In 3 years since San Diego's Blue Line extension, why hasn’t more housing been developed along it?

By David Garrick | San Diego Union-Tribune (TNS)

SAN DIEGO — Ridership continues to rise on the 3-year-old trolley line extension connecting Old Town and UC San Diego, but virtually none of the high-rise housing expected to sprout up along the line has been built — or even proposed.

Developers haven’t shown much interest in special zoning rules the City Council created to encourage high-rises and dense urban villages along the line in Linda Vista, Clairemont and eastern Pacific Beach.

Even though 2023 was a banner year for new housing in San Diego, with permits for nearly 9,700 new units issued — the most since 2005 — only one apartment complex was approved near that trolley line extension, and it has just four units.

That’s a problem, because the model for the region’s modern transit lines isn’t transporting people across vast, empty spaces. It’s having a line spur growth along its route — especially housing growth, because new residents along the line are likely to become riders.

City and transit officials are blaming the lack of development along the new trolley line, which is called the Blue Line extension, on high interest rates and rising costs for construction materials and labor.

“Several factors, including high interest rates and rising material costs, are currently contributing to delays in the building process for multifamily developments,” said Heidi Vonblum, the city’s planning director. “The city is committed to the development of homes for people of all incomes near the Blue Line Extension.”

The Building Industry Association said the problem might go beyond the hurdles listed by the city and the Metropolitan Transit System, which owns and operates the entire trolley system.

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People who own property near a new trolley line often exaggerate how much the new line has increased the value of their property, making it difficult for developers to secure land at a fair price, said Lori Holt Pfeiler, chief executive of the BIA’s local chapter.

Pfeiler said another problem could be the city’s aggressive campaign in recent years to encourage development near transit with a wide variety of density bonuses and other incentives.

“I think the development community is still adjusting to all of this,” said Pfeiler, adding that high interest rates and other costs have also played a role. “There’s a moment of hesitation.”

Developers might also be more focused on new opportunities near the beach in San Diego under a new state density bonus law that restricts how cities can enforce local height limits, said Marcella Bothwell, chair of the Pacific Beach Planning Group.

Two developers have already submitted controversial proposals under the law, one for a 60-foot building on Garnet Avenue and one for a 239-foot tower on Turquoise Street.

But the special zoning rules along the trolley line extension have been in place a long time. The City Council approved them more than two years before the extended line began running in November 2021.

In the Linda Vista area, the rules lift the building height limit for housing projects from 45 feet to 65 feet near the existing Linda Vista/Morena trolley station and up to 100 feet near the new Tecolote Road station.

In northeastern Pacific Beach, the 30-foot coastal height limit remains in place — but the rules allow projects with significantly more units per acre.

In Linda Vista and nearby areas, the zoning changes raised the number of homes allowed in the area from 1,386 to 7,016. That’s about five times what previous zoning allowed, and seven times the roughly 1,000 homes already there.

In northeastern Pacific Beach, the zoning changes raised the number of homes allowed in the area near the Balboa Avenue station from 1,221 to 4,729 — nearly quadruple what previous zoning allowed, and six times the 800 homes already there.

The changes were unsuccessfully challenged in court by neighborhood groups like Morena United, Clairemont Cares and Friends of Rose Creek.

Those groups predicted developers might struggle to fill any housing built, contending that the new zoning rules allow upscale housing near the trolley that will only be affordable to wealthy people who don’t use transit. It’s possible developers have realized this problem and chosen not to build.

Many members of the opposition groups had been part of an earlier opposition group called Raise the Balloon, which was focused partly on trolley line high-rises blocking ocean and bay views from Clairemont.

Felicity Senoski, chair of the Linda Vista Planning Group, is a longtime opponent of high-rises along the trolley line.

“We want reasonable growth,” she said. “The numbers suggested by the city are just far too dense.”

Senoski said the lack of development on the trolley line so far has been welcome.

“There is a sigh of relief in the community,” she said. “The economic conditions are just not right to dig into these massive builds.”

But Senoski said there’s no escaping the future, adding that she occasionally gets calls from developers wanting to gauge whether the planning group would support a potential project.

“The plans are still in place, so we have to live with that,” Senoski said.

Another possibility for development is housing and commercial projects built directly at the new trolley stations, but MTS says there are many hurdles.

UCSD is building dorms and other buildings at the trolley stations on campus and nearby, and UTC mall geared its recent redevelopment around the new trolley line.

But development at the Balboa Avenue, Clairemont Drive and Tecolote Road stations will be more challenging, said MTS spokesperson Hector Zermeno.

At Balboa and Tecolote, a major problem is that a developer would need to replace parking spaces if housing were built in the most likely place: the large parking lots at the two stations.

The federal grant MTS got for the $2 billion trolley line extension and the environmental analysis of the new line both require the parking to remain in place many years into the future, Zermeno said.

“While redevelopment of current park-and-ride lots is not viable at both locations in the short term, there is a willingness and openness by MTS to redeveloping these two sites into mixed-use transit-oriented developments at some point in the future,” he said.

Prospects are a bit better at the Clairemont station, including a possible partnership with a developer.

“MTS is working with SANDAG and the Zephyr team to facilitate construction of a housing development adjacent to the Clairemont Station,” Zermeno said.

The development would include 150 transit parking spaces in a garage that would be constructed as part of the project, Zermeno said. No further details were available.

One reason for optimism about eventual development along the new line is steady growth in trolley ridership.

Ridership on the Blue Line as a whole climbed from 21.9 million in fiscal year 2023 to 24.4 million in fiscal 2024 — the only two full fiscal years the new extended line has been operational.

And ridership numbers for fiscal 2025, which began July 1, look even stronger. For example, ridership was 2.2 million in July, up from 1.9 million in July 2023 and 1.7 million in July 2022.

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