San Diego City Council Approves Housing Complex at 101 Ash St

News Summary

The San Diego City Council has unanimously approved a 60-year lease for the 101 Ash St. building, intending to transform the uninhabitable tower into affordable housing. Aiming for low-income families, the project will offer 247 rent-restricted apartments, along with retail space and a childcare center, addressing the city’s affordable housing crisis. Critics have raised concerns about financial viability, but city officials remain optimistic about the project’s impact. Construction is anticipated to start in spring 2026.

San Diego – The San Diego City Council voted unanimously to approve a 60-year lease agreement for the 101 Ash St. building with developer 101 Ash Venture LP. This decision marks a significant step toward transforming the currently uninhabitable 21-story office tower into an affordable housing complex aimed at low-income families in the region.

The development team, comprising housing developers MRK Partners and Create Dev LLC, plans to create 247 rent-restricted apartments within the building. These apartments will be deed-restricted for households earning between 30% to 80% of the area median income, ensuring that the housing remains accessible to those who are most in need. The estimated cost of constructing each unit is just under $1.1 million.

In addition to the residential units, the project will include three unrestricted manager units, 25,000 square feet of retail space, and a 4,000-square-foot childcare center, significantly contributing to community resources. The anticipated total cost of the project is approximately $267.6 million, which will include efforts to secure federal tax credits to help offset the expenses.

The lease agreement is structured to provide conditions for advancing the project during a potential two-year escrow period. City Council members expressed a strong desire to relieve the financial burden associated with the building’s maintenance. The structure has a troubled history, particularly relating to asbestos contamination, which has left it in an uninhabitable state.

To date, the city has invested around $96.1 million into the building, not including additional legal costs or financing charges. Under the new lease, the city will lease the property for a nominal fee of $15,000 annually, with plans for gradual increases over time. Furthermore, San Diego will provide a seller’s note valued at $45.6 million at a 4% interest rate to assist the developers, although no direct cash contributions will be made by the city.

The approval allows developers to target approximately $87.8 million in low-income housing tax credits, along with $36.1 million in historic property tax credits, despite the building lacking a historic designation. However, some critics have raised concerns about the financial viability of the project, especially given the high per-unit construction cost when compared to nearby luxury housing options.

Legal complications may arise surrounding alleged conflicts of interest between the developers and the city with regard to previous dealings related to the building. Nevertheless, city officials are optimistic that the development can address San Diego’s ongoing affordable housing crisis and meet the community’s pressing needs.

Construction for the new residential complex is expected to commence in spring 2026, contingent on the successful fulfillment of all financing conditions. Furthermore, the proposal includes plans for 240 on-site parking spaces and a commitment to enhance childcare accessibility through a rent-free facility, providing an additional benefit to families in the area.

During the two-year escrow period, the city will remain responsible for the annual maintenance costs estimated at approximately $2.55 million. Once the escrow period concludes, those maintenance responsibilities will transition to the developers, freeing the city from further financial obligations regarding the building.

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Additional Resources

• San Diego Union Tribune: Lease of 101 Ash St
• Wikipedia: Affordable housing
• Times of San Diego: Affordable Housing Foundation
• Google Search: San Diego Affordable Housing
• NBC San Diego: City Council Approves 101 Ash St Housing
• Google Scholar: Affordable Housing San Diego
• CBS 8: San Diego Moves Forward with Lease
• Encyclopedia Britannica: Affordable Housing