blvd was identified in the City’s Housing Element sites inventory and was the focus for consideration of potential housing projects as part of three scenarios that were studied for the Fairgrounds. This location has several benefits that make it an opportunistic site for affordable housing:
• Its proximity to services within a one-mile radius including access to groceries, high quality schools, parks, medical services, transportation, retail services, as well as jobs centers that would support and further fair housing for low-income households. See Exhibit B, C, D, E • This area is recognized as a Smart Growth Special Use Center in the San Diego Forward regional plan. It is within a half mile of stops for the 308 and 101-bus line. There is also a planned seasonal COASTER station that is anticipated to begin service to the Fairgrounds by 2035.
• The site is large enough to meet a substantial amount of Del Mar’s RHNA required units, which the City’s adopted 6th Cycle Housing Element identifies as a target for 54 lower income units.
• Either a 1-acre or a 1.5-acre site could be accommodated without infringing on current Fairgrounds activities or facilities.
• A higher density, multi-family project would be compatible with adjacent commercially zoned properties and both adjacent streets can accommodate any added traffic. • Existing base zoning (FR) provides flexibility for proposed housing development and does not specify any controlling development regulations such as minimum setbacks or parking, or maximum height, developable square footage, or floor area ratios (F.A.R.).

Fairgrounds - Zoning:

FR is the existing base zone for this location at the Fairgrounds; however, as a State-owned property, development at this location is not subject to local zoning requirements. The Fairgrounds is also located within the Floodplain Overlay Zone and Coastal Zone as further described below. 50 June 13, 2022 Item 01
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The primary challenge related to the overall Fairgrounds property is that it is located within the Floodplain Overlay Zone and subject to special design criteria to minimize flood risk. A significant portion of the site is mapped by the Federal Emergency Management Agency (FEMA) as a special flood hazard area that is subject to river flooding (Federal Insurance Rate Map Zone AE); however, through adaptive development design the projected flood risk can be significantly reduced.

Development in this location will require that the first-floor level be elevated above the Base Flood Elevation (BFE) for each of the three scenarios studied (Scenarios 1A, 1B, and 1C). Based on topographic information supplied by SANGIS, the first floor will need to be set at 8-10 feet above existing grade.

The site is also located in the Coastal Zone within the jurisdiction of the California Coastal Commission (CCC) and would be subject to compliance with the California Coastal Act protections for coastal resources and public scenic views, public access, and public health and safety protections from hazards. Based on recent certification actions by CCC in May 2022, it can be expected that the siting and future project design will need to account for projected sea level rise using best available science and provide disclosure of potential flooding to the public and prospective tenants.

Fairgrounds - Housing Types
Family housing was considered for the Fairgrounds site on both a 1-acre parcel (Scenario 1A) and a 1.5-acre parcel (Scenario 1B). Senior housing was considered on a 1.5-acre parcel on the Fairgrounds site (Scenario 1C). Common considerations and design features addressed in all sitespecific studies on the Fairgrounds property include the following:
• A podium design was utilized to elevate the residential units above the Base Flood Elevation. A podium design is typically composed of a ground level constructed of concrete and 1-4 levels of wood frame above. In this case, the ground floor would be used for parking and necessary access and utilities and the residential units would be on the upper levels.

Floodproofing ground floor spaces will increase project costs. However, this is a relatively common design feature of existing development that has not been an impediment to proposed housing. Also, the associated flood risk can be further reduced if adaptation measures identified in the City of De Mar Sea Level Rise Adaptation Plan (i.e. development of a living levee (vegetated berm along the San Dieguito River)) are implemented. • The relatively high cost of concrete construction (for the podium) would escalate the overall cost of construction. A developer would typically offset this cost by increasing the number 51 June 13, 2022 Item 01
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of floors, and therefore the number of units, above the podium. The site-specific studies limit the number of floors above the podium to two for an overall building height of three stories. This was done to minimize the overall height of the building • Each site-specific study on the Fairgrounds site results in a building that would be 3-stories, and 36 feet high. This is compatible with existing facilities on the Fairgrounds site which in many cases are much taller. A three-story building was also thought to be compatible with the surrounding, off-site development because the adjacent streets are significantly higher than the pad elevation of the site. When viewed from off-site, a three-story project design would appear as only a two-story structure, consistent with Del Mar’s 2-story, 26-foot height limit.
• In each site-specific study on the Fairgrounds property, private outdoor space and common outdoor space is incorporated above the podium. Private outdoor space is included with each unit. Other outdoor spaces can be located on the ground floor, but these spaces will be vertically separated from the residential units.
• All studies for the Fairgrounds anticipate a new access road from Jimmy Durante Blvd extending west along the southern boundary of the site. This road would provide access to the housing project and maintain current access to the Fairgrounds’ existing facilities. It would also provide fire department access to the project. A controlled access point for the Fairgrounds and a turn-around would be required west of the housing project. The cost of this access road will need to be factored into the overall project cost for the housing project. • Incentives: In accordance with State Density Bonus law, Affordable Housing projects may be granted incentives and waivers which allow a project to deviate from, or eliminate, specific development standards that make the project infeasible financially or physically.

Because the existing zoning designation for the Fairgrounds (FR) does not specify development regulations for housing projects (i.e. setbacks, F.A.R., coverage) there is not a significant need for incentives or waivers.

