On November 9, 2020, the San Diego City Council approved two primary components of the Complete Communities program, a package of development incentives designed to strengthen community development and improve housing affordability and quality of life.  Housing Solutions and Mobility Choices are complementary planning strategies designed to incentivize development near transit while connecting San Diegans to convenient and safe transit options.  KMA was engaged to evaluate the financial feasibility and fiscal impacts of implementing the two components.   

Housing Solutions

The intent of the Housing Solutions program is to stimulate new housing production, including smaller and affordable units, within existing transit-adjacent areas of the City.  The innovative program will enable developers in Transit Priority Areas (TPAs) to use significant Floor Area Ratio (FAR) bonuses in exchange for affordable housing, neighborhood amenities, and/or infrastructure contributions.  

To evaluate the program’s feasibility, KMA prepared financial analyses of residential development prototypes, ranging in density, unit mix, construction types, and market rents, across the City.  For each prototype, KMA tested a range of affordability levels and infrastructure requirements as well as development incentives to determine the optimal costs/benefits of the program.  The key purpose of the KMA financial feasibility evaluation was to ensure value enhancement for community benefits, including construction of more affordable housing units, rather than creating a windfall in increased land value to property owners.  KMA concluded that the program -- with its combination of affordability requirements and incentives -- is appropriately formulated to strike this balance.

Mobility Choices

Mobility Choices supports the goals and objectives of the City’s Climate Action Plan by encouraging housing in TPAs as a strategy to decrease greenhouse gas emissions.  It also complies with the requirements of SB 743, which requires cities to analyze a project’s transportation impacts using vehicle miles traveled (VMT) rather than level of service (LOS).

KMA prepared a technical analysis to test the impacts of the Mobility Choices regulations, which establishes a new Active Transportation In-Lieu Fee Program in the most car-dependent, suburban neighborhoods of the City.  Revenues will be used to fund infrastructure, along with pedestrian and bike improvements, in more dense urban areas with a strategic focus on neighborhoods lacking access to transit.  The KMA analysis identified development prototypes and formulated financial pro forma models to measure the potential cost savings, and estimated value to future developers, from adoption of the Mobility Choices program.  Ultimately, the KMA analysis found that the Mobility Choices program will provide developers in suburban neighborhoods with benefits from cost savings.  As a result, the program will incentivize more housing throughout San Diego, while also providing more safe and convenient transportation options in urban neighborhoods.