Homes at schools? San Diego Unified OKs its first affordable housing development on district property

San Diego Unified School District officials took a key step forward this week with their plan to help ease the local housing crisis by letting developers build large rent-restricted apartment complexes on excess school property.

District trustees selected a developer to transform the former campus of Central Elementary in City Heights into 327 rent-restricted units — 57 for seniors and 270 for families and individuals.

This is the second time the district has allowed a developer to build housing on surplus land no longer needed for school facilities. But it’s the first where all the units will be rent-restricted.

It’s part of a nearly decade-old but accelerating real-estate strategy that aims both to generate much-needed revenue and to help keep students’ and school employees’ families alike from being priced out of the district.

And the project, which will include space for a farmer’s market and the Fern Street Circus performing arts group, could serve as a model for three additional housing projects the district is planning on surplus land in Linda Vista, Old Town and University Heights.

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District officials say they want the housing projects built on their land to become community focal points where a variety of neighborhood services are offered.

“It’s really exciting we’re moving in this direction,” said trustee Sharon Whitehurst-Payne. “Hopefully we can help the city with more housing.”

While the primary goal is helping ease the local housing shortage while generating revenue for the district, officials said another motive is creating more housing that’s affordable for teachers and other school workers.

Project renderings show space for a farmer’s market, seen at the center in the background, and classrooms for the district’s school for adults with disabilities.

(Courtesy of SDUSD)

To make sure those workers don’t earn too much to qualify for the new complex, the developer has reserved 55 units for renters making up to 80 percent of the area’s median income and 20 units for renters making up to 100 percent.

The rest of the units will be for renters making between 30 percent and 60 percent of the area’s median income, which is $119,500 for a two-person household in 2024.

Officials said district employees will be given priority for units in the new complex.

At the Central Elementary site, the 270 units for families and individuals will be built first. The second phase will include 57 units for seniors and classrooms for TRACE, the district’s school for adults with disabilities.

The developer, Affirmed Housing, has agreed to spend $4 million renovating old Central Elementary classrooms to make them ready for TRACE.

Affirmed has also agreed to pay the district $250,000 in annual rent for the 5.6-acre site. The district’s surplus-land policy, approved nearly 10 years ago, prioritizes maintaining ownership over selling to developers.

The site became available when Central Elementary was relocated last year to a $250 million campus it shares with Wilson Middle School on Orange Avenue. Renovating or expanding the old Central campus, which is less than a mile from Wilson, was not an option because of its location just east of state Route 15.

Exterior of Central Elementary School seen on August 24, 2023.

(Alejandro Tamayo/The San Diego Union-Tribune)

The other sites earmarked for housing will become available when the district follows through on a plan to open a new headquarters by 2026 on an 8-acre site in Kearny Mesa it bought four years ago.

The new headquarters would make surplus three sites that now house administrative functions. They are the district’s current University Heights headquarters, the Ballard site in Old Town and the Revere site in Linda Vista.

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While district officials say about 200 more acres of their 2,300 acres of land could be called surplus, much of it is either in canyons or in landlocked locations where it would be tough to build housing.

District officials said they expect to spend three to six months negotiating details with Affirmed on the new partnership. That will be followed by an environmental analysis, with a final pact likely presented to trustees after that analysis is complete in 2025.

Affirmed was among three developers that submitted proposals. Its financing plan calls for state and federal tax credits and a $5 million contribution from the city.

Because City Heights and nearby neighborhoods have many families, the 270-unit first phase of the project will include 68 three-bedroom units and 48 four-bedroom units.

The second phase — the 57 units for seniors — will include only studios and one-bedroom apartments. The project will have 440 total parking spaces.

The senior project will cost an estimated $32 million, or $565,000 per unit. The project for families and individuals will cost an estimated $166 million, or $615,000 per unit.

Amenities planned for the project include an on-site bicycle repair shop and a space for a child care center.