The following sections include the three site-specific scenarios that were studied for the Fairgrounds site.
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III. FAIRGROUNDS 1.0 – FAMILY HOUSING
Site-Specific Study 1A
Project Scope:

This site-specific study considers Family Housing to achieve a total unit count of 54 units.

Common areas such as community rooms, office, computer room and laundry would be located on the ground floor and would need to be designed in compliance with the required floodproofing construction design measures. The remainder of the ground floor would be used for parking as further described below.

Development Standards:

The general zoning assessment for the Fairgrounds site is provided in Section II of this report.

Following are the development standard details for this site-specific affordable housing project scenario:

Lot Size 1.0 acre
Unit Count 54
Average size of units 727 SF
Total Square footage 74,619 SF
Floor Area Ratio 171% a
Lot Coverage 67% a
Height 36 FT b
a. This calculation based on a site area of 1.0 AC instead of the 10.0 AC parcel size. b. Additional height may be incorporated in this project to accommodate project features such as additional units or elevating accessory uses above the ground plane.

Parking Analysis:

This scenario would accommodate 69 parking spaces on-site, which exceeds the State’s minimum affordable parking requirement of 68 spaces for the project by one space. The Del Mar Municipal 53 June 13, 2022 Item 01
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Code parking would require 96 spaces, and if incorporated into the project design would result in additional cost and an extra 28-spaces beyond what the State requires.

A comparative parking rates table is provided below:

TYPE # OF UNITS RATIO # OF CARS RATIO # OF CARS
1-BR 26 DU 1 26 1 26
2-BR 14 DU 1.5 21 2 28
3-BR 14 DU 1.5 21 2 28
SUB-TOTAL 54 DU 68 82
GUEST 0 0 0 0.25 14
TOTAL CARS 69 TOTAL CARS 68 TOTAL CARS 96

PROPOSED DEL MAR
SCENARIO 1A PARKING

STATE AFFORDABLE
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IV. FAIRGROUNDS 1.5 – FAMILY HOUSING
Site-Specific Study 1B
Project Scope:

In consideration of accommodating the potential for additional lower income units, this site-specific study scenario expands the site from 1 acre to 1.5 acres to achieve a total unit count of 80 units.

Common areas such as community rooms, office, computer room and laundry would be located on the ground floor and would need to be designed in compliance with the required floodproofing construction design measures. The remainder of the ground floor would be used for parking as further described below.

Development Standards:

The general zoning assessment for the Fairgrounds site is provided in Section II of this report.

Following are the development standard details for this site-specific affordable housing project scenario:

Lot Size 1.5 acre
Unit Count 80
Average size of units 745 SF
Total Square footage 113,652 SF
Floor Area Ratio 174% a
Lot Coverage 66% a
Height 36 FT b
a. This calculation based on a site area of 1.5 AC instead of the 10 AC parcel size. b. Additional height may be incorporated in this project to accommodate project features such as additional units or elevating accessory uses above the ground plane.

Parking Analysis:

This scenario would accommodate 124 parking spaces on-site, which exceeds the State’s minimum affordable parking requirement of 103 spaces for the project by 21 spaces. Exceeding 55 June 13, 2022 Item 01
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June 7, 2022 Page 14 of 23
the State’s minimum affordable parking requirement is viable in this scenario because the underpodium area available for parking exceeds the area required for parking. Therefore, additional parking can be added with no further cost of podium construction. Note that the minimum podium size is dictated by the building program (units) on the upper floors.

The Del Mar Municipal Code parking would require 146 spaces, and if incorporated into the project design would result in additional cost and an extra 43 spaces beyond what the State requires.

A comparative parking rates table is provided below:

TYPE # OF UNITS RATIO # OF CARS RATIO # OF CARS
1-BR 34 DU 1 34 1 34
2-BR 22 DU 1.5 33 2 44
3-BR 24 DU 1.5 36 2 48
SUB-TOTAL 80 DU 103 126
GUEST 0 0 0 0.25 20

PROPOSED STATE AFFORDABLE DEL MAR
TOTAL CARS 124 TOTAL CARS 103 TOTAL CARS 146
SCENARIO 1B PARKING
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V. FAIRGROUNDS 1.5 – SENIOR HOUSING
Site-Specific Study 1C
Project Scope:

A 1.5-acre site was also considered for a potential Senior Housing project. To meet the applicable CTCAC criteria, this scenario could achieve a total of 78 units. Unlike the other studies, all common areas such as community rooms, office, computer room and laundry would be located on the second floor, above the Base Flood Elevation. This scenario would result in a small drop in the unit count when compared to the Fairgrounds 1.5 - Family Housing study.

In this site-specific study, the ground floor use would be limited to parking, required access, and utilities. The site-specific study considered use of expanded common outdoor space on the upper floors and an opening for the courtyard spaces to the north to diminish the overall scale and mass of the building when seen from Via de la Valle. If incorporated, this would have contributed to a further reduction in total unit count when compared to the Family project, as noted above.

Development Standards:

The general zoning assessment for the Fairgrounds site is provided in Section II of this report.

Following are the development standard details for this site-specific affordable housing project scenario:

Lot Size 1.5 acre
Unit Count 78
Average size of units 534 SF
Total Square footage 81,097 SF
Floor Area Ratio 124% a
Lot Coverage 56% a
Height 36 FT b
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a. This calculation based on a site area of 1.5 AC instead of the 10 AC parcel size. b. Additional height may be incorporated in this project to accommodate project features such as additional units or elevating accessory uses above the ground plane.

