San Diego Municipal Code Div. 8 Coastal Overlay Zone Affordable

Housing Replacement Regulations (Added 12-9-1997 by O-18451 N.S.; effective 1-1-2000.)

The purpose of these regulations is to preserve existing dwelling units within the Coastal Overlay Zone that are occupied by very low income, low income, or moderate income families as defined by California Government Code Section 65590(b). These regulations are intended to implement California Government Code Section 65590 and the City of San Diego’s pro-housing policies, by providing for replacement housing within the Coastal Overlay Zone. (Added 12-9-1997 by O-18451 N.S.; effective 1-1-2000.) (Amended 1-16-2024 by O-21758 N.S.; effective 3-16-2024.)

Regulations Apply

(a) This Division applies to any development that proposes the conversion or
demolition of rental dwelling units within the Coastal Overlay Zone that are
occupied by persons or families of very low income, low income, or moderate
income, except as provided in Section 143.0820.

(b) The following development types shall be reviewed for compliance with the
regulations in this Division:

(1) Conversion from rental units or Accessory Dwelling Units to
condominium units (cooperative or similar form of ownership);

(2) Conversion from residential to nonresidential use; and

(3) Demolition of a residential structure with three or more dwelling units
or demolition of at least five dwelling units when two or more
structures are involved.

(c) Contiguous lots or structures owned by the applicant are considered as one
project.
(Added 12-9-1997 by O-18451 N.S.; effective 1-1-2000.)
(Amended 1-16-2024 by O-21758 N.S.; effective 3-16-2024.)

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(Amended 7-23-2025 by O-21989 N.S.; effective 8-22-2025.)

[Editors Note: Amendments as adopted by O-21989 N.S. will not apply within the Coastal Overlay Zone until the California Coastal Commission certifies it as a Local Coastal Program Amendment. Click the link to view the Strikeout Ordinance highlighting changes to prior language http://docs.sandiego.gov/municode_strikeout_ord/O-21989-SO.pdf ]

Replacement Regulations

This Division is not applicable to the following:

(a) The demolition of a residential structure that has been declared a public
nuisance;

(b) The conversion or demolition of a residential structure to nonresidential use
that is coastal-dependent or coastal-related, as defined by the California
Coastal Act of 1976, as amended, when the nonresidential use is consistent
with the applicable land use plan;

(c) The conversion or demolition of a residential structure that contains less than
three dwelling units; and

(d) The conversion or demolition of 4 or fewer dwelling units on a premises with
more than one residential structure.
(Added 12-9-1997 by O-18451 N.S.; effective 1-1-2000.)
(Amended 1-16-2024 by O-21758 N.S.; effective 3-16-2024.)

(a) Within the Coastal Overlay Zone, the conversion or demolition of dwelling units occupied by households of very low income, low income, or moderate income is prohibited unless provision is made for the replacement of the units on a one-to-one basis.

(b) The replacement requirements to provide dwelling units affordable to, and
occupied by, very low income, low income, or moderate income families can
be met in any of the following ways:

(1) Conversion of existing market-rate dwelling units to units affordable
to, and occupied by, very low income, low income, or moderate
income persons or families;

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(2) Conversion of existing nonresidential development to dwelling units
affordable to, and occupied by, very low income, low income, or
moderate income persons or families;

(3) Development of new dwelling units affordable to, and occupied by,
very low income, low income, or moderate income persons or families
to replace those housing units converted or demolished;

(4) Substantial rehabilitation of deteriorated or dilapidated dwelling units
to units affordable to, and occupied by, very low income, low income,
or moderate income persons or families; or

(5) Contribution of an in-lieu fee to the San Diego Housing Trust Fund or
a contribution of real property that is acceptable to the Executive
Director of the San Diego Housing Commission.
(Added 12-9-1997 by O-18451 N.S.; effective 1-1-2000.)
(Amended 1-16-2024 by O-21758 N.S.; effective 3-16-2024.)

Replacement Regulations

(a) The Executive Director of the San Diego Housing Commission shall be
responsible for determining very low income, low income, and moderate
income affordability standards and residents’ qualifications.

(b) The provisions of Chapter 14, Article 3, Division 7 (Affordable Housing
Regulations) shall be made available to projects described in this division. If
existing dwelling units are to remain on the project site, those units shall be
subtracted from the total number of units permitted under the terms of the
affordable housing density bonus to determine the number of units that may
be transferred to another site.

(c) Regulations controlling the use of development programs, such as density
bonuses or financial subsidies, shall prevail where they are more restrictive
than regulations set forth in this division.

(d) The San Diego Housing Commission shall adopt, and annually update, a
schedule for in-lieu fees.
(Amended 6-12-2001 by O-18948 N.S.; effective 12-12-2001.)
(Amended 3-22-2018 by O-20916 N.S.; effective 4-21-2018.)
(Amended 1-16-2024 by O-21758 N.S.; effective 3-16-2024.)

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Affordable Housing Replacement

(a) The City Manager will review applications for development and determine
whether the proposed development is exempt from the requirements of this
division as described in Section 143.0820. If the project is not exempt, the
applicant shall be so advised and referred to the San Diego Housing
Commission to obtain a Coastal Affordable Housing Compliance Agreement.

