A Plea for Councilmember Campbell to Limit Loss of Affordable Housing If Mariner’s Cove in Ocean Beach Is Demolished for New Development

By Joni Halpern

A plan to demolish the 500-unit Mariner’s Cove apartment complex located at 4392 W. Point Loma Boulevard in eastern Ocean Beach will come before the San Diego Housing Authority (SDHA) sometime in January 2024.

Acting as the Housing Authority, members of the San Diego City Council will consider a plan to allow the developers to demolish the existing 500 units and replace them with 772 new units.  Within this proposed amendment to the Mariner’s Cove lease is an opportunity for Councilmember Jennifer Campbell to exercise the power she possesses to speak out against the loss of low- and moderate-income units.

The owners of the apartment development at Mariner’s Cove are Lincoln Mariners Associates, Ltd., which is owned by AIMCO Properties headquartered in Colorado.  The San Diego Housing Authority and therefore, the City, owns the land.

However, AIMCO has proposed lease amendments that will reduce the percentage of low-income and moderate-income housing that has existed at Mariner’s Cove since the land was first leased to developers back in 1982.

There were terms in the original lease, and in the “Second Amended and Restated Lease” (SARL) agreed to by the city and the developers in 2015, that promised 20% of total units on the property would be restricted to households with incomes at or below 80% of the Area Median Income (AMI).  These units were to be administered under the regulations governing the Section 8 Project-Based subsidy program operated by the United States Dept. of Housing and Urban Development.  These terms are still in effect.

Pursuant to those terms, Section 8 vouchers are attached to 100 of the 500 existing units. If a Section 8 tenant moves or their lease is terminated, the voucher stays with the unit.

The original lease and the SARL also required that 40%, or 200, of the 500 units be restricted to households with incomes at or below 120% AMI.  These were not Section 8 apartments, but they were considered affordable for moderate-income households.

Just to clarify the income levels we are talking about, the Area Median Income (AMI) for San Diego for a family of four is as follows:

• 30% AMI = $41,350 = “extremely low-income”
• 50% AMI = $68,900 = “very low-income”
• 60% AMI = $82,680
• 80% AMI = 110,250 = “low-income”
• Median Income = $116,800 = AMI in San Diego for 4-person household
• 120% AMI = $140,150

All of the households occupying Section 8 voucher-eligible units in Mariner’s Cove have incomes at or below 80% AMI, the ceiling for Section 8 eligibility, but many households in Section 8 units have well below that, with families living on incomes from 30% to 50% AMI.

It is important to understand that the existing lease (SARL) governing Mariner’s Cove development does not just make a casual promise of maintaining 20% of total units on the property for low-income households and 40% of total units for moderate-income households.  In the SARL, these promises constitute “consideration,” which means they are essential terms that must be met in order for the owners of the complex to be entitled to use the city-owned property for their profit-making apartment development.

But now, AIMCO is asking the City to accept a Third Amended and Restated Lease (TARL) that reduces the promised percentage of low-income apartments from 20% of total units to just under 13%.  AIMCO also seeks to reduce the number of moderate-income units from 40% to 26.6% of total units.  Meanwhile, market-rate units will number 472, an increase of 272 units or 61.1%.

If the proportional percentages promised in the existing lease (the SARL) were properly carried into the new lease sought by AIMCO, Mariner’s Cove would gain about 54 low-income apartment units in the new development.  Moderate-income tenants would gain about 108 units.

Instead, both the San Diego Housing Commission and the developers are content to abandon the terms promised in the existing lease, claiming it is enough to retain the existing 100 low-income units and 200 moderate-income units, instead of retaining the promised percentage of total units required under the existing lease.

AIMCO has made much of two proposals they tout as adequate alternatives for low-income tenants.  First, they propose that six units be developed offsite in an unknown location; these would be reserved for tenants with household incomes up to 60% AMI.

AIMCO also promises to negotiate with owners of adjacent Barnes Tennis Center, located at 4480 W. Point Loma Blvd.  AIMCO says they are working hard to convince the tennis center to allow the development of apartment units on the premises, with about 10 units devoted to “affordable housing,” with no AMI threshold as yet designated for these units.

As if that is not worry enough for all the hard-working low- and moderate-income households now residing in Mariner’s Cove, AIMCO proposes a plan that seems designed to allocate various-sized units (studios, one-, two-, and three-bedroom units) to households within particular income categories.  Only six units are allocated to households at or below 60% AMI:  1 studio, 1 one-bedroom, 2 two-bedrooms, and 1 three-bedroom.  And then, of course, there are an additional six units offsite somewhere in the Great Beyond.

For tenants at 80% AMI, there are 24 one-bedroom units, while there are 92 for those at or below 120% AMI, and 166 for market-rate tenants at a rental rate not yet identified.  There are 68 two-bedroom units for 80% AMI households, 106 for 120% AMI, and 185 for market-rate tenants, once again without identifying a rental rate.  There are 8 three-bedroom units for 80% AMI, 2 for 120% AMI, and 17 for market-rate.

In a filing with the Securities and Exchange Commission in 2016, AIMCO Properties explained its investment goals, namely, “to provide predictable and attractive returns to our equity holders.”  Fair enough.  They are, after all, profit-making investors.  Their plan to achieve this fundamental goal is to “operate our portfolio of desirable apartment homes with valued amenities, with a high level of focus on customer selection and customer satisfaction.” That’s the part that sounds as if low-income tenants might not be regarded as the “select” customers.

True, AIMCO needs the financial incentives from government that are only available by meeting the terms that help government meet its goals, one of which is the ever-growing importance of providing housing for low- and moderate-income tenants.  But in this case, abandoning existing promises that will reduce low- and moderate-income units from the percentage promised in the existing lease will not further the City’s goals.

That is why it is so important for the City Council, and for the City Councilmember of District 2 in which Mariner’s Cove is situated, to require developers to meet promised proportional percentages for the number of units acceptable in any new lease – 20% of total units on the property for low-income tenants, and 40% of total units on the property for moderate-income tenants.

Furthermore, Councilmember Campbell and her colleagues should insist that units of various sizes be allocated fairly.  It is not fair to use AMI income thresholds to limit low-income households to such a meager number of units that they will almost all be relegated to housing elsewhere than Mariner’s Cove, thrown into the market-rate housing chaos that is now yielding more unhoused persons than the City can handle.

Of course, the developers have promised unspecified relocation assistance to all qualified tenants who are unable to obtain housing in Mariner’s Cove.  But imagine what that looks like once you count moving expenses, utility and other hook-up fees, and the massive amounts that now must go toward first month’s rent and security deposits in market-rate housing anywhere in the city.  In a very short time, these ousted tenants will be looking for temporary shelter in all the places Councilmember Campbell now brags about having supported for the unhoused.