Parking Analysis:

This site-specific study would accommodate 78 parking spaces on-site, consistent with the State’s minimum parking requirement for affordable housing. The Del Mar Municipal Code parking requirements would require 96 spaces, and if incorporated into the project design would result in additional cost and an extra 18 spaces beyond what the State requires.

A comparative parking rates table is provided below:

TYPE # OF UNITS RATIO # OF CARS RATIO # OF CARS
1-BR 78 DU 1 78 1 78
2-BR DU 1.5 0 2 0
3-BR DU 1.5 0 2 0
SUB-TOTAL 78 DU 78 78
GUEST 0 0 0 0.25 20
SCENARIO 1C PARKING

PROPOSED STATE AFFORDABLE DEL MAR
TOTAL CARS 78 TOTAL CARS 78 TOTAL CARS 98
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VI. 28TH STREET – FAMILY HOUSING
Site-Specific Study 2
Context:

At .06 acres, the 28th Street site is the smallest of the sites studied. It is a vacant lot that is located on the north side of 28th Street at the street end in the North Beach neighborhood. To the east is the San Diego Lagoon/River valley and to the north and west is the existing Beach Colony Apartment development, which is three stories tall. Across the street to the south are 1- and 2- story, single family homes. The site is within a quarter of a mile of a stop for the 101-bus line.

Zoning:

This site is designated for Public Facilities (PF) in the Community Plan. The City Council-adopted base zone for this site is also PF; however, the corresponding zoning action to reflect PF zoning (adopted in 1997) on this parcel was not accurately reflected in the City’s Local Coastal Program (LCP) zoning maps (certified in 2001). A clean-up action is being processed by the City to address this error to reflect the intended PF zoning. The PF zone applies to City-owned property and does not specify development standards for residential development.

The site is also located within the Floodplain Overlay Zone. The site is mapped by the Federal Emergency Management Agency (FEMA) as a special flood hazard area that is subject to river flooding (Federal Insurance Rate Map Zone AE); however, through adaptive development design the projected flood risk can be significantly reduced. Development in this location will require that the first-floor level be elevated above the Base Flood Elevation (BFE), which would be approximately 6 feet above the existing grade elevation on this site.

Project Scope:

The site-specific study anticipates a 3-story, 3-unit building composed of two 1-bedroom and one 2-bedroom units. Like the Fairgrounds sites, proposed development in the Floodplain Overlay Zone necessitates elevating the units above the BFE, which would be approximately 6 feet above the existing grade elevation on this site. Parking would be located on the ground floor with the housing units elevated and located on the second and third story levels above. The maximum 59 June 13, 2022 Item 01
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structure height would be approximately 30 feet, which is consistent with the height of the adjacent apartment building.

Development Standards:

The site is surrounded by properties that are zoned RM-East (Medium Density). If compared to the adjacent zone, this site-specific study would differ from the RM-East development regulations in terms of height, F.A.R., front setback and rear setback. Following are the development standard details for this site-specific affordable housing project scenario:

Lot Size: 0.06 acre
Unit Count: 3
Average size of units: 612 SF
Total Square footage: 1,989 SF
Floor Area Ratio: 76%
Lot Coverage: 35%
Height: 30 FT a
a. Additional height may be incorporated in this project to accommodate additional project features such as additional units or elevating accessory uses above the ground plane.

Parking Analysis:

This scenario would accommodate 4 parking spaces on-site, which is consistent with the State’s minimum parking requirement for affordable housing. By comparison the Del Mar Municipal Code parking requirements would require 5 spaces. If the local parking requirement were incorporated into the project design, it would result in additional cost and one extra space beyond what the State requires for affordable housing projects.
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A comparative parking rates table is provided below:

Relationship to Tax Credit Program Funding Source:

Public funding sources for a site this small would likely be difficult to find and a small project of this size is not likely to attract traditional affordable housing developers. This site has potential to be developed as a part of a larger Fairgrounds project utilizing the California Tax Credit Allocation Committee’s (CTCAC) scattered sites program. As a scattered sites project, only family housing was deemed a feasible scenario option due to the constraints of this small site. Therefore, the sitespecific study assumes a conceptual design for a Family housing project that would make it eligible for incorporation as part of a CTCAC scattered sites project.

TYPE # OF UNITS RATIO # OF CARS RATIO # OF CARS
1-BR 2 DU 1 2 1 2
2-BR 1 DU 1.5 1.5 2 2
3-BR DU 1.5 0 2 0
SUB-TOTAL 3 DU 3.5 4
GUEST 0 0 0 0.25 1
SCENARIO 2 PARKING

PROPOSED STATE AFFORDABLE DEL MAR
TOTAL CARS 4 TOTAL CARS 4 TOTAL CARS 5
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VII. CIVIC CENTER – FAMILY HOUSING
Site-Specific Study 3
Context:

Located on 10th Street is a 0.1-acre parcel in the southwest corner of the City’s Civic Center. To the east and north are Civic Center facilities and parking, and to the west is a 2-story, single-family home. Across the street to the south are 1- and 2-story, single-family homes.

The Civic Center is located within the Del Mar Downtown Village, a smart growth community center that spans Camino Del Mar from 9th to 15th street. Housing located here is consistent with the City’s adopted Housing Element strategy to further fair housing as this location has convenient access to transit and proximity to goods and services. It is within a quarter of a mile of a stop for the 101-bus line. The area will also be served by planned rapid service bus routes 473 and 103 to be completed by 2035 and 2050 respectively.

