Grantville building boom could be model for solving San Diego's housing crisis

San Diego officials say they may have a local model for their strategy to solve the city’s housing crisis by placing dense high-rise apartments and condominium complexes along trolley lines.

Grantville.

Three years after the city made radical changes to the growth blueprint for the aging, industrial area sandwiched between Mission Valley and San Diego State, an impressive building boom is taking place.

More than 1,000 housing units, some of them market-rate and some reserved for people with low incomes, are either under construction or have recently been completed in Grantville, which is located on the trolley’s green line.

And city officials and property owners say several more building projects are in the pipeline, with interest from housing developers significantly on the rise.

"You are starting to see some change in a community that's been desperate for it," said Matt Adams, a member of a local community planning group. "Grantville was a place you went to get your tires changed or get some soup, but it was never a place you wanted to be. We want it to become the next Little Italy."

The new projects in Grantville include the 750-unit Hanover Mission Gorge, the 80-unit Zephyr for low-income residents, the 80-unit Blue Water for low-income residents and the 85-unit The Stella for homeless veterans. In addition, Wakeland Housing is building a 75-unit project for low-income seniors on Glacier Avenue, and Fairfield Residential is planning the 250-unit Gravity Apartments on Mission Gorge Place.

The so-called Grantville Focused Plan would add as many as 8,275 housing units and 22,000 people to the neighborhood. San Diego State University students and staff are considered the most likely tenants for much of the housing.

Mayor Kevin Faulconer singled out Grantville last week during his annual State of the City speech as an example of the dense projects San Diego needs to solve its housing affordability crisis.

Faulconer said part of the credit should go to his efforts to streamline approvals for housing projects and to update growth blueprints for communities across the city so that more dense housing projects can be built. And Grantville’s building boom could accelerate if the City Council embraces the mayor’s other proposals to eliminate building height limits, wipe out parking requirements and allow unlimited density in projects with low-income units, he said.

“We’re excited to see that our planning efforts in Grantville are producing results so quickly,” said Mike Hansen, the city’s planning director. “We’re seeing more housing, particularly affordable housing, near transit that will revitalize the community and help us achieve our citywide housing and environmental goals.”

Hansen was referring to the city’s climate action plan, which requires sharp reductions in commuting by car as many more people live along trolley lines and use them to get to work.

“This is a great example of allowing for by-right development around transit stations that can be applied in other areas of the city,” Hansen said.

Adams said it’s particularly encouraging to see the 750-unit Hanover Mission Gorge project under construction on Twain Avenue in Grantville, because those units will be market-rate instead of subsidized for low-income residents.

Some had expressed concerns that Grantville would attract primarily low-income projects because The San Diego Housing Commission targeted the area for bonus incentives. But only about 25 percent of the new units are low-income.

Jeff Edgren, director of acquisitions for low-income developer Affirmed Housing, said the Housing Commission incentives played a role in his company building three new projects in Grantville.

But, Edgren said, one way Grantville may not be a citywide model yet is that the relatively unknown area still isn’t appealing enough to renters to spur developers to build classic high-rise buildings there.

"Some of the densities allowed there are pretty extreme -- you're looking at over 100 units an acre," he said. "But you're not going to see any towers there. The rents in the area still don't support a tower, so they're all going to be four or five stories."

Another way Grantville may fall short of becoming a model is the near absence of resident backlash against the aggressive zoning changes approved in 2015 as the Grantville Focused Plan.

There was no backlash because the mostly industrial area, which is dominated by self-storage facilities and automotive businesses, had essentially no residents before the zoning changes.

That won’t be the case in most other neighborhoods. The city has already struggled to get approvals in recent years for dense housing projects in predominantly single-family home communities such as Clairemont.

“Single-family homeowners tend to be the most resistant to change," Edgren said.

Like other communities where the city envisions dense development, Grantville also faces some geographic challenges, such as flooding.

David Smith, chairman of the local planning group and a Grantville property owner, said the city should consider spending roughly $15 million to solve flooding problems preventing development on much of the land next to the trolley stop.

"Most developers won't even look at it because there is still a humungous problem with flooding from Alvarado Creek," he said of the up-zoned land closest to the trolley.

The city and county’s regional planning agency, the San Diego Association of Governments, completed a $500,000 study of the problem in 2017 that included proposed solutions. But Smith said the city has been slow to act since then.

City officials consider the creek and the San Diego River assets to the community that could become more prominent in redevelopment plans in coming decades. The growth blueprint for Grantville envisions the river, which now flows through the area inconspicuously, eventually becoming a centerpiece that could someday feature adjacent parks and possibly open-air restaurants overlooking it.

Regarding land near the trolley stop, a large parcel owned there by the Metropolitan Transit System appears likely to be developed soon. In November, an MTS spokesperson said exclusive negotiations have begun with developers to build a combination of for-rent and student housing with at least 425 units.

Smith said, despite his frustration over the flooding problem affecting property he owns, the recent building boom is still impressive.

"I'm encouraged by the progress so far," he said. "We are getting more interest now than we ever have from those that want to do redevelopment. There is traction, and people are doing things."

Another reason for optimism in Grantville is a ballot initiative voters approved in November that would transform the city’s Mission Valley stadium site, which is just west of Grantville, into a second campus for San Diego State.

"Grantville would be between the university and the new university, so you could go to either facility," Edgren said.

Adams, the planning group member, said community leaders have some concerns about how that new development, called SDSU West, would affect traffic congestion in Grantville. But Adams, who also works for the Building Industry Association, said he is optimistic that community concerns will be prioritized during planning efforts.

SDSU West could accelerate efforts to upgrade Grantville and add even more density, he said.

"When investors start seeing exciting things going on, they're going to want to be part of it," he said. "When that gets going, I think it will serve as a catalyst for more development and redevelopment in Grantville."

david.garrick@sduniontribune.com (619) 269-8906 Twitter:@UTDavidGarrick

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