Artist rendering of Watermark units

The city of Del Mar passed a key zoning amendment on October 19 that helps it comply with state housing laws, but it's too little, too late for the developer of the lots, who will now move ahead by-right.

Watermark Del Mar, a controversial project that will yield 10 affordable units in the North Commercial zone, has been in the works for seven years. The zoning change allows higher density in the area, but the project still needs a specific plan amendment.

And due to local opposition all along, the developer expects only more delays.

"We have seen nothing to indicate that a viable 20 dwelling units per acre multi-family project with 20 percent affordable units will result from the city’s current efforts," said a letter from their attorneys.

It was only two weeks ago that the city approved a draft 6th cycle housing element update – all while still juggling requirements and penalties from two previous cycles.

Del Mar's sluggish pace in building enough affordable units, which requires re-zoning to allow suitable locations, has put the city out of compliance with state housing laws.

Opponents have held the project up, even after Kitchell Development Co. reduced the number of units from 48 to 38.

The latest ding came September 30, an enforcement letter from the state's Department of Housing and Community Development. Without the zoning change, the city risked having its current housing program de-certified.

According to staff reports, the city has until April 2021 – the end of its 5th housing cycle – to re-zone the Watermark lots. The 2.3-acre parcel at the corner of Jimmy Durante Boulevard and San Dieguito Road is now used as a temporary parking lot during events at the fairgrounds.

To help meet its affordable housing needs, the city long ago committed to re-zoning the North Commercial land off Jimmy Durante Boulevard, but opponents have held it up, even after Kitchell Development Co. reduced the number of units from 48 to 38 in a proposed alternative.

The city had opted to use a specific plan process for the Watermark since having 20-25 dwelling units per acre was a category that didn't exist in their regulations, but many residents wanted to keep it that way. Rallying against the increased density, they launched a ballot measure in 2016 to give voters the right to approve or reject projects that exceed the number of homes allowed on a property.

Watermark site. "That's why we're facing by-right development," said council member Dwight Worden. "Seven years went by."

Despite Del Mar's housing shortfall, the controversy hasn't gone away. Last month, council members Dave Druker and Terry Gaasterland voted against the zoning change that would allow up to 20 dwelling units per acre in the North Commercial area.

It took the enforcement letter and a recommendation by the planning commission to revisit the issue to bring about an initial approval of the zoning change on October 7. But a community plan amendment, which the Watermark still requires, was left out.

In a reply to the enforcement letter, the city blamed the delay in completing the re-zoning mainly on the processing of a specific plan application for Watermark.

Lacking the specific plan amendment, the developer has turned to the by-right option by taking advantage of the city’s failure to accomplish the re-zone in the timeframe required under state code.

"That's why we're facing by-right development," said council member Dwight Worden at last night's meeting. "Seven years went by. The landowner didn't pursue it because the city had worked with them on the specific plan. Why did they abandon that and go by-right? Because of the blocked vote."

The streamlined by-right approach gets around discretionary review by the design review board or planning commission, as well as environmental review under the California Environmental Quality Act.

While developers won't have to do the rigorous environmental analysis, the city isn't off the hook and agreed to allocate $40,000 for environmental review.

According to the developers, the revised project will remove units previously slated for the hillside, protecting sensitive habitat. Since the project requires an amendment to the city’s local coastal program, it will need approval from the state coastal commission.

Under the Watermark's revised plan there will be 48 units rather than the 38 proposed earlier in an alternative. Of these, 10 units will be designated “low affordable," the rest market-rate. The numbers are consistent with the city’s inclusionary housing requirements and state density bonus law, the developer pointed out.

Phil Blair, a resident, vented his frustration with the city for ignoring the 2013 housing plan, and "activating the by-right option" as opposed to the specific plan which would have given the city more control of the process.

Council member Druker said he was "stunned that people would not believe a specific plan would pass."