Zoning:

The site is located within the Public Facilities (PF) zone and as such does not have applicable residential zoning standards. Adjacent properties to the west and south (across 10th Street) are in the R2 zone.

Project Scope:

Though CTCAC funding would not be available to this site due to limited parcel size, unit sizes consistent with CTCAC requirements for Family Housing were used in the site-specific study.

The site-specific study anticipates a 2-story building composed of four 2-bedroom units. The units would be clustered with a single entry point to mimic the predominant design and existing development pattern of adjacent single-family homes. A greater 15-foot setback from the western property line was incorporated into the conceptual design to buffer the building away from the existing single-family home to the west. In comparison to the 5-foot side yard setback required on the adjacent property, this design accommodates an additional 10 feet of setback separation distance beyond the typical 5-foot minimum side yard setback. An existing privacy wall located to the west would also provide a privacy buffer from the adjacent property and is recommended to be 62 June 13, 2022 Item 01
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June 7, 2022 Page 21 of 23
retained. The maximum structure height would be approximately 26 feet, which is consistent with adjacent structures.

Development Standards:

Following are the development standard details for this site-specific affordable housing project scenario:

Lot Size 0.10 acre
Unit Count 4
Average size of units 718 SF
Total Square footage 3,109 SF
Floor Area Ratio 69%
Lot Coverage 35%
Height 26 FT
If compared to the adjacent zone (R2 zone), this site-specific study would differ from the R2 zone development regulations in terms of floor area ratio (FAR), front setback, and rear setback.

Parking Analysis:

Six spaces would be required to meet the State’s parking requirement for affordable housing. By comparison, Del Mar’s parking requirements for the R2 zone would require 9 spaces. Required parking would be provided in the adjacent Civic Center parking lot, utilizing existing surplus offstreet parking spaces. This proposed shared use of the City’s parking facility allows for the overall size of the conceptual housing development footprint to be significantly reduced in comparison to a design that incorporates six to nine off-street parking spaces in addition to four housing units onsite. 63 June 13, 2022 Item 01
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June 7, 2022 Page 22 of 23
A comparative parking rates table is provided below:
a. Parking to be provided in adjacent Civic Center parking lot.

TYPE # OF UNITS RATIO # OF CARS RATIO # OF CARS
1-BR DU 1 0 1 0
2-BR 4 DU 1.5 6 2 8
3-BR DU 1.5 0 2 0
SUB-TOTAL 4 DU 6 8
GUEST 0 0 0 0.25 1
TOTAL CARS 6 9
a TOTAL CARS 6 TOTAL CARS
SCENARIO 3 PARKING

PROPOSED STATE AFFORDABLE DEL MAR
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VIII. EXHIBITS
The following exhibits were included in addition to the site-specific studies to demonstrate the sites studied are opportunity site locations for lower income housing. • Exhibit A – Vicinity Map
This exhibit shows the distance between the three site specific studies in relation to each other and their relative locations with the City of Del Mar. It additionally maps out amenities available within the city.
• Exhibit B – Transportation
This exhibit shows the Fairgrounds site’s proximity within a one-mile radius to transportation services. The site is within a half mile of stops for the 308 and 101-bus line and a planned seasonal COASTER station is anticipated to begin service to the Fairgrounds by 2035. • Exhibit C – Jobs / Shopping
This exhibit shows the Fairgrounds site’s proximity within a one-mile radius to jobs and shopping, including supermarkets.
• Exhibit D – Schools
This exhibit shows the Fairgrounds site’s proximity within a one-mile radius to local schools from preschool through high school.
• Exhibit E – Health and Governmental Services
This exhibit shows the Fairgrounds site’s proximity within a one-mile radius to government offices, medical clinics, and dental & optometry services. 65 June 13, 2022 Item 01































































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70 June 13, 2022 Item 01

STEPHEN DALTON ARCHITECTS
DATE
6/07/22 www.SDArchitects.net
STUDY 1A 1

DEL MAR HOUSING
FAIRGROUNDS 1.0 AC - FAMILY HOUSING

SITE PLAN
FRONT
OFFICE
6 69 CARS TOTAL
10'-0"
10'-0"
25'-0"
15 7
13 9
6 COMM.

ROOM
LAUN
-DRY
RR
COMP
ROOM
TRASH
8 3
25'-0"
LOBBY
ELECT. BOI
LER
2 BIKE
0 40 80

JIMMY DURANTE BLVD

VIA DE LA VALLE
1 3
10'-0"
36'-0"
Attachment C
71 June 13, 2022 Item 01

STEPHEN DALTON ARCHITECTS
DATE
6/07/22 www.SDArchitects.net
STUDY 1A 2

DEL MAR HOUSING
FAIRGROUNDS 1.0 AC - FAMILY HOUSING
TYPICAL UPPER FLOOR: LEVEL 2-3
C1
A1
B2
A1
C2
C1
C1 C1 A1
A2 A1 A1 A1 A1
A2
A1
B2
A1
A2
A2
C1
B1
B1
B2
B1
B2
C2
24'-0"
44'-0"
47'-4"
28'-0"
22'-0"
39'-0"
34'-0"
0 40 80
1 3

TOT LOT TOT LOT

COURTYARD
72 June 13, 2022 Item 01
5'-0"
9'-0"
10'-0"
12'-0"
36'-0"

