A long-delayed affordable housing project in downtown San Luis Obispo is one step closer to becoming reality after a judge rejected a legal challenge that had stalled the development for nearly two years.
The project, known as Waterman Village, would bring 20 tiny homes for low-income workers and seniors to a city-owned property on Dana Street. Plans also include rehabilitating the site’s historic adobe building to serve as a community space and creating a public neighborhood park.
Anne Wyatt is the executive director of Smart Share Housing Solutions, the nonprofit partnering with the City of San Luis Obispo on the development.
She said monthly rents are currently expected to range from about $1,000 to $1,300.
“We hope that we can operate this for a much lower cost and help enhance wellbeing and health, and a sense of belonging, for people that are struggling to make it here in San Luis Obispo,” Wyatt said.
The project has been in the works since 2020, but progress was halted by a lawsuit claiming a 1989 deed from the property’s original donor restricted the site to park use.
On Sept. 29, a San Luis Obispo County Superior Court judge rejected that argument, clearing a major legal hurdle and allowing the project to move forward.
Despite the ruling, work remains before construction can begin.
“We still have some funding to raise,” Wyatt said.
According to Wyatt, Smart Share Housing Solutions plans to seek funding through a mix of sources, including private donors and support from the city.
Some nearby residents support the effort to address San Luis Obispo’s housing shortage but have concerns about how the development could affect the neighborhood.
“I think it’s really, really important to have affordable housing,” said Connie McNoble, who lives near the proposed site.
However, McNoble said she worries about parking.
“I do worry about the parking because I don’t know where they’re going to park,” she said.
Current plans include only three parking spaces. Wyatt said the development is intentionally designed around car-free living, noting many of Smart Share’s senior residents either do not drive or cannot afford to own a vehicle.
The proposal also includes the removal of several trees that need to be removed to meet fire safety requirements.
Wyatt said city regulations require replacement plantings at a two-to-one ratio and that project leaders are working to preserve the property’s front tree canopy to continue providing shade for the planned public park.
If funding and approvals continue to move forward, Wyatt said construction could begin as early as next year, with residents potentially moving into the homes by 2029.