Plan to Expand Affordable Housing Opportunities in San Diego

By Barbara Bry

San Diego must do a better job of providing housing for its residents and families. With only a small share of potential buyers able to afford the median home price of nearly $500,000, the American dream of owning a home is simply out of reach for too many San Diego residents. The rental market does not provide a cost effective alternative at this time – over half of renters are spending more than a third of their income on housing.

Meanwhile, the local population continues to grow, mostly from current residents expanding their families. We need to find a way for our children and grandchildren to stay here in order to have a robust community. The problem is that housing is unaffordable for young people coming out of school and forming new households, for families needing larger homes, and for people moving into the area from less expensive markets.

A 2010 report by the San Diego Association of Governments estimated that we will need an additional 162,000 housing units by 2020 – at least half of them in the City of San Diego, with a majority of them affordable to low and moderate income households. Most of the new housing needs to consist of attached units, i.e., apartments and condominiums, in order to be affordable. Currently, we are producing just over half the needed units, and only about 20% of them are priced in the affordable range. Regionally, local governments, including the City of San Diego, have planned for substantial amounts of housing to address those needs, but the locations are not all appropriate and regulatory and economic barriers stand in the way.

The relatively small number of housing units produced through public programs or operated by public agencies does not come close to addressing the demand. We need an accountability system to ensure that our housing development industry, public and private, is capable of providing a significantly larger number of housing options. In large part, this means building move-up housing for those who can afford it, thereby freeing up lower-cost housing for those most in need.

New housing production lags far behind demand, and rental vacancy rates remain painfully low. This impacts the future of San Diego. Businesses, universities and government agencies find it difficult to recruit, as quality employees prefer to stay in areas with more affordable housing. Similarly, new college graduates are moving away to find jobs in less expensive housing markets. In order to work in San Diego, many new households are forced to endure long commutes from southern Riverside County. If we do not meet the workforce housing goals of the General Plan, we cannot sustain or grow our local economy.

Many proposals have been made to improve housing supply and affordability, but they typically only address part of the problem and are not enough to make housing in San Diego affordable and accessible for working families. I am proposing a more comprehensive set of policies and actions to address this housing crisis and provide greater housing opportunities for the benefit of all San Diegans.

1.  More Efficient Use of Land and Public Transportation

The era of urban sprawl is over. Consistent with the guiding principles of the City’s General Plan, the new Climate Action Plan foresees half our local population switching to alternative transportation within the next twenty years. Additionally, land is one of the most expensive components of housing, largely because we have consumed most of the developable land. Since we cannot continue to spread outward, we must identify areas capable of absorbing more housing, and work with communities both to build more densely and to create the walkable neighborhoods favored by the majority of young housing consumers. This will require more effective implementation of existing city plans for pedestrian and cycling improvements, referred to as complete streets. We also should identify surplus public land suitable for development, which can be leased or sold for construction of affordable housing.

These actions will have to be in concert with community plans to ensure neighborhoods are engaged in this process, since an increase in density is not always a good thing. For instance, building the original One Paseo project in Carmel Valley made no sense, because there is no public transit and none planned for many years. On the other hand, the trolley extension into District 1, from downtown to UCSD and University Town Centre, creates opportunities to connect existing residents and to develop new housing along that corridor. To make the transit system truly useable, there must also be better local transportation services connecting more neighborhoods to trolley and rapid bus lines. Where higher densities are allowed, as along transit corridors, developers should be required to include a certain percentage of affordable units in each project, or provide funds to develop such units offsite.

2.  Better Land Use Planning

The key to better land use planning is community engagement. Planning and development in San Diego are guided by the community plans, which comprise the City’s General Plan, commonly referred to as the “City of Villages.” Many of those community plans are outdated, reflecting land use patterns established generations ago. As they are updated, thought needs to be given to how to modify them to accommodate today’s needs.

Current residents understandably do not want to see wholesale changes in their communities. The key to making denser new development welcome is linking it to community benefits, which give residents good reasons to support reasonable growth. These incentives may take the form of new parks, street improvements or convenient transit services, and would be identified by residents through the planning process, based on more effective interaction between city planners and the community. The community benefits should be delivered before or concurrently with new development. When public facilities and infrastructure are planned effectively, in coordination with land use decisions, development costs can be reduced, allowing for more affordable housing. In an earlier policy paper, I outlined recommendations on how we can make our community planning update process friendlier, more transparent and more efficient.

3. Cracking Down on Permanent Mini-Hotels

A threat to the existing housing stock in a growing number of neighborhoods is the conversion of homes to permanent short-term vacation rentals. The Save San Diego Neighborhoods organization estimates that there are as many as 6,000 of these in San Diego. I believe homeowners should be able to rent out a bedroom in their home if they are complying with tax and regulatory requirements. However, we should prohibit permanent mini-hotels in residential single-family neighborhoods. Residents did not sign on to live next to the Marriott when they bought their home. 