STEPHEN DALTON ARCHITECTS
DATE
6/07/22 www.SDArchitects.net
STUDY 1A 3

DEL MAR HOUSING
FAIRGROUNDS 1.0 AC - FAMILY HOUSING
0 40 80
VIEW FROM SOUTHEAST SECTION 1
p1
1 2 VIA DE LA
VALLE
A1
C1 A1
A1
A1
B1
B1
C1

COURTYARD
73 June 13, 2022 Item 01

PARKING

DEVELOPMENT REGULATIONS

STEPHEN DALTON ARCHITECTS
DATE
6/07/22 www.SDArchitects.net
STUDY 1A 4

DEL MAR HOUSING
FAIRGROUNDS 1.0 AC - FAMILY HOUSING

UNIT TABULATION
74 June 13, 2022 Item 01

STEPHEN DALTON ARCHITECTS
DATE
6/07/22 www.SDArchitects.net
STUDY 1A 5

DEL MAR HOUSING
FAIRGROUNDS 1.0 AC - FAMILY HOUSING

AREA CALCULATION
75 June 13, 2022 Item 01

STEPHEN DALTON ARCHITECTS
DATE
6/07/22 www.SDArchitects.net
STUDY 1A 6

DEL MAR HOUSING
FAIRGROUNDS 1.0 AC - FAMILY HOUSING

EXISTING CONDITIONS

JIMMY DURANTE BLVD

VIA DE LA VALLE
SOURCE: SANGIS
76 June 13, 2022 Item 01
26'-0"
BOIL
-ER
ELEC.

ROOM
TRASH
BIKE

STORAGE

STORAGE

STEPHEN DALTON ARCHITECTS
www.SDArchitects.net 1

DEL MAR HOUSING
FAIRGROUNDS 1.5 AC - FAMILY HOUSING
DATE
STUDY 1B 6/07/22

SITE PLAN
124 CARS TOTAL
10'-0"
10'-0"
25'-0"
25'-0"
16 21
17 OFF.
(150 SF)

COMMUNITY
ROOM
(924 SF)
LAUND
RR
COMP
ROOM
(330 SF)
2 LOBBY
18 18
13 7 10'-0"
10'-0"
10'-0"
1 11
E
E
80'-0"
0 40 80

JIMMY DURANTE BLVD

VIA DE LA VALLE
1 3
Attachment D
77 June 13, 2022 Item 01
22'-0"
42'-0"
22'-0"
44'-0" 32'-0"

STEPHEN DALTON ARCHITECTS
www.SDArchitects.net 2

DEL MAR HOUSING
FAIRGROUNDS 1.5 AC - FAMILY HOUSING
DATE
STUDY 1B 6/07/22
TYPICAL UPPER FLOOR: LEVEL 2-3
A2
B1
C1
A2
A1 A1
B2 C1
C1
C1
C1 C1 C1
A2
B2
C1
A1 A1
B1 A1
B1 B1
B1
A2 A2
A2 A2
A2 A2
A2 B1
C1 C1
B1
B1

COURTYARD
A1
A1

COURTYARD

TOT LOT
(600 SF)
22'-0"
32'-0"
0 40 80
B2
C1
24'-0"
C1
1 3
78 June 13, 2022 Item 01
5'-0"
9'-0"
10'-0"
12'-0"
36'-0"

STEPHEN DALTON ARCHITECTS
www.SDArchitects.net 3

DEL MAR HOUSING
FAIRGROUNDS 1.5 AC - FAMILY HOUSING
DATE
STUDY 1B 6/07/22
0 40 80
VIEW FROM SOUTHEAST SECTION 1
p1
1 2 A1 VIA DE LA
A1 VALLE
A1
A1
A1
A1
A1
A1
C1
C1
79 June 13, 2022 Item 01

PARKING

DEVELOPMENT REGULATIONS

STEPHEN DALTON ARCHITECTS
www.SDArchitects.net 4

DEL MAR HOUSING
FAIRGROUNDS 1.5 AC - FAMILY HOUSING
DATE
STUDY 1B 6/07/22

UNIT TABULATION
80 June 13, 2022 Item 01

STEPHEN DALTON ARCHITECTS
www.SDArchitects.net 5

DEL MAR HOUSING
FAIRGROUNDS 1.5 AC - FAMILY HOUSING
DATE
STUDY 1B 6/07/22

AREA CALCULATION
81 June 13, 2022 Item 01

STEPHEN DALTON ARCHITECTS
www.SDArchitects.net 6

DEL MAR HOUSING
FAIRGROUNDS 1.5 AC - FAMILY HOUSING
DATE
STUDY 1B 6/07/22

EXISTING CONDITIONS

JIMMY DURANTE BLVD

VIA DE LA VALLE
SOURCE: SANGIS
82 June 13, 2022 Item 01
26'-0"
BOIL
-ER
ELEC.

