San Luis Obispo unveils downtown zoning change to encourage smaller, denser housing 

A new proposed zoning change to downtown San Luis Obispo would try to incentivize smaller, denser housing development in the city's core—without overbuilding it.

That's the fine line that city officials say they're trying to walk with the "downtown flexible density program," a policy that would essentially eliminate density restrictions on downtown housing units that are 600 square feet or smaller.

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• Map Courtesy Of SLO City
• DENSER DOWNTOWN The city of San Luis Obispo is proposing a zoning amendment for its downtown core (center, in white) that would facilitate the development of denser, smaller housing.

Community Development Director Michael Codron told New Times that the program is designed to attract smaller, denser, and—hopefully—more affordable housing that fit within the current scale of downtown.

"You don't necessarily have to have tall, big buildings in order to have density," Codron said. "What we're doing is simply taking residential units that are 600 square feet or less out of the calculation for the maximum amount of residential density [allowed in a building]."

The zoning change, as drafted, only applies to SLO's "downtown core," places a development cap of 500 units, and sunsets in 2029. According to Codron, the policy bridges a gap between the city's current density restrictions and its goals for downtown housing.

"There's a little bit of a mismatch right now [in our policies]," he said. "You can build a relatively large building [downtown], but you can't really fill that up with residential units, unless they're very large. And larger residential units downtown are very, very expensive."

On top of lifting density restrictions, the city is incorporating additional incentives to try to lure developers to build the smaller units. Per the policy, downtown projects with units that are 600 square feet or smaller would be exempt from inclusionary housing requirements and typical parking mandates.

In practice, that means that qualifying projects would not have to include affordable housing in them and would only be required to provide one parking space for every two units.

Codron said the rationale behind those exemptions is to try to remove barriers to development—and hope that the smaller, denser units will be rented at rates that are attainable for working locals.

"That's the balance we're trying to strike," he said. "This City Council is interested in increasing housing in the downtown core, and there are trade-offs for that."

SLO city published a draft of the zoning policy on Jan. 19 and is accepting public comments on it ahead of a Feb. 22 Planning Commission hearing. The City Council is scheduled to vote on the change on March 21.

Dozens of SLO residents have chimed in thus far on an "Open City Hall" online forum, sharing mixed feelings about the policy. Many commenters supported the city's vision for denser housing downtown.

"Yes—absolutely!" one resident wrote. "Our downtown has seen a decline in both businesses and business hours. It is not what it once was and is in a sad decline. More affordable housing around the area for young professionals is a great way to boost the culture."

Others agreed with the overall denser housing concept but expressed concern that the resulting market-rate units would be too expensive for most.

"Yes, definitely," a resident wrote, "but not if they are $2 million condos. People living downtown would make it safer, and more lively, but an effort must be made regarding costs."

Another resident put it more bluntly: "If you think that you can put in more high-cost apartments and have them be within reach of these young people, you are dead wrong. The cost of housing in this county is unaffordable for so many. These are people you rely on to do the jobs in this area and have so far priced them out of being able to live here."

Many other locals opposed the program outright—arguing that the higher density units would exclude families, exacerbate parking issues downtown, and negatively impact city character.

"No more downtown housing," a resident wrote. "The infrastructure is not set up to handle the impact. Parking space is a huge concern as well as losing the small-town feel that people come here to visit."

Krista Jeffries, founder of the pro-housing group SLO County YIMBY (Yes in My Backyard), called the zoning change a "good start."

"Overall, as a concept, I think it's good. I'm glad they're prioritizing housing in the downtown area," Jeffries told New Times. "The available data we have is that new construction does immediately stabilize, if not lower, rent prices in the immediate neighborhood. It's going to take pressure off the existing housing."

But Jeffries also questioned the city's proposed sunset date of 2029 as well as its "narrow" focus on the downtown core.

"These projects are going to take a long time, and with interest rates and costs being so high, I don't see it really producing a whole lot in the time frame they're giving it," she said. "I hope it's not the only thing they do. I hope they keep going with it.

Codron said that the city—if it adopts the zone change—will have a chance to evaluate the program in the future to see if it's something it'd like to keep, expand on, or do away with.

"Ultimately," he said, "if the City Council likes the resulting development and wants to continue on that path, then opportunities will be available." Δ

Assistant Editor Peter Johnson can be reached at [email protected].