A proposal to require that developers seeking approval for high-density rental housing projects rent up to 10 percent of their units at below-market rates — affordable to middle-income earners — went nowhere fast at City of Santa Barbara’s Planning Commission last Thursday. The commissioners rejected what’s known as the “inclusionary housing requirement” by a vote of 6-1. The commissioners found fault with a consultant’s report that indicated such requirements would be financially feasible and that developers would still be able to reap earnings of 5 percent. Developers and their agents said the report failed to accurately reflect the cost of construction, the cost of labor, the cost of land, and the cost of permitting.
The inclusionary requirement was proposed to ensure that the benefits of developments allowed special high densities and relaxed parking requirements would accrue to a broader socioeconomic spectrum including the so-called “missing middle.” Typically such developments, known as Average Unit-Size Density developments — AUDs — in the parlance of planning wonks, have targeted higher-income tenants making up the city’s upper middle class. Developers have complained such requirements would not be economically feasible. Some planning commissioners worry the requirement was in reality a political Trojan horse concocted by critics of the AUD program to cripple it. The commissioners demanded new and better information that better reflected the costs of doing business in Santa Barbara. They also objected that discussions about inclusionary housing requirements should be part of a broader discussion about getting more high-density housing built downtown.