Oceanside 2023: The Year the Council Capped Downtown and the Market Noticed

Oceanside's 2023 was defined by a structural contradiction: the city adopted its most consequential anti-housing zoning decision in years — an 86 du/acre downtown density cap — while simultaneously approving a genuinely pro-housing Coast Highway corridor overlay and finally certifying its Housing Element after four rounds of HCD rejection. Housing-related discretionary filings dropped 33% year-over-year, building permits fell 45%, and completions collapsed 53% — the sharpest contraction in the development pipeline during Oceanside's modern housing crisis.

Zoning and Density: Two Corridors, Two Directions

Downtown density cap (86 du/ac). The year's highest-impact decision. Staff recommended 100 du/acre with an enhanced density bonus schedule reaching 200 du/acre. Council rejected both the staff recommendation and the enhanced bonus, adopting instead the most restrictive option on the table: 86 du/acre with no enhanced density bonus. Introduction passed 3-2 on October 18 (Joyce, Keim, Robinson yes; Sanchez and Weiss dissenting). Adoption passed 4-1 on November 1 — Weiss flipped to yes, leaving Sanchez as sole dissenter. Stripping the enhanced bonus eliminated the primary incentive for developers to include affordable units above the baseline inclusionary requirement. Staff had estimated approximately 2,300 units already existed downtown against the prior 5,500-unit cap, but a 2019 Council resolution (19-R0562-1) exempting mixed-use projects from density limits had effectively neutralized that cap for the project type most likely downtown. The new 86 du/acre cap replaced that permissive framework with a hard ceiling.

Coast Highway Incentive District (CHID). Approved 4-1, Sanchez dissenting. Form-based code overlay along Coast Highway allowing base density of 43 du/acre with incentive density to 63 du/acre, height up to 65 feet/6 stories in nodal areas, and sharply reduced parking — 1 space per 1,500 square feet of habitable area, zero parking for affordable, senior, and SRO units. Standalone residential permitted by right in avenue subareas. The California Coastal Commission approved the LCP amendment with 13 modifications protecting visitor-serving uses, including 1:1 replacement of lower-cost overnight accommodations. Three prior submission attempts had failed over visitor-serving language disputes.

Inclusionary housing. A protracted fight. Joyce and Sanchez proposed doubling the requirement from 10% to 20% in June; Weiss moved to delay to an August workshop, Robinson seconded, passing 3-2. The August workshop produced a 5-0 vote to raise to 15% for multifamily (keeping 10% for single-family), with an economic study to evaluate 20-30%. But in December, the 15% citywide motion failed 2-3 (Keim, Robinson, Weiss voting no). An alternative passed 5-0: raise the trigger threshold from 3 to 10 units, keep 10% citywide except 20% in Smart and Sustainable Corridors. Joyce then reversed course on December 20, moving 15% citywide — passing 4-1, Keim sole dissent. The final framework: 15% citywide for projects of 10+ units.

Housing Element certification. Council unanimously re-adopted the 2021-2029 Housing Element in September after HCD deemed it substantially compliant on August 18 — four rounds of review. City Attorney Borrego warned of builder's remedy exposure without certification.

Development Pipeline: The Market Responded

The numbers tell a clear story of declining developer confidence:

• Housing-related discretionary filings: 46, down 33% from 69 in 2022
• Housing building permits: 226, down 45% from 413
• Completions: 143, down 53% from 303

The geographic distribution is more revealing than the totals. APR filing data geocoded against the D-District zoning boundary shows downtown filings held nearly flat (1,111 to 1,092 units, -2%), while rest-of-city filings collapsed from 1,508 to 319 units — a 79% drop. Downtown accounted for 77% of all units filed in 2023, up from 42% in 2022. The downtown cap was adopted in October-November, so its suppressive effect on filings will manifest primarily in 2024; the 2023 downtown pipeline was largely vested under prior rules or protected by SB 330 preliminary applications.

Density bonus applications dominated housing filings: 10 of 46 housing-related discretionary applications were density bonus requests, and 60% of development applications in the prior two years used State Density Bonus Law. Developers are routing around local restrictions via state law — a rational response to a tightening local regulatory environment.

ADU production remained the steadiest segment: 150 of 226 housing permits were accessory dwelling units. But even ADU permits declined from prior-year levels. Multifamily permits were negligible — only 4 filed all year.

Tenant Protections

Reusable tenant screening reports approved 4-1, Weiss sole dissent. Included a $50,000 pilot for rental application fee assistance. Weiss's dissent against the lowest-cost pro-tenant measure available is notable.

Short-term rental ban outside the coastal zone approved 5-0, affecting approximately 363 of 1,112 registered STRs. STR permits had grown 84% from 603 to 1,230 between 2021 and 2023.

Renter protections study directed, 4-1, Keim dissenting.

State Mandate Compliance: Behind and Resisting

RHNA progress was dire. Staff disclosed only 7% of lower-income RHNA met — 62 of 1,986 units — two years into the eight-year cycle. At the reported production rate, staff estimated 130 years to meet very-low-income targets. Overall progress stood at 25% (1,347 of 5,443), buoyed by above-moderate production already meeting its target.

