Opinion: Bonus programs delivering needed housing for San Diego

Everyone now agrees that we need more homes. The public has caught up to where economists have been for decades — high prices are driven by a shortage of homes. It’s a matter of supply and demand.

Since 2002, San Diego’s City of Villages Strategy proposed allowing more homes by adding zoning capacity near transportation infrastructure. The 2015 Climate Action Plan sought something similar, with a focus on climate-friendly growth near public transit.

Neither the City of Villages Strategy nor the Climate Action Plan actually upzoned anything. They called for future updates to community plans to someday allow for more homes. Community plans are the neighborhood-level planning documents that determine what is allowed to be built in a specific location. There have been two dozen plans completed or begun during the last decade. Some of those plans upzoned for more homes. Yet many did not.

Why the gap? Land use decisions are politically treacherous. Voters might agree conceptually that we need more homes, but object to new building in their own neighborhoods. (The phenomenon is called “Not in My Back Yard.”) The mayor and council sometimes have cold feet about upzoning for more homes, despite their stated commitment to housing affordability.

Fortunately, there’s a solution that is already working. San Diego has several bonus programs that bypass the political gridlock and allow more homes than restrictive community plans. These programs all provide some package of benefits to home builders, if and only if they dedicate a share of their projects as permanently affordable homes. The idea is to create a win-win. The public gets more affordable homes, and investors get an easier path to construction.

Recently the city of San Diego released an annual report on housing permits. The numbers are striking: More than half the homes permitted in 2024 used these bonus programs. While community plan updates dominate public debate, bonus programs are quietly delivering results.

Among these programs, the density bonus program stands out as the most productive. Density bonus law has been on the books for decades in California, but was sparsely used. While I served as the policy director at the San Diego Housing Commission, I convened a working group to develop a local enhancement to the anemic state law. Instead of capping developments at 11% affordable, we proposed allowing up to 15%, with a corresponding increase in incentives and development capacity.

Our proposal was adopted by Mayor Kevin Faulconer and the City Council in 2016. Then-Councilmember Todd Gloria voted for its approval. In 2020, I had moved on to Circulate San Diego, and we sponsored a bill with Assemblymember Lorena Gonzalez to extend San Diego’s bonus program statewide. Then-Assemblymember Gloria voted for its expansion statewide. It was the most impactful housing production law signed by Gov. Gavin Newsom that year.

In 2020, San Diego adopted its complete communities program. It operates like an enhancement to the density bonus, but with more complications and restrictions. Projects that qualify can be larger, in exchange for more on-site affordable homes.

Not only are the bonus programs creating more homes overall, they’re also driving the production of deed-restricted affordable homes. San Diego’s independent budget analyst found that 70% of all affordable units permitted from 2021 to 2024 used the density bonus program. During that same span, the city’s inclusionary policy resulted in only one unit.

Community plan updates have their purpose, and at times they have increased housing capacity. But the citywide bonus policies are driving production. They provide builders with predictable rules that apply everywhere. They distribute housing opportunities more evenly across the city, rather than concentrating development in the handful of neighborhoods with recent updates to their plans.

Compare that to community plans, where identical housing challenges require separate years-long processes for each neighborhood, with varying and often contradictory results.

The lesson is clear. Bonus programs, with real incentives to build affordable units, are actually driving production of affordable homes. For our leaders to make good on their promise for a more affordable San Diego, then successful bonus programs must be their top priority. The data shows us the path forward — we should defend and strengthen the programs that are actually building affordable homes today.

Parent is the CEO and general counsel of Circulate San Diego.