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San Diego supervisors adopt inclusionary housing ordinance with phased rules, staff study required
Summary
After months of outreach and a lengthy public hearing, the San Diego County Board of Supervisors approved an inclusionary housing ordinance that requires affordable unit set‑asides for larger projects, sets a 10‑unit minimum project threshold, establishes prioritized alternative compliance options, and directs staff to return with an updated feasibility study in fiscal 2027–28.
The San Diego County Board of Supervisors on June 24 adopted an inclusionary housing ordinance that requires qualifying residential developments to include or financially support deed‑restricted affordable housing.
The board's action sets a 10‑unit minimum project size for applicability and selects Tier 2 set‑aside options identified by county staff after third‑party review. Under the rules the board approved, developers may meet obligations on site or pursue a prioritized list of alternatives: land donation (with covenants), affordable for‑sale ADUs on site, payment of an in‑lieu fee (structured so fees can cover up to half of the obligation and may be combined with other measures), and, only as a last resort, off‑site construction in specified high‑resource or VMT‑efficient areas. Projects that deliver significantly more low‑income units than required are eligible for priority review and additional incentives, including an expanded density bonus under local rules while remaining compatible with state density bonus law.
Why it mattered: County staff told the board that implementation of a long‑promised inclusionary policy is necessary to meet commitments in the county's housing element and to begin capturing land‑value gains from upzoning or new approvals. Staff and their consultants — AECOM with a KMA peer review — estimated the ordinance could generate roughly 15 to 60 deed‑restricted units annually under different policy choices and emphasized the need to balance deeper affordability with project feasibility.
What proponents said: Advocates and community groups urged stronger set‑asides and safeguards to keep affordable units located near transit and services. "Inclusionary housing is a vital and proven tool for producing affordable housing," said Nicole Lily of a youth housing group, arguing for tiered thresholds and frequent feasibility updates.
What industry said: Homebuilding industry representatives and small developers urged flexibility and a phase‑in to avoid undermining market‑rate production. "Inclusionary requirements do add cost to development," said Amy Faucet of the Building Industry Association. Developers asked for incentives and a limited, predictable transition window so projects already in process are not destabilized.
Board action and next steps: Vice Chair McGomery Step moved the package of choices recommended by staff with a set of implementation instructions; the board added direction for staff to return during FY27–28 with a fresh economic study using updated market data and to refine guidelines that require applicants to demonstrate why higher‑priority alternatives were infeasible before using off‑site development. The motion passed on a roll call vote with Supervisor Anderson voting No. Staff will draft ordinance implementation guidance, finalize fee schedules, and update feasibility research as requested by the board.
What to watch: The ordinance is one of several tools the county is using alongside zoning updates and financial programs. Adoption does not itself produce units; the number and affordability level of homes built will depend on project pipelines, incentive use, and how widespread alternative compliance options such as land donations or in‑lieu fees are employed.