(b) Within 45 calendar days of receipt of the application for development, the
Executive Director of the San Diego Housing Commission shall determine
whether the dwelling units to be converted or demolished are occupied by
persons or families of very low income, low income, or moderate income. This
determination shall be based upon a survey of the residents. Information on
tenant income shall be provided under penalty of perjury and shall include
income from all sources, including reasonable return on tenant assets. A
dwelling unit need not be replaced if, based upon a tenant income survey of
the residents, the Executive Director determines that the unit is not occupied
by persons or families of very low income, low income, or moderate income.

(c) Where a proposed development is required to provide replacement units that
are affordable to very low income, low income, or moderate income persons or
families, the applicant shall enter into a Coastal Affordable Housing
Compliance Agreement with the San Diego Housing Commission. The
agreement shall include the following provisions:

(1) A description of the coastal development project, including its location
and the number of dwelling units to be developed, converted, or
demolished;

(2) A description of the affordable replacement units to be provided
including their size and location; and

(3) A description of the method to be used to insure the affordability of
the replacement dwelling units. The term of affordability shall be for at
least 5 years. Affordability shall include the rent or estimated housing
cost and, in the case of for-sale units, the applicant shall identify the
techniques to be used to limit future resales. The agreement shall be
recorded and shall be an encumbrance upon the applicant’s project
until the provisions of this section are satisfied.

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(d) If an applicant chooses to pay an in-lieu fee instead of providing replacement
dwelling units, the agreement shall include a provision that the San Diego
Housing Commission shall develop, and make available as soon as feasible,
the number and type of dwelling units the applicant would otherwise have
been required to provide. The agreement shall also include the amount of the
fee and the manner in which the fee shall be paid in accordance with the
following:

(1) In the case of conversions, the fee shall be due upon commencement
of sales of dwelling units converted to residential ownership status or
upon approval of the final permits for change of use to nonresidential
use;

(2) In the case of demolition, the fee shall be due upon completion of the
demolition;

(3) In the case of new for-sale units, the fee shall be due upon close of
escrow for each housing unit in the development; or

(4) In the case of new rental units, the fee shall be due before occupancy
by any tenant.

(e) The San Diego Housing Commission shall determine the reasonable fees to be
paid by the applicant for the cost incurred by the San Diego Housing
Commission in connection with applications filed hereunder.

(f) Determinations of the San Diego Housing Commission pursuant to this
division shall be final on the 7th calendar day following action by the San
Diego Housing Commission unless a request to be heard on appeal by the
Housing Authority is processed in accordance with the procedures established
by the City of San Diego Housing Commission.
(Added 12-9-1997 by O-18451 N.S.; effective 1-1-2000.)
(Amended 1-16-2024 by O-21758 N.S.; effective 3-16-2024.)

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Dwelling Units

(a) Replacement dwelling units shall provide housing opportunities similar to
those provided by the dwelling units converted or demolished. Replacement
dwelling units shall be acceptable to the Executive Director of the San Diego
Housing Commission in accordance with a Coastal Affordable Housing
Compliance Permit. The replacement dwelling units need not be identical to
those converted or demolished, but should be provided in the same bedroom
ratio.

(b) Priority for location of replacement dwelling units shall be as follows and in
accordance with Section 143.0860(c):

(1) On the site of the converted or demolished units;

(2) Elsewhere in the Coastal Overlay Zone within the same community
plan area; or

(3) Elsewhere in the Coastal Overlay Zone;

(c) Replacement dwelling units that are not located on the same premises as the
converted or demolished affordable dwelling units shall comply with all of the
following:

(1) Replacement dwelling units shall not be constructed within an area
identified as a Low Resource or High Segregation and Poverty
Opportunity Area by the California Tax Credit Allocation Committee
when the development application is deemed complete.

(2) If the converted or demolished affordable dwelling units were located
on a premises within an area identified as a High or Highest Resource
Opportunity Area by the California Tax Credit Allocation Committee
when the development application is deemed complete, the
replacement dwelling units shall also be constructed within an area
identified as a High or Highest Resource Opportunity Area by the
California Tax Credit Allocation Committee and shall not be
constructed in a lower Opportunity Area than the Opportunity Area in
which the converted or demolished structure is located.

(d) Replacement dwelling units shall be provided and available for occupancy
within three years of the date that a converted unit is offered for sale to the
public or that the physical demolition of a demolished unit is substantially
complete.

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(e) Very low income, low income, and moderate income households located in an area identified as a Low Resource or High Segregation and Poverty Opportunity Area by the California Tax Credit Allocation Committee when the development application is deemed complete shall receive priority preference for new affordable dwelling units created under this Division. (Added 12-9-1997 by O-18451 N.S.; effective 1-1-2000.) (Amended 1-16-2024 by O-21758 N.S.; effective 3-16-2024.)

Note: The priority preference for households that qualify for affordable homes as set
forth in Sections 142.1304(e)(3), 143.0720(p), 143.0860(e), 143.1005(b)(4), and
143.1212(f) will not be implemented until a program can be developed and a funding
source can be approved as part of a future action of the Housing Authority or City
Council to ensure successful implementation. For Sections 143.0860(e) and
143.1005(b)(4), only portions applicable to the priority preference are delayed.

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Article 3: Supplemental Development Regulations