ROOMTRASH
BIKE

STEPHEN DALTON ARCHITECTS DEL MAR HOUSING
FAIRGROUNDS 1.5 AC - SENIOR HOUSING
www.SDArchitects.net 1
DATE
STUDY 1C 6/07/22

SITE PLAN
78 CARS TOTAL
10'-0"
10'-0"
25'-0"
25'-0"
4 0 40 80
7 12
4 16
10 12
12 LOBBY
10'-0"
10'-0"
10'-0"
E
E
80'-0"
1 1
3 VIA DE LA VALLE

JIMMY DURANTE BLVD
Attachment E
83 June 13, 2022 Item 01
34'-6" 23'-0" 22'-0"

STEPHEN DALTON ARCHITECTS DEL MAR HOUSING
FAIRGROUNDS 1.5 AC - SENIOR HOUSING
www.SDArchitects.net 2
DATE
STUDY 1C 6/07/22
TYPICAL UPPER FLOOR: LEVEL 2-3
A1
A2
OFF.
(150 SF)

COMMUNITY
ROOM
(924 SF)
LAUND
RR
COMP
ROOM
(330 SF)
A1
A1
A1
A1
A1
A1
A1
A1
A1
A1
A2
A2
A2
A2 A1 A1 A1
A1
A2
A1
A1
A1
A1
A1
A2
E
E
A2 A2
A2
A1
A1 A1
A1
A1
A1
A1
A1

COURTYARD COURTYARD
0 40 80
1 3
84 June 13, 2022 Item 01
5'-0"
9'-0"
10'-0"
12'-0"
36'-0"

STEPHEN DALTON ARCHITECTS DEL MAR HOUSING
FAIRGROUNDS 1.5 AC - SENIOR HOUSING
www.SDArchitects.net 3
DATE
STUDY 1C 6/07/22

VIEW FROM SOUTHEAST
0 40 80
SECTION 1
A1
p1
1 2
A1
A1
A1
A1
A1
A1
A1
A2
A2
A2
A2

VIA DE LA
VALLE
85 June 13, 2022 Item 01

DEVELOPMENT REGULATIONS

PARKING

STEPHEN DALTON ARCHITECTS DEL MAR HOUSING
FAIRGROUNDS 1.5 AC - SENIOR HOUSING
www.SDArchitects.net 4
DATE
STUDY 1C 6/07/22

UNIT TABULATION

AREA CALCULATION
86 June 13, 2022 Item 01

STEPHEN DALTON ARCHITECTS DEL MAR HOUSING
FAIRGROUNDS 1.5 AC - SENIOR HOUSING
www.SDArchitects.net 5
DATE
STUDY 1C 6/07/22

EXISTING CONDITIONS

JIMMY DURANTE BLVD

VIA DE LA VALLE
SOURCE: SANGIS
87 June 13, 2022 Item 01
10'-0"
10'-0"
5'-0"

STEPHEN DALTON ARCHITECTS
www.SDArchitects.net 1

DEL MAR HOUSING
28TH STREET - FAMILY HOUSING
DATE
STUDY 2 6/07/22

SITE PLAN
4 10'-0"
TRASH
0 20 40
28TH STREET
1 4

STORAGE
Attachment F
88 June 13, 2022 Item 01

STEPHEN DALTON ARCHITECTS
www.SDArchitects.net 2

DEL MAR HOUSING
28TH STREET - FAMILY HOUSING
DATE
STUDY 2 6/07/22
FLOOR PLAN: LEVEL 2
A1
A2
0 20 40
1 4
89 June 13, 2022 Item 01

STEPHEN DALTON ARCHITECTS
www.SDArchitects.net 3

DEL MAR HOUSING
28TH STREET - FAMILY HOUSING
DATE
STUDY 2 6/07/22
BUILDING PLAN: LEVEL 3
B1
0 20 40
1 4
90 June 13, 2022 Item 01

STEPHEN DALTON ARCHITECTS
www.SDArchitects.net 4

DEL MAR HOUSING
28TH STREET - FAMILY HOUSING
DATE
STUDY 2 6/07/22
0 20 40
VIEW FROM SOUTHEAST SECTION 1
1 2
B1
10'-0" 10'-0"
1'-0"
30'-0"
28TH
STREET
3 9'-0"
A2 A1
91 June 13, 2022 Item 01

DEVELOPMENT REGULATIONS

PARKING

STEPHEN DALTON ARCHITECTS
www.SDArchitects.net 5

DEL MAR HOUSING
28TH STREET - FAMILY HOUSING
DATE
STUDY 2 6/07/22

UNIT TABULATION

AREA CALCULATION
92 June 13, 2022 Item 01
10'-0"
10'-0"
10'-0"
5'-0"

STEPHEN DALTON ARCHITECTS
www.SDArchitects.net 1

DEL MAR HOUSING

CIVIC CENTER - FAMILY HOUSING
DATE
STUDY 3 6/07/22
TYPICAL FLOOR: LEVEL 1-2
B1
LOBBY
10TH STREET
0 20 40
B1
5'-0"
1 2

EXISTING WALL
Attachment G
93 June 13, 2022 Item 01

STEPHEN DALTON ARCHITECTS
www.SDArchitects.net 2

DEL MAR HOUSING

CIVIC CENTER - FAMILY HOUSING
DATE
STUDY 3 6/07/22
0 20 40
VIEW FROM SOUTHEAST SECTION 1
1 2 B1
B1
10TH
STREET
9'-0" 9'-0"
24'-2 1/4"
94 June 13, 2022 Item 01

DEVELOPMENT REGULATIONS

PARKING

STEPHEN DALTON ARCHITECTS
www.SDArchitects.net 3

DEL MAR HOUSING

CIVIC CENTER - FAMILY HOUSING
DATE
STUDY 3 6/07/22

UNIT TABULATION

AREA CALCULATION
95 June 13, 2022 Item 01
City of Del Mar
Agenda Report
________________________________________________________________________________________________________ City Council Action:

TO: Honorable Mayor and City Council Members
FROM: Councilmembers Dave Druker and Terry Gaasterland, City Council Legislative Subcommittee
DATE: June 13, 2022
SUBJECT: Letter of Support for Senate Bill 1105 (Hueso): San Diego Regional Equitable and Environmentally Friendly Housing Act
REQUESTED ACTION/RECOMMENDATION:

Councilmembers Druker and Gaasterland recommend that the City Council authorize submittal of a letter of support for Senate Bill 1105 (Hueso): the San Diego Regional Equitable and Environmentally Friendly Housing Act (S.D. REEF Act) to be signed by the Mayor.

