Transforming San Diego: Hillcrest and University City Approve Higher Density and Zoning Reforms

San Diego City Council Approves Landmark Growth Plans

San Diego’s City Council has approved ambitious growth plans for Hillcrest and University City, aimed at doubling the populations of these neighborhoods and transforming their urban landscape with high-rise buildings and enhanced transit access. These plans are critical in addressing the local housing crisis by encouraging higher-density development.

A New Era for Development

The new plans significantly alter the zoning landscape in Hillcrest and University City, allowing for more high-rise and mid-rise buildings. Central to these plans is the Complete Communities program, which streamlines the entitlement process for suitable projects to proceed "by right," facilitating easier initiation of these projects. Developers can now engage in large-scale projects with less bureaucratic red tape. The plans focus new density in high-resource areas with robust infrastructure, making them ideal for investment. Developers can leverage the relaxed zoning regulations to build higher and more densely, maximizing land use and potentially increasing returns.

Hillcrest/Uptown Plan Specifics

The Hillcrest Focused Plan Amendment updates the 2016 plan, allowing for 17,200 new homes, some in buildings up to 20 stories. This plan could more than double the population of the Uptown Community Planning Area, including Hillcrest, University Heights, Mission Hills, and Bankers Hill, from 39,000 to over 100,000 by 2050. Density increases will primarily occur in the central and commercial cores of Hillcrest, promoting mixed-use development to support vibrant public spaces and local businesses. The plan also includes the potential addition of a street car, connecting Hillcrest with North Park, Bankers Hill, and Downtown.

University City Plan Specifics

The University Community Plan Update replaces a nearly 40-year-old 1987 plan, calling for up to 29,000 new homes and supporting 72,000 additional jobs in sectors like retail, research, technology, and healthcare. This transformation will focus on key corridors and transit areas, reinforcing University City as a major employment hub. High-rise buildings and commercial spaces are designed to attract biotech and life science companies, with integrated public spaces and parks to enhance livability.

Leveraging San Diego's Complete Communities Program

A big piece of both of these updated community plans is leveraging the San Diego Complete Communities program, which incentivizes higher-density development and promotes affordable housing. By building affordable units, developers receive incentives such as density bonuses, reduced parking requirements, and faster approvals.

Key Benefits of Complete Communities for Developers

The Complete Communities program offers several significant advantages for developers:

• Density Bonus: Projects that include affordable housing units can increase the number of units, in some cases several times the underlying density zoning, allowing developers to maximize the use of available land and increase profitability.
• Affordable Housing Requirements: A portion of new units must be affordable, addressing the housing affordability crisis while benefiting from the density bonus. These units must be accessible to households earning up to 120% of the Area Median Income (AMI), with specific quotas for low and very low-income categories.
• Decoupling Parking Requirements: Developers can offer housing without mandatory parking spaces, reducing construction costs, especially in high-density areas near transit where car ownership is less necessary. This flexibility allows for more affordable housing options.
• Expedited Permit Processing: The program includes a fast-track review process, requiring city departments to process qualifying housing project permits within 30 days, significantly reducing the time and cost associated with development.
• Incentives for Mixed-Use Development: Encourages integration of commercial and residential spaces, promoting vibrant, walkable communities. Mixed-use zoning supports retail, office, and residential uses within the same project, increasing overall project value and appeal.

The Bigger Picture

The approval of these plans marks a shift in San Diego's urban development strategy, prioritizing density and efficient land use. Along with higher density, these plans call for more pedestrian paths, bikeways, and public transit. As city planners work on additional neighborhood growth updates, including Clairemont, the College Area, and Mid-City, developers can expect more opportunities to engage in transformative projects across the city.

Addressing Infrastructure and Housing Shortage

San Diego faces a significant housing shortage, with a gap of over 134,500 homes needed to meet regional demand. In 2023, San Diego County issued 11,673 housing permits, marking a 21% increase from the previous year, with 9,691 of these permits issued within the city. Despite the record number of permits issued in 2023, the city still falls short of its state-mandated target of 13,500 new homes per year to meet demand, and lags behind other comparable markets in new construction. This shortage has driven up rents and made housing unaffordable for many residents. Initiatives like "Complete Communities Now" aim to expedite housing construction and address this critical issue.

A Growing Future

San Diego’s new growth plans for Hillcrest and University City represent a bold move towards higher density and smarter zoning. San Diego remains positioned as a premier market for commercial real estate investment with the combination of limited housing, fast-growing tech sectors, and high desirability. For developers, this is an opportunity to shape the future of these neighborhoods. Embracing these opportunities can help drive San Diego’s vision of sustainable urban growth.

For more details on the Hillcrest proposal, visit Plan Hillcrest.

For more details on the University City proposal, visit Plan University.