Short-term vacation rentals take away homes from long-term renters or homeowners and are damaging the character of our neighborhoods. The City should enforce the existing city code to prohibit permanent whole-house, short-term rentals in residential neighborhoods. Save San Diego Neighborhoods endorsed my campaign, because I am the candidate who is serious about cracking down on permanent mini hotels, and I will be a champion for the safety and character of our neighborhoods.

4. Creating a Culture of Innovation

As a high tech entrepreneur, I intend to create a culture of innovation within local government. In terms of housing, we can create new programs similar to the way the technology industry has advanced. Here are some possible examples that could be evaluated: 

-Speeding up the process of reviewing new housing developments to reduce costs and make housing more affordable; explore greater computerization of reviewing applications and checking plans. 

-Establish a competition modeled after the HUD Affordable Housing Innovation in Affordable Housing Student Design & Planning Competition for urban planning, architecture, and finance students from UCSD and other local universities to develop a plan to address our growing housing needs through new research and innovations emerging from these academic fields.

5.  Regulatory Reform

Land use and environmental regulations represent too large a share of the cost of producing new housing. These fees for developers are intended to ensure new development is well planned and complies with environmental and building standards. However, the regulatory process needs to be and can be streamlined and made less costly without compromising these standards, and we can learn from the best practices of other communities.

Furthermore, we need to offer incentives for developers to build entry-level and middle-class housing. Currently, builders prefer to target the high end of the market, since the regulatory burdens and costs are similar for all kinds of development and the margin of profit is larger when targeting this demographic. I will support incentives to build more affordable housing, including deferral of developer fees until time of sale, speeding up project reviews, standardizing building and infrastructure requirements among jurisdictions, crediting developers for public improvements which exceed their project requirements, and extending the term of project approvals. Even relatively small improvements in speed and reduction in cost can have large beneficial impacts on housing availability and affordability.

For builders and communities alike, the most important thing is certainty. Community plan updates should be expedited and, once approved, building which conforms to those plans should not face additional hurdles. As a general rule, development should not be subject to significant changes in regulatory standards once a project has been submitted for review or has commenced construction. Also, opportunities for ministerial approval of such projects should be expanded, especially where they meet established design standards formulated in consultation with the community.

6.  Preservation of Existing Housing

Thousands of lower-income housing units have been lost, and continue to be lost, through conversion of residential hotels and single-room occupancy buildings into higher-priced apartments. Others are simply being demolished and replaced with more upscale housing. If older units are to be replaced, it should be predominantly with affordable housing. As a City Councilmember, I will initiate an inventory on our current, livable affordable housing and will seek ways to preserve the existing affordable housing stock.

7.  State and Federal Actions and Getting Our Fair Share

The housing crisis cannot be solved entirely at the local level. Reforms in state planning laws would ensure more efficient local land use practices and simpler reviews for affordable housing. We also need to aggressively seek San Diego’s fair share of funding from state and federal housing programs, and then leverage those funds as much as possible with private investment funds.

The federal government should ensure that interest rates remain at an affordable level for low and middle income home purchasers, and should allocate more funding for tax credits and other incentives for builders to construct more affordable housing.

Conclusion:

Our housing crisis has developed over many years, and it will not be eliminated overnight. However, by taking common sense, comprehensive steps like those described above, we can begin to solve the problem and place San Diego on the path to a more economically, sustainable future. Unless we take action now, San Diego housing prices will continue to rise exponentially, pushing out our rising talent to more affordable cities. When knocking on doors throughout the district, I meet residents all the time who tell me how they bought their house for $40,000 about 40 years ago. Obviously, these people bought at a great time, were handsomely rewarded for their foresight, and most importantly had the opportunity to live in San Diego. Yes, we cannot turn back the clock and exponentially lower housing prices. However, we can work collaboratively to ensure our next generation of students, families, and residents have the same opportunities to live here, raise a family, participate in the community, and contribute to our local economy.

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  • commented 2016-09-15 07:12:27 -0700
    Finding an equilibrium between demand and supply is tough. For businesses it takes a lot of analysis and research to fine tune the buying and selling and all that, what more when you’re talking about all the houses that are available in the country? Sometimes it’s hard enough trying to ensure that my self storage solutions are on a good balance with occupancy and new business so I can’t imagine the amount of work that’ll have to go in to managing the nation’s housing system!
  • commented 2016-04-19 20:13:32 -0700
    Sounds like a good plan!!

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