Against this backdrop, Keim and Weiss co-sponsored a "local control" letter to the Governor pushing back on density bonus law and state housing mandates. All council members signed except Joyce. Keim separately led a successful 14-4 motion at SANDAG to permanently kill the road user charge and bar board members from supporting per-mile fee legislation — removing a key transit funding mechanism that supports the transit-oriented density SANDAG's Regional Plan depends on.

258 at-risk affordable units face expiring deed restrictions by 2028. Staff recommended replacement ($103M) over preservation ($211M).

Housing Projects Voted On

Project	Units	Outcome	Vote	State Law Shield	Notes
Modera Melrose (Melrose Dr/Bobier Dr)	323 (33 VLI)	Approved	5-0	Density bonus	SAFER CEQA appeal denied
Sunsets Mixed-Use (Horne St/Pier View Way)	180 (18 low-income)	Approved	4-1 (Sanchez no)	SB 330 vesting, density bonus	Third iteration (76→118→180 units)
712 Seagaze (mixed-use)	115 (12 at 80% AMI)	Approved	—	Density bonus	Includes 64 hotel rooms
Loma Alta Terraces (Loma Alta Dr)	13 SFR (1 VLI)	Approved	5-0	Density bonus	9 base + 4 bonus lots
The Tremont	17 (1 VLI)	Approved	5-0	Density bonus	Appeal denied; affordability terms negotiated
1448 Avocado Road	19 SFR (1 VLI)	Approved	5-0	Density bonus	Appeal by resident denied
Pacifica (4991 Macario Dr)	164 townhomes	Approved	5-0	None — genuinely discretionary	In-lieu fee; OUSD bypassed Surplus Land Act
North River Farms	395 SFR lots	Approved	Consent	None	Final map on 176.6 acres

Every multifamily project approved in 2023 relied on state density bonus law. The Pacifica townhome project was the only genuinely discretionary housing approval of significant scale — and the developer paid in-lieu fees rather than building on-site affordable units. Unanimous project votes obscure the fact that most were legally compelled: density bonus law preempts local standards, and staff confirmed in multiple hearings that no written public health or safety standard was violated.

Affordable Housing Finance

• $6M+ NOFA issued using HOME, PLHA, and inclusionary funds plus 80 project-based vouchers, targeting homeless/at-risk seniors and veterans (approved 5-0, August)
• Inclusionary in-lieu fee fund: $10.7M, nearly depleted after the NOFA
• In-lieu fee: increased from $8.96 to $20/sq ft, phased over two years (DRA recommended $25-45)
• Impact fees: $68,000/unit single-family, $17,200-$25,200/unit multifamily
• Housing Choice Voucher program: $23M/year
• Greenbrier Village: 60-unit 100% affordable under construction (9% LIHTC, No Place Like Home, HOME)
• TBRA program: 178 participants, 81 vouchers issued, 9 homeless-to-housing transitions

Infrastructure

Sewer design-build package (Mesa Garrison Force Main, El Corazon Lift Station, Mission Ave Force Main) approved at $11.4M total, with EPA WIFIA loan covering 49%. Fire Station 8 planned for eastern growth areas — permanent 15,000-18,000 sq ft facility at 1286 Trestle St. CDBG sidewalk projects ($886K) in low-to-moderate income areas.

Council Member Vote Patterns on Structural Decisions

Structural votes — density caps, zoning overlays, inclusionary rates, tenant protections, state mandate resistance — reveal more than project votes, since most project approvals were legally compelled.

Joyce was the most consistently pro-housing member. Only council member to refuse the local control letter. Pushed for comprehensive city land inventory for affordable housing, proposed transit occupancy tax funding for affordable units, moved the 15% inclusionary increase, and publicly rebuked colleagues for opposing legally compliant projects: "it concerns me when we come up to a council meeting, and it's easy to say no with no direct adverse impact and be the hero pushing back when there's no legal reason to do that."

Sanchez occupied an unusual position — pro-affordability but selectively anti-project. Cast sole dissent against the Sunsets 180-unit project (objecting to 375 sq ft units as unlivable), sole dissent against CHID, yet also sole dissent against the downtown density cap adoption and aligned with Joyce on 15% inclusionary. A 1% vacancy rate and 7% lower-income RHNA attainment argue against opposing compliant projects on unit-size grounds.

Keim voted yes on individual projects while building the structural framework to restrict future ones. Co-authored the local control letter, killed the SANDAG road user charge, voted for the 86 du/acre downtown cap, and was sole dissent on 15% citywide inclusionary. Drew a firm line against ministerial multifamily in single-family neighborhoods: "I do not want a ministerial approval of multifamily or change" in those areas.

Weiss was the pivotal swing vote. Dissented against the downtown density cap at introduction (wanting a lower cap but with the enhanced bonus preserved), then flipped to yes at adoption. Co-authored the local control letter. Dissented against tenant screening. But moved to expand affordable unit requirements at the Tremont project and voted yes on 15% citywide inclusionary in December.

Robinson supported project approvals and most affordable spending but seconded the delay on inclusionary increases, opposed STR limits, and voted against 15% inclusionary in December before the final reversal.

The net structural record for 2023: one major upzoning (CHID) offset by one major downzoning (downtown density cap), an inclusionary increase that took three attempts to pass, a local control letter signed by four of five members, and a development pipeline contracting at double-digit rates. The market is filing 33% fewer housing projects and pulling 45% fewer permits than a year ago — and the downtown cap's suppressive effect has not yet materialized in the data.