MTS OKs transit center housing developments

By Dave Schwab

Grantville Trolley Station a likely favorite for early investment

The search for desperately needed affordable housing recently got a boost from the Metropolitan Transit System (MTS), whose board voted unanimously in October to allow underutilized parking lots to be transformed into affordable homes.

MTS board’s vote followed release of an April report by Circulate San Diego titled “Real Opportunity,” which provides detailed recommendations for how MTS can stimulate the creation of new homes adjacent to transit stations. The report included new research demonstrating a large number of MTS-owned parking lots are substantially underutilized.

“It won’t be until next year that Requests For Proposals (RFPs) go out,” said Rob Schupp, MTS director of marketing and communications, about transit parking redevelopment.

An RFP document solicits business proposals through a bidding process from agencies or companies interested in procuring a commodity, service or valuable asset.

Schupp noted MTS has already been active in developing its transit-station properties.

“Under construction now are 67 units at our Encanto station (Villa Encantada at 505 62nd St. and Imperial) that are 100 percent affordable,” he said adding, “We reduced our parking requirements there by 42 percent.”

Villa Encantada is the redevelopment of an underutilized parking lot next to a trolley station on 1.7 acres. It will include 67 low-income family apartments offering replacement parking for MTS while providing 1,000 square feet of retail space.

The MTS spokesperson said exclusive negotiations are also underway with developers for the Grantville trolley station “to build a combination of for-rent and student housing numbering at least 425 units.”

Schupp pointed out another major rental project at the Grossmont Transit Center in La Mesa has been developed with 527 units (15 percent affordable). In that project, underground parking was required for transit use. MTS leased the property for 99 years.

“We project revenue to be more than $600 million over the length of the lease,” Schupp added.

Circulate San Diego, a regional nonprofit dedicated to advancing mobility, has proposed alleviating the affordable housing crunch by transforming MTS parking lots into low-income housing. Circulate’s proposal, published in the Real Opportunity report, shows MTS has at least 57 acres of available property, much of it underutilized transit parking lots.

Circulate San Diego has gone on record estimating those marketable MTS properties could support development of 8,000 new dwelling units, of which 3,000-plus could be reserved as permanently affordable low-income housing.

“MTS is planning to create a manual for processing these projects within three months,” said Colin Parent, Circulate’s executive director and general counsel. “We anticipate at least the start of the RFPs to begin in 2019.”

Without disclosing any sources, Parent added, “There has been a variety of interest from developers. Proposals have already been submitted to MTS for the Grantville site, and the E Street site. After the publication of our report, we have heard from about a dozen developers asking for additional information about opportunities with MTS properties.”

Two spokespersons for the San Diego Housing Federation, which advocates for regional affordable housing, said reuse of underutilized trolley parking lots is a step forward. But they insist some of the rules of the game need to be changed.

“What we’ve pushed for is an analysis of the needs and demands on each site, and respond to that,” Russell said asking, “If only 10 percent of a site is used, why should you have to replace 100 percent of the parking?“

Federation policy director Laura Nunn said providing affordable housing in MTS parking lots serves two purposes: reducing greenhouse gas emissions while offering low-income residents a viable transportation option.

“Lower-income households have a much lower propensity to own cars,” Nunn noted. “Lower-income households also live more densely, with more people per dwelling. By having a dedicated percentage of affordable housing near transit, it aligns with the goal of promoting transit ridership, which also helps reduce greenhouse-gas emissions. It makes sense.”

MTS is all in on helping out where it can with affordable housing development, said Schupp. But he added it is only one small answer to finding an overall solution to the affordable housing crisis.

“The MTS board supports the full development of our property as Transit Oriented Development is critical for our region’s growth and achievement of Climate Action Plan goals,” Schupp said. “We will be more aggressive in marketing the properties. But even at full build-out, MTS will deliver only a small portion of the new housing needed in the region.”

Schupp noted estimates are that the regional shortfall of affordable housing presently exceeds 100,000 units. He described Circulate San Diego’s estimate of accommodating 8,000 affordable housing units on MTS’s approximately 60 available transit station acres as overly ambitious from a zoning perspective.

“This equates to 133 units per gross acre,” Schupp said. “There is no land outside of Downtown with zoning that allows that kind of density. Also, that kind of development would require Class A mid-rise buildings, which is very expensive to build and doesn’t pencil out.”

The property at Grantville, cited Schupp, is zoned for 109 units per acre. “But feasibility studies show that the land can only support between 40 and 53 units per gross acre,” he said. “So the effort to fully develop these properties — which is in everyone’s best interest — is going to require city zoning changes. And the 8,000 units, however attractive, is likely not achievable.”

Characterizing the leveraging of public space for affordable housing as “good,” Russell added, “We need to think smart because the scale of the problem is enormous. Every dollar spent on housing in public spaces helps us achieve our goals of promoting transit ridership and decreasing greenhouse gas emissions.”

Russell is optimistic about ultimately finding ways to supply the growing need for affordable housing region wide.

“This is solvable,” he said. “But it’s going to take a long time, and it’s going to take a series of actions, like this.”

—Dave Schwab is a San Diego-based freelance writer. Reach him at dschwabie@journalist.com.