South County Housing asks city to rewrite zoning ordinances in
order to make housing project comply with regulations
A nonprofit housing developer is hoping Gilroy officials will get creative with the city’s growth-control laws to clear the way for dozens of new apartments for low-income families. But the proposal has at least one councilman worried about “playing favorites” with the city’s zoning laws.
To make its 303-unit Rancho del Sol project comply with city regulations and “pencil out” financially, representatives for South County Housing are asking the city to rewrite zoning ordinances and exempt the group from a building-permit competition that all other developers must face.
The project, slated for Gilroy’s northern reaches just west of Monterey Street, proposes a blend of market-rate and affordable homes and condominiums, as well as rental apartments earmarked for low and very-low income families.
South County executive director Dennis Lalor said the project relies on a formula previously used in the Los Arroyos Neighborhood, another mixed-income community in northern Gilroy. While the spirit of the Rancho del Sol project remains the same, Lalor says that dwindling money sources has created “extraordinary circumstances” that require city leaders to rethink its approach to affordable housing.
“When you don’t have a lot of public dollars, this is a rare opportunity for us to make this work,” Lalor said.
Specifically, South County is asking for 76 building permits for market-rate homes without having to pass through the city’s building-permit competition, known as the Residential Development Ordinance. Instead, South County is asking council to count them under the “affordable housing” category, which has no competitive process.
In addition to a request to skip the building-permit competition, South County is asking for new zoning language that would allow it to exceed the 225-unit cap on affordable housing projects.
Councilman Craig Gartman planned to meet with South County officials today, but expressed reservations about the proposal.
“Do you know how many developers a day call me and ask how they can get additional RDO units?” Gartman said. “I had another person come in with an affordable project for 40 units and because the permits weren’t there in the RDO, the affordable project disappeared. Are we going to start playing favorites with the RDO numbers? I think that would be very shameful if that occurred.”
The market-rate units South County is requesting would subsidize 79 rental apartments earmarked for low- and very-low income families. The majority of the market-rate homes would sell for $650,000 to $750,000, while the bulk of the low-rent apartments would range from $495 to $950 per month. Officials traditionally require the market-rate portion of such projects to pass through the building permit competition, while freeing lower-priced units from the competition.
In their deliberations Dec. 19, council members will have to balance the issue of fairness against the city’s broader goal of creating affordable housing, as embodied in the Neighborhood District Policy approved in recent months. The planning guidelines lay out a vision of diverse neighborhoods with homes that are affordable to all income ranges.
“From a staff perspective, we think it’s acceptable,” City Planner Melissa Durkin said of the South County proposal. “Allowing them to have the market rate units allows a deeper subsidy for the affordable units. Having market rates mixed in with affordable units makes it a more sustainable community in the long term. If we don’t allow the market rate units, it’s likely the very low income units will go away.”
