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Building out: The city of SLO has enough housing under construction to reach its growth cap ahead of schedule 

click to enlarge HITTING CAPACITY In the next 15 years, San Luis Obispo plans to add 10,000 more people, but housing units currently under construction will help the city reach that growth in the next five.

Cover Image From Deposit Photos; Cover Design By Alex Zuniga

HITTING CAPACITY In the next 15 years, San Luis Obispo plans to add 10,000 more people, but housing units currently under construction will help the city reach that growth in the next five.

San Luis Obispo could lose its "slow growth" moniker over the next several years, as pent-up demand for housing propels a building surge across town.

Five large, new neighborhoods are either under construction or about to break ground in the city, and officials say their product alone will push SLO close to its "build-out" population of 57,200 residents—10,000 more than it has now—well ahead of a 15-year schedule.

"There's definitely lot of development happening today," SLO Community Development Director Michael Codron told New Times, "but it's all within the plans we'd created to support our community's economy and ensure sustainable and smart growth."

Many factors are driving the housing boom—chief among them the groundwork that the city laid to help spark it. City Councils have named housing as a top priority in several recent budget cycles—its response to high housing costs, a jobs/housing imbalance, and growing pressure from the state to produce it.

City growth statistics back up what locals are seeing on the streets today. While SLO posted an average annual residential growth rate of 0.6 percent between 2015 and 2020 (below its 1 percent per year growth cap), in the year 2020, the rate doubled to 1.2 percent. SLO leaders expect to see more years like 2020 ahead as projects are built out.

"We are doing some catch-up," two-term SLO City Councilmember Andy Pease told New Times. "We had many years where we were happy to take on the economic activity of jobs and retail, and were not taking responsibility for housing the employees. We made ever-great investments over that time into our community in terms of parks and open space and downtown, but I think we do need to take responsibility to have housing for our workforce.

"We're not a little town," she added. "We are growing."

While SLO's housing plans should surprise no one who's paid close attention to local politics over the past few years, the fact that so many projects have shovels in the ground at the same time is a surprise even to insiders.

Four of the five major planned neighborhoods are on track for completion in the next five or so years. The Margarita and Orcutt area projects—clustered on the southern end of town—are under construction. San Luis Ranch, on the old Dalidio farm between Highway 101 and Madonna Road, recently broke ground. And Avila Ranch, near Buckley Road, will commence construction in the summer. The Froom Ranch property, off Los Osos Valley Road near the Costco shopping center, still needs to get annexed into the city.

These projects—which account for thousands of new homes and units—are coming to fruition now mostly due to economic forces, Codron said. The Margarita and Orcutt area projects date back to 1994, but involved multiple property owners and stalled for years. San Luis Ranch and Avila Ranch are more recent, single-ownership projects that progressed quickly during the strong pre-COVID-19 economy.

"Here we are, five years into our new general plan, and we already have construction at San Luis Ranch," Codron said. "Altogether, those specific plan areas account for the vast majority of the residential growth that this city will experience for the next 15 years."

Trust the plan?

Two top concerns that SLO residents express about the new growth involve affordability and infrastructure. How much of this new housing will be in reach for lower-income and working-class locals? And, can the city's infrastructure—its roads, emergency services, water, etc.—really handle it?

The former question came up at the April 6 City Council meeting. Erik Justesen, CEO of local development firm RRM Design Group, submitted a letter asking the council to consider rezoning a piece of vacant, manufacturing-zoned property on Venture Lane for low-income housing.

"We envision 120 Venture Lane to be a predominantly income-qualified affordable and workforce mixed-use project with rental apartments, providing a residential product that is severely lacking in SLO," Justesen's letter read.

The City Council, with support from city staff, unanimously rejected the request. Pease said that SLO has little wiggle room to rezone new land to residential—even with a tempting offer of affordable housing—given its current path to build-out.

click to enlarge BUILD BUILD BUILD San Luis Obispo is on pace to build thousands of new homes over the next five years, pushing the city's population toward 57,200 people. - FILE PHOTO BY JAYSON MELLOM
  • File Photo By Jayson Mellom
  • BUILD BUILD BUILD San Luis Obispo is on pace to build thousands of new homes over the next five years, pushing the city's population toward 57,200 people.

"We're not an airline—we can't oversell our seats," Pease told New Times. "No matter how great the project seems, that [57,200 population] cap is not arbitrary. It's tied in with water supply, police, and fire. ... Would one project tip the balance? Maybe not, but it doesn't seem fair to pick and choose which projects to switch up to residential without a full and inclusive process."

Affordable housing is already an important component of SLO's housing plan, city officials claim. How much of it will ultimately get built over the next several years, though, is a different question.

Income-restricted homes are included as a small share of the planned homes in the five major neighborhoods under construction. Codron said his office is also working on new policies to guide infill development that will promote a diversity of housing types and sizes—encouraging more density near downtown, with affordable-by-design units.

Even so, such policies have their limits in a high-priced market like SLO's.

"The housing market in SLO is still not producing any affordable housing by its definition unless there is a government deed restriction on that unit," Codron said. "At the same time, as a planner, I think that in the long run, our affordable housing goals are going to be well served by having a really diverse housing stock."

On top of affordability concerns, locals are also raising questions about how the arrival of thousands of new homes and residents might strain city infrastructure and quality of life.

A residential group, Preserve the SLO Life, has filed two lawsuits against the city challenging the Avila Ranch and Froom Ranch projects, alleging that the city didn't properly evaluate—and attempt to mitigate—the environmental impacts, like increased traffic.

In the Avila Ranch lawsuit, Preserve the SLO Life won a $678,000 settlement, which helped fund some traffic and noise improvements in the neighborhood. The Froom Ranch case is still in court, according to member Kathy Borland.

Borland said her group isn't opposed to SLO's growth plans. It just wants the city to make a commitment to its citizens to build at a responsible pace and not let developers off the hook in the process, she said.

"We're not anti-growth. But we are about infrastructure and supporting the residents that already live here," Borland said.

City Councilmember Pease said she respects residents' concerns about development impacts but believes the city is doing a thorough job of evaluating and planning for them.

"I wouldn't be voting to approve projects that I don't think are in compliance with our plans and CEQA [the California Environmental Quality Act]," Pease said. "If it is impactful, we have to say is it worth having a little snarly traffic in order to ensure we have more equity and access." Δ

Assistant Editor Peter Johnson can be reached at pjohnson@newtimesslo.com.

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