March 2003

Planning

Copyright by American Planning Association

2003 HUD Secretary's Opportunity and Empowerment Award

Paseo del Oro, San Marcos, California

By James H. Andrews

The project is "hugely successful," says a San Marcos planner. The cost of city services is down, and the crime rate has fallen. A waiting list bears the names of hundreds of families who want to move to Paseo del Oro.

The new mixed-income housing and commercial development in San Marcos, California, replaces a dilapidated shopping center in a neighborhood that needed retail services and a city that needs housing for families of modest income.

Paseo del Oro receives the HUD Secretary's Opportunity and Empowerment Award for 2003. The APA awards jury, augmented by representatives of the U.S. Department of Housing and Urban Development, praised the project for the mixed uses, good design, creative use of HUD funds, and the linkage of housing to multiple goals.

Paseo del Oro, covering about six acres, contains 23,000 square feet of retail space and 120 apartments, 22 rented at market rates, 98 affordable.

The one-, two-, and three-bedroom affordable units are available to households earning 30, 45, and 50 percent of the median income for San Diego County, which is $60,100 for a family of four. Affordable rents range from $307 to $732.

The development's focal point is a pedestrian paseo between the stores, townhouses, and apartment buildings. Most customers are pedestrians, but there is parking behind the buildings.

All commercial space was leased before the opening last summer. Seven of the previous 11 commercial tenants remain, aided by below-market rates for the upgraded spaces. A video store, florist, 99-cent store, grocery, check cashing business, and a clothing and shoe store remain, as does the expanded La-Fe Tortilleria, a tortilla factory and traditional Latino bakery. New tenants are a beauty salon and an ice cream store.

The area should have been downtown San Marcos, says Paul Malone, a planner who is now assistant city manager. But State Route 78 split the area in two, and the city, growing from 3,000 to 65,000 people in 40 years, developed in other directions.

Paseo del Oro is in Richmar, the Mission Road Revitalization Area, home of almost 5,000 people. In 2000, the poverty rate was 12.5 percent, well above the city's 7.8 percent. Median family income was $40,800 compared to $193,000 for the city as a whole. The neighborhood population, predominantly Hispanic, is 82 percent minorities, and 38 percent foreign-born.

The city redevelopment agency, governed by the city council, started directing housing funds to Richmar several years ago. The new and rehabilitated housing, almost all rented at affordable rates, was a "smashing success," Malone says, but the old strip commercial center was severely blighted and run down, plagued by criminal and drug activity.

Location, location

Yet the strip center had assets: It fronted on a major arterial highway, light rail stations would open within a quarter mile in each direction in 2004, and the area needed services. "We saw an opportunity," Malone says.

The redevelopment authority's philosophy, Malone says, is that government alone does not develop housing. This project was "incredibly complicated, but we worked with some first-class people."

The key players were the Southern California Housing Development Corporation, a nonprofit affordable housing developer and manager, and the Related Companies of California, a for-profit developer based in Irvine. This is SoCal Housing's third affordable housing community in Richmar. One of them, Sierra Vista, was renovated and opened at the same time as Paseo del Oro.

Only one company saw a market for commercial space in Richmar, but with tax credit financing, retail was almost a bonus, Malone says.

Well over half the financing — $13 million — came from a nine percent federal low-income housing tax credit allocation by San Diego County. The mixed-income housing component gave the city extra points in the tax credit application, Malone said.

The city's general plan and zoning map called for commercial use on the whole block, but the neighborhood could not support that, Malone says. The city created a specific plan area, a device used in other parts of the city. This allowed a performance zoning approach, with design and marketing becoming crucial parts of the strategy. The project was designed to fit the site.

For information: Gloria Chavez, Southern California Housing Development Corporation, 909-483-2444, ext. 136 or gchavez@schdc.org; Paul Malone at pmalone@ci.san-marcos.ca.us or 760-744-1050, ext. 3115.

James Andrews is associate editor of Planning.