By Lou Hirsh | Costar

San Diego’s passage of a significant overhaul to a community plan for its central Mission Valley neighborhood clears the way for the addition of 28,000 residential units and 7 million square feet of commercial space by 2050, the latest California city seeking development solutions in a state with the worst housing shortage.

Approved by the San Diego City Council in a 9-0 vote, the Mission Valley plan is the first update in more than three decades to the blueprint for development for the 2,400-acre neighborhood in the geographic heart of San Diego, which has long been a high-demand hub for stores, apartments, hotels and offices.

California is facing a housing shortfall of as many as 4 million homes, which has contributed to creating the largest population of people without a place to live in the country, according to state and federal figures. San Diego is among a number of West Coast cities looking toward adding more density to accommodate an existing and growing population.

The plan calls for revised zoning that allows the creation of four self-contained “urban villages” that are designed to have improved pedestrian and bicycle access to several existing stations of the light-rail San Diego Trolley as the city looks to better match jobs with demand for housing and keep cars off notoriously congested roadways.

A centerpiece of the plan are long-awaited new parks and recreational spaces along the San Diego River, which spans much of Mission Valley but has never been incorporated into completed development projects.

“We see the San Diego River as an opportunity to really redefine San Diego,” said Nancy Graham, senior planner with the city of San Diego who spearheaded community planning for the update during the past five years. She notes the river could become a significant community draw for Mission Valley locals and other city residents and visitors. It is already being integrated into several mixed-use projects already in the works.

San Diego planners and developers said the newly approved community zoning offers a game plan going forward to bring the Mission Valley neighborhood needed affordable housing, and match the residential base with the jobs base while also helping to keep cars off roads. City officials estimate that out of a neighborhood population of 22,000 there are just 600 people who both live and work in Mission Valley.

By 2050, the city expects the planned 28,000 new residential units to add about 50,000 to the Mission Valley population, and one aim is to have as many of those people as possible either working in Mission Valley or commuting to other neighborhoods using public transit.

Mission Valley is one of San Diego’s most attractive areas for developers and investors, thanks largely to the five major freeways that pass through it and an expanding employment base. Two of the San Diego region’s largest retail malls, Westfield Mission Valley and Simon Property Group’s Fashion Valley, are located within a mile of each other in this neighborhood.

Compared to other San Diego neighborhoods, “Mission Valley has more developable land for high-density projects and infill sites along the I-8 freeway, making it one of the most active submarkets for builders outside of Downtown,” reads a CoStar Market Analytics report. “Mission Valley has received steady interest and construction from developers this cycle, and several projects fill the pipeline.”

The new community plan is meant to help the city thoughtfully integrate new commercial and residential elements over the next three decades, Graham told City Council members.

San Diego’s Mission Valley planners cite several existing U.S. “aspirational places” that serve as potential guides to future integration of urban mixed-use elements, including Americana at Brand in Glendale, California, a retail center with a centralized park that serves as a community hub developed by Rick Caruso, who is also behind Los Angeles’ successful The Grove shopping center.

Planners also point to Tysons Corner in Northern Virginia, a growing business hub served by several existing rail lines connecting it to the Washington, D.C. area; Houston’s Buffalo Bayou area, which includes a 160-acre urban green space within a river plain; and The Rise in Vancouver, British Columbia, a mixed-use development with live-work residential units built above retail spaces and configured around community gathering spaces including a vegetable garden.

Booming Construction

Several new developments are under construction or in early planning on the western edge of Mission Valley, north of Interstate 8. The largest is developer Hines’ planned 200-acre redevelopment of the current Riverwalk golf course.

Eric Hepfer, Hines’ San Diego director overseeing developments and acquisitions, told CoStar News that this is the Houston-based developer’s largest new mixed-use project on the West Coast. The project is designed with 4,300 residential units along with 1 million square feet of offices and 150,000 square feet of retail. The residences are expected to be mostly apartments with about 400 affordable units, but some for-sale homes are expected to be in the mix. The developer is looking to break ground in late 2020 on the plans that could play out over the next decade.

Hepfer said the Riverwalk project is similar in scope to Hines’ planned 66-acre redevelopment of the Walter Reed Army Medical Center site in Washington, D.C., which is expected to include 3.1 million square feet of new construction and like Mission Valley will involve integrating multiple commercial and civic elements in a major urban hub.

A big priority for Hines and neighboring developers is expected to be integrating their developments with several existing stations of the light-rail San Diego Trolley, as the city takes steps to make access to those stops safer for pedestrians via new public walkways.

Mission Valley is already connected with downtown San Diego via the trolley, and Hepfer noted upcoming trolley extensions are expected to link it to other job hubs including University Town Center.

“The way that much of that area was developed in the 1960s and ‘70s, transit was almost an afterthought,” Hepfer said of Mission Valley. “The stations are basically in the back of commercial properties and they sit at higher elevations, almost like they’re not really part of the developments.”

Similarly, commercial development over the decades has pinched off rather than capitalized on the San Diego River as a community amenity. City officials said the new community plan should allow separate new developments to be better integrated with the trolley stations and the river.

Next door to the Hines project site, developer Holland Partners has begun work on an 840-unit residential project using 10 acres it acquired last year from a group that includes developer Lowe Enterprises. Lowe and its partners are at work on a significant mixed-use renovation of the 688-room Town & Country resort, scheduled to include a new three-acre public park next to the San Diego River.

Separately, a 130-acre parcel on the northeastern end of Mission Valley is being master-planned by San Diego State University, which is negotiating to purchase the city-owned land currently housing the stadium, vacated by the National Football League’s relocated Chargers, where the university is looking to build a new mixed-use western campus .

This article originally appeared in Costar.