A debate is raging in Santa Barbara over whether to require developers to include affordable housing when redeveloping commercial buildings.

The city’s three-member Ordinance Committee voted 2-1 on Tuesday to send a contentious ordinance to the City Council that would require developers to include below-market-rate units if they “adaptively” reuse those buildings.

Committee members Kristen Sneddon and Oscar Gutierrez voted in support of it, and committee member Mike Jordan opposed it. The full council is expected to vote on the topic in September.

Developers say redeveloping commercial buildings to add housing on the second story is expensive because of the site constraints, especially downtown, and that including affordable units is a deal-breaker.

“Making these projects pencil is very difficult,” said Ben Romo, who has worked with the Yardi brothers to redevelop commercial buildings downtown. “Imposing the city’s inclusionary ordinance in adaptive reuse requirements will kill most projects downtown.”

The changes would allow adaptive reuse projects anywhere in the city that allows apartment residential use, except the coastal zone, as long as the building is at least 5 years old. Other developer incentives would include allowing unlimited residential density and reduce or eliminate requirements for open yard, parking and setbacks.

The biggest hangup, however, is over the city’s 10% inclusionary housing ordinance. Developers must set aside 10% of the units at below-market rates.

“Converting underutilized commercial buildings into housing is a critical strategy for our downtown, where space is limited and vacancy remains a challenge,” said Robin Elander, executive director of the Downtown Business Improvement District.

Elander also said the group opposes including inclusionary housing requirements.

“These projects are already financially complex, and additional mandates will likely deter investment and result in no housing at all,” Elander said.

Architect Cass Ensberg, however, disagreed and said the affordable requirement should remain.

Ensberg said that of the 8,001 units required in this cycle of the Regional Housing Needs Assessment, 4,969, or 62.1%, is the target for affordable.

“We are challenged to get to affordable levels,” Ensberg said.

She said that from 2018 to 2024, affordable units built totaled less than 4%.

“Until such time that people have living wages and subsidies are no longer required, and to successfully meet our goals and balance between increased density for housing and preservation of community scale, I believe the adaptive reuse should include the inclusionary,” Ensberg said.

She said the city also should continue to find funding sources for affordable housing.

Romo cautioned the city from doing a study to determine whether inclusionary housing is financially possible for commercial units.

“We need housing downtown now, not years from now,” Romo said.

Sneddon said she opposed exempting inclusionary housing.

“I think this ordinance addresses critical housing needs,” she said.

She added that any changes to the ordinance should come later — after a study.

“This is just a home run,” Sneddon said. “I am really grateful it was brought forward.”