A new incentive program to boost affordable housing is coming to San Luis Obispo County, and it models itself on the state’s density bonus scheme.
Called the Regional Housing Incentive Program, builders can choose to participate by offering on-site guaranteed affordable housing for multi-family developments or by paying into the proposed regional housing fund through in-lieu fees—all in exchange for favorable local development requirements.
The SLO County Board of Supervisors tentatively approved the program on Sept. 23 in a 4-1 vote with 2nd District Supervisor Bruce Gibson dissenting.
“My main criticism of the incentive program is that it lacks the ambition necessary to make any real progress on getting affordable housing built,” he told New Times via email. “The revenue goals it sets are weak—less than half of the money raised by the IHF [Inclusionary Housing Fund]. I would note that Supervisor [John] Peschong declared the IHF a ‘failure’ when it was raising $800,000 per year—so what are we to expect from the incentives program?”
A similar vote outcome took place in 2022 when the Gibson was the only supervisor who rejected nixing the Title 29 Affordable Housing Fund, which consequently voted out the county’s Inclusionary Housing Ordinance.
The ordinance was the only source of local revenue to support affordable housing in unincorporated areas of the county. It required developers, in certain instances, to incorporate a small number of affordable units into their projects or pay in-lieu fees starting at $8 per square foot to support future affordable housing production.
The overarching reservation from supervisors was that the contributions to the affordable housing fund weren’t large enough to make a dent and subsequently were an unfair burden on the housing industry.
Only available for inland multi-family developments, the new Regional Housing Incentive Program is based on builders accruing between one and six incentive points.
Providing on-site guaranteed affordable housing accrues two incentive points for every “very low-income” housing unit. Paying in-lieu fees to the Regional Housing Fund also gains points. Incentives include increasing maximum allowed dwelling units per acre, increasing maximum floor area, reducing minimum off-street parking, and reducing minimum setbacks, among others.
Developers can earn one incentive point for every $30,000 paid as in-lieu fees.
According to the county staff report, nonprofit housing builders identified between $4 million and $5 million annually countywide as the local funding gap for affordable housing.
Contributions to the regional housing fund are expected to close that gap. Currently, there are 750 approved guaranteed affordable units in the county, of which 300 are in unincorporated areas. The target annual funding amount for collected in-lieu fees is $450,000.
But Gibson said that staff’s market analysis was ignored, and the program focuses more on satisfying developers.
He told New Times that, originally, staff recommended that incentive points be priced at $50,000 each. But a negotiation with the Housing Element Implementation Steering Committee changed that.
“The builders apparently thought that too much and convinced the ad hoc committee to recommend $30,000 per point,” he said via email. “Similarly, there is no rationale for what one incentive point purchases in terms of exceptions to standards. For instance, all guest parking in a project can be eliminated—no matter how big the project (three units or 300!).”
At the supervisors’ meeting, representatives from groups like People’s Self-Help Housing, REACH Central Coast, the SLO Chamber of Commerce, the Housing Authority of SLO, and even the Dana Reserve project expressed support for the incentive program.
Third District Supervisor Dawn Ortiz-Legg said the county has a lot of “catching up” to do because its land use regulations remained unchanged for 40 years. The new incentive program, she said, gives more flexibility to builders.
“It’s demonstrating that we’re trying to increase multi-family housing,” she told New Times. “The inclusionary housing fund doesn’t do anything like that at all. This responsibility of building more housing should be everybody’s responsibility. It shouldn’t just be the home builders’ responsibility.”
The tentative green light of the incentive program comes on the heels of a unanimous Aug. 19 action by the board to encourage multi-family dwelling developments. The final hearing on the program is slated for Oct. 21. ∆
This article appears in Oct 2 – 12, 2025.