BACKGROUND/DISCUSSION:

California State Senator Ben Hueso has introduced Senate Bill (SB) 1105, the San Diego Regional Equitable and Environmentally Friendly Housing Act, also known as the S.D. REEF Act. According to a fact sheet provided by Senator Hueso’s office (Attachment A), SB 1105 would establish the San Diego Region Equitable and Environmentally Friendly Housing Agency (Agency) to coordinate and execute a regional plan to increase affordable housing options throughout San Diego County. SB 1105 would give the Agency the authority to generate funds as necessary to carry out options that mitigation the housing crisis in San Diego County. Senator Hueso’s office contends that a regional approach to San Diego’s housing crisis is needed, and that existing local efforts would benefit from a multi-stakeholder, countywide agency that could help coordinate and distribute additional resources to manage the high cost of housing.

As currently amended, SB 1105 states that the Agency’s purpose is to increase the supply of equitable and environmentally friendly housing in the County of San Diego by providing for significantly enhanced funding and technical assistance across the regional level for equitable and environmentally friendly housing projects and programs, equitable housing preservation, and rental protection programs. The bill would require a board composed of six (6) voting members who are primary or alternate members of the San Diego Association of Governments (SANDAG), to govern the Agency. A copy of the current bill can be found at:
https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220SB1105.

SB 1105 would authorize the Agency to, among other things, incur and issue indebtedness, place various measures on the ballot in the County of San Diego and its incorporated cities 1 June 13, 2022 Item 02
City Council Agenda Report
SB 1105 Letter of Support
June 13, 2022

to raise and allocate funds, in accordance with applicable constitutional requirements, and to issue general obligation bonds secured by the levy of ad valorem property taxes, for purposes of producing and preserving equitable and environmentally friendly housing and supporting rental protection activities. SB 1105 would authorize the Agency to place on the ballot for voter approval a parcel tax, gross receipts business license tax, special business tax, documentary transfer tax, and a commercial linkage fee, as defined in the bill’s text. The bill would require that revenue generated by the Agency pursuant to voter approval be used for specified housing purposes and require the Agency to distribute those funds in accordance with specified requirements and subject to a specified priority. Finally, the bill would require the board to provide for regular financial audits of the Agency’s accounts and records and to provide for financial reports.

Staff reviewed the City’s adopted Legislative Policy Guidelines and noted that the bill is consistent with several of the guidelines, including those that support legislation that: 1) would stabilize local government financing; 2) increase revenues or improve local government’s ability to generate revenue; and 3) allow local governments flexibility in how they meet their state-mandated housing goals.

San Diego County Supervisor Terra Lawson-Remer supports SB 1105. On May 16, 2022, the City Council received a presentation from Jeffrey Yuen, Senior Advisor to Supervisor Lawson-Remer, requesting that the City submit a letter of support for SB 1105. The consensus of the Council was to defer consideration of the letter to a future meeting and for the City Council Legislative Subcommittee to meet with Supervisor Lawson-Remer’s staff to receive additional information and further vet questions raised at the May 16, 2022, City Council meeting about SB 1105. Since that time, the Legislative Subcommittee has met with representatives from the Supervisors office to further discuss and understand the proposed legislation and are now recommending that the City Council move forward with a letter of support (Attachment B).

FISCAL IMPACT:

There is no fiscal action to be taken by the City Council related to this agenda item.

ENVIRONMENTAL IMPACT:

The proposed City Council action does not constitute a “project” under the definition set forth in California Environmental Quality Act (CEQA) Guidelines Section 15378 because it will not have a potential to result in a direct or indirect physical change in the environment and is, therefore, not subject to CEQA. No further action under CEQA is required.

ATTACHMENTS:

Attachment A – SB 1105 Fact Sheet
Attachment B – SB 1105 Letter of Support
2 June 13, 2022 Item 02
SB XXX (Hueso) – Revised on /XX/22
SB 1105: San Diego Regional
Equitable and Environmentally Friendly Housing Act (S.D. REEF Act) Summary
SB 1105 (Hueso) would establish the San Diego
Regional Equitable and Environmentally Friendly
Housing Agency in order to coordinate and execute a
regional plan to increase affordable housing options
throughout San Diego County. The bill would give the
agency authority to generate funds as necessary to carry out operations that mitigate the housing crisis in San
Diego County.

Background
California’s incredibly low housing production relative to its high demand has contributed to a clear and
pressing housing crisis. The state as a whole has
consistently failed to meet annual production goals to
tackle higher home and rent prices, and according to
the LAO, the state should have been producing about
90,000 more units annually over the past several
decades to keep up with demand. Unfortunately,
production has slowed even more in the last decade,
especially in expensive coastal areas like San Francisco, Los Angeles, and San Diego.

