Council introduces amendment to allow mixed‑use housing in Airport Area Specific Plan; votes 5–0

The San Luis Obispo City Council voted 5–0 on May 6 to introduce an ordinance amending the Airport Area Specific Plan to allow mixed‑use residential development within service commercial (CS) and manufacturing (M) zones, subject to a conditional use permit or, for smaller projects, a director‑level minor use permit.

Planner John Rickenbach told council the amendment responds to city housing goals and prior housing element programs (programs 5.5 and 6.13) and land‑use policy encouraging compatible mixed uses. He summarized the history: the Airport Area Specific Plan (adopted 2005) had limited residential uses because of an earlier Airport Land Use Plan. In 2021 the county updated the Airport Land Use Plan and removed the residential density limitation for Safety Zone 6, opening the possibility to consider residential uses in much of the specific plan’s roughly 1,200 acres. Rickenbach said the ordinance language and an addendum to the programmatic Final EIR were prepared to avoid new environmental impacts beyond those already considered.

Fiscal and infrastructure concerns drove the staff recommendation for a conditional use permit (CUP) framework. Rickenbach said the underlying property tax‑sharing agreement established when the area was annexed places the city at a relative disadvantage for property tax revenue. A fiscal‑impact study by consultant COSMOS/Comstomet (as summarized by staff) found mixed‑use development in parts of the specific plan could be fiscally negative for the city unless costs were offset; staff discussed several possible mechanisms to achieve fiscal neutrality, including a community facilities district (CFD), renegotiation of the county‑city tax‑sharing agreement, an infrastructure financing district (IFD), or project‑level requirements to preserve minimum commercial uses. Rickenbach said a project‑level CUP review was the pragmatic first step while a CFD or county negotiations could be pursued in parallel.

How review would work: Staff proposed the CUP (or minor use permit for smaller projects) to enable project‑by‑project review of sewer/water capacity, public‑safety and emergency response, traffic and noise compatibility with aviation, fiscal neutrality, and other site‑specific issues. To expedite smaller projects, staff proposed a threshold consistent with the city’s development review process: projects with 49 or fewer residential units and up to 10,000 square feet of commercial could be processed as a director‑level minor use permit; projects of 50 units or more (or larger commercial footprints) would require a CUP and planning commission review. Rickenbach said future projects will also require their own CEQA review.

Public testimony and business support: The San Luis Obispo Chamber of Commerce testified in favor of the amendment and specifically recommended that the CUP threshold follow the city’s 50‑unit policy so smaller projects could be processed at the director level. The chamber also urged the city to study a CFD in the specific plan area to address infrastructure and maintenance funding. Rickenbach said those options were feasible but would take additional time and negotiation, particularly any tax‑sharing changes with the county. City Manager McDonald told council county work on a tax‑sharing agreement is underway but remains a multi‑party, multi‑year effort beyond the city’s sole control.

Council action: Councilmember Francis moved to approve staff recommendations with amended language creating the 50‑unit threshold for streamlined review; Councilmember Boswell seconded. Roll call vote was 5–0 in favor of introducing the ordinance. Councilmembers said they supported the approach to enable housing while preserving project‑level review of fiscal, safety and infrastructure impacts.

What happens next: The ordinance was introduced for further hearings and adoption; staff will return with additional public hearings and project‑level applications will require the findings described in the ordinance (adequate water/sewer, fiscal neutrality or offsets, compatibility with airport safety/noise and emergency response, and CEQA review for each project).

Ending: Council advanced the airport area mixed‑use amendment and asked staff to coordinate with county, airport, and public‑safety partners on implementation details; staff noted a CFD or tax‑sharing negotiations could be pursued in parallel but would require separate multi‑party processes and additional time.