• This agenda item was intended to approve a $35K extension of a previously approved contract with the Kosmont Companies to assess a 100 percent affordable housing project on the city owned property called L-7 at 634 Quail Gardens Drive.
• The discussion began with an update from the Planning Services Department on the contract and the proposed work. A representative from the Kosmont Companies then discussed the work to be completed as part of the contract extension.
• There were approximately seven public speakers, six of whom were very much in favor of 100 percent affordable housing and using L-7 for that purpose. Only one speaker spoke in opposition.
• The key question yet to be answered is how the council moved to this point from the March 22^nd council meeting where staff was to return with a report on city-owned properties for 100% affordable housing to this agenda where L-7 would be the one and only location for affordable housing in the near future.
• A motion appeared to have been made at the March 22^nd meeting by council member, Hinze, to direct city staff to prepare a report on all of the city owned land that could be potentially used for affordable housing. Yet, at this June council meeting there was no report, only discussion around L-7.
• The discussion led to the conclusion that without any upzoning, and with no requirement for a general vote under Proposition A law, 72 housing units could be built on L-7 which is a ten-acre parcel of land. The calculation is quite straightforward if the land is directed to be 100 percent affordable housing.
• There was discussion around how the city would need to declare L-7 to be Surplus Land in which case the council would adopt a resolution to that effect at a future meeting. This would invoke the Surplus Lands Act of California:

Surplus Lands Act FAQs

• A motion was made to approve the contract extension and approved 4-1 with council member Ehlers voting NO.
• As one step of the contract extension Kosmont will create a pro forma financial analysis of the property and determine whether this property would be economically viable. There are questions as to whether the city may need to subsidize the development. There are also questions about the availability of financing for the project. Currently, there are numerous affordable housing projects underway in the state making financing options more difficult and competitive.
• The owners in Encinitas Ranch are encouraged to closely monitor city council actions related to L-7 as development on that site as the unmitigated impacts of L-7 and the other housing element site development have not been formally identified.