According to recent Regional Housing Needs
Allocation (RHNA) assessments, the San Diego region
is facing a housing shortage of 90,000 units, and
requires another 90,000 homes by 2030 just to keep up
with its population growth. This has increased prices,
forcing folks to move further away from cities, and
worsening traffic, congestion, pollution, and overall
quality of life. Although all San Diegans are feeling the costs of this housing shortage, these continuous issues disproportionately affect people of color as they bear
the burden of lower average wages and higher
homelessness rates. The links between the housing
crisis and the climate crisis are undeniable, and they call for regional efforts that tackle both simultaneously,
while emphasizing equitable distribution of resources
for low-income housing.

Why this bill is needed
Although the entirety of California is facing this
housing crisis, regional approaches to these issues may work best, as local governments can focus on what
factors are most pressing in each sector of California’s vast landscape. For San Diego County specifically, all
the existing local efforts would benefit greatly from a multi-stakeholder countywide agency that could help
coordinate and distribute additional resources that best manage the high cost of housing. Since the San Diego
Association of Governments (SANDAG) already
serves as the forum for regional decision making for
the San Diego region, it can also naturally serve as the authorizing entity for the purposes of this agency.

Giving this agency the ability to generate new funds for affordable housing developments, local staffing and
technical support, and assistance programs would help
the County tackle the issue on a larger scale more
efficiently.

By establishing the San Diego Regional Equitable and
Environmentally Friendly Housing Agency, San Diego
County can benefit from coordinating efforts across all areas to best utilize resources and tackle the housing
crisis more equitably. This will help guarantee that as every new housing project is completed, it has the
greatest positive impact in the region to lessen the
financial and environmental burdens of the most
vulnerable San Diegans.

Support:__________________________________
San Diego County Supervisor Terra Lawson-Remer
Staff Contact
Elmer Lizardi, Legislative Aide
[email protected] / (916) 651-4040
Attachment A 3 June 13, 2022 Item 02
1050 Camino Del Mar, Del Mar, CA 92014 | 858.755.9313 | www.delmar.ca.us June 13, 2022
Honorable Anna Caballero
Chair, Senate Governance & Finance Committee
State Capitol Office
1021 O Street, Suite 7620
Sacramento, CA 95814
Re: SB 1105 (Hueso) – SUPPORT
Dear Senator Caballero,
I am writing on behalf of the Del Mar City Council to express support for SB 1105: San Diego Regional Equitable and Environmentally Friendly Housing Finance Agency. This bill will strengthen the San Diego region by providing more affordable homes for working and middle-class families and ensure that all residents have a safe, stable, affordable place to call home. I applaud the leadership on this effort to date and urge your support on this important bill.

The City of Del Mar is pleased to join a diverse group of local stakeholders who recognize the urgent need to build more of the right kind of housing. I urge you to sign SB 1105 for the following reasons:

A Regional Approach for Our Regional Challenges
Through the Regional Housing Needs Assessment process (RHNA), the San Diego region was instructed to plan for nearly 100,000 homes by 2029 affordable to low-and moderate-income households. Despite the strong commitment from cities across the region, we are still only producing enough affordable homes to meet 12% of the need.

This housing shortfall is regional in nature and too great to be fully addressed individually by any one of our 18 incorporated cities. However, the current process is anything but regional: instead, each city is each responsible for finding budgetary funds to deliver on our daunting affordability goals. SB 1105 provides for a coordinated regional strategy and opportunities to leverage new funding to increase affordable housing.

Building the Right Housing in the Right Places
The housing crisis is fundamentally connected to the climate crisis. As housing prices increase, San Diegans are forced to move further away, leading to worsening traffic, more carbon pollution, and the acceleration of the climate emergency. SB 1105 will enable our region to build more equitable and inclusive housing near jobs, amenities, and transportation infrastructure in order to protecting our climate and prevent paving over our open spaces and natural ecosystems.
4 June 13, 2022 Item 02
Honorable Anna Caballero
June 13, 2022

Supporting a Strong Regional Economy
SB 1105 will strengthen our regional economy, kickstarting the production of thousands of new affordable homes and providing good jobs for working families. Further, we desperately need an abundance of low and middle-income housing, and first-time homeownership opportunities, to address the cost of living concerns facing our small businesses and regional economy.

Creating Good Jobs for Working Families
We are working together to update and improve the language in the bill regarding labor standards, and we are confident that the ultimate bill version that is brought forward will have strong labor standards, so that the investments made in building housing will also create good jobs for working and middle class San Diegans.

For these reasons, Del Mar City Council urges you to support SB 1105 and make housing security and affordability a reality for all San Diego residents. I appreciate your continued leadership on this issue and remain committed to working with state and local stakeholders to find solutions to our housing challenges.

Sincerely,
Dwight Worden
Mayor
CC:

The Honorable Ben Hueso, Member of the State Senate
The Honorable Jim Nielsen, Member of the State Senate
The Honorable Maria Elena Durazo, Member of the State Senate The Honorable Robert M. Hertzberg, Member of the State Senate The Honorable Scott D. Wiener, Member of the State Senate Terra Lawson-Remer, San Diego County Supervisor
Del Mar City Council
Ashley Jones, Del Mar City Manager
Clem Brown, Del Mar Environmental Sustainability/Special Projects Manager Jeffery Yuen, Senior Advisor to Supervisor Lawson-Remer 5 June 13, 2022 Item 02