A conversation about housing affordability

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Close to half the residents of San Diego are spending more than 30% of their income on housing.  Nationwide, half of renters are in the same position, and there is no state where minimum wage earners can afford to rent a two-bedroom apartment. While we have plenty of housing supply at the high end in San Diego and in California, and the lowest income residents may get assistance, the middle of the income pyramid is where the pinch can be felt most acutely.

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Since 1970, California's share of the middle class fell from 60 percent to just over half the population. That trend almost mirrors patterns across the country. The number of middle-income Americans slipped from 61 percent in 1971 to 50 percent in 2015, according to the Pew Research Center.  The Public Policy Institute of California classifies middle income earners as those making between $49,716 and $174,006 based on 2017 calculations.

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Clearly this is a problem for San Diegans at a variety of income levels. Let’s focus on potential solutions for middle-class housing affordability.

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The building industry, not surprisingly, since they need to provide a return to their shareholders, promotes a “build high end homes everywhere” strategy of increasing market-based supply everywhere at all costs. That strategy so far has resulted in urban sprawl and an abundant supply of luxury homes and condos, where profits are maximized, but little in the way of attainable housing for the middle-class.

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The only way we will improve housing affordability is if we decide to build it, by undertaking policies complementing the market forces that leads the industry to understandably focus on segments of greatest profit potential. The current General Plan has enough capacity to accommodate all housing needs for expected population growth into at least 2030. County-wide, the current zoning for the County and all 18 cities can accommodate ALL of the projected housing in San Diego County through 2050.

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County government could play a leadership role in several areas:

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1.    Encourage smart growth, which results in higher supply of units in the right locations, closer to work centers - which reduces commuting costs. The other reason building to the General Plan results in more affordable housing is that the County has funded plans for roads, sewers and other infrastructure in General Plan Smart Growth Areas. Building outside these areas creates an enormous new cost for unplanned road construction and other infrastructure cost (sewer, schools, fire, etc.) that the developer shifts to taxpayers.  This can be achieved with a two-prong strategy – stick and carrot:

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• • Discourage sprawl outside the General Plan by: 

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• ◦ implementing the SOS initiative, which will let taxpayers decide which exceptions to the rules warrant the cost in decreased quality of life, infrastructure cost, and increased fire risk; 
• ◦ requiring a full evaluation of emergency evacuation all the way to safety as a condition of processing through the County Planning Development Services department;
• ◦ enforcing the mandate for General Plan Amendments  to provide justification for a clear and concrete public interest benefit beyond the mere provision of housing.
• ◦ Encourage building where the General Plan has 52,000 units ready to build, most of them infill in moderate-income areas.  The county could implement a variety of policies to incentivize developers to build new housing near rail lines and other infrastructure, including zoning variances for height, tax breaks on construction and a swifter and less expensive permitting process.  Incentives and subsidies should be used as appropriate, and current regulations modified as needed, to ensure builders can profitably develop these infill projects as quickly as possible.

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2.    In addition, we could increase housing supply County-wide by modifying County regulations to allow accessory dwelling unit (ADU - also known as granny flats), by right throughout the County, including converting any existing square footage into an ADU, with no size limitation.  An ADU implies separate entrance/kitchen so it could be rented separately. Ideally with reduced or zero building permit fees and other incentives to encourage increasing supply while providing property owners with new sources of income, which helps both tenant and landlord with housing cost.

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• a. A variation on the theme is to relax minimum size requirements and other limitations on detached ADUs.
• b. Another area to investigate to increase housing supply through modifying regulations regarding so-called “tiny homes”, currently prohibited in County code because of minimum size regulations.
• c. There may be opportunities in the County to also look at current regulations regarding mobile home parks as a possible avenue to increase housing supply.

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3.    Play a direct role, possibly through public-private partnerships, in providing housing for certain types of public service workers such as firefighters, police officers, nurses, and teachers.  As both a recruiting and retention tool, the County could purchase, rehab or build housing near workplaces and make employees eligible to either purchase the homes at a reduced price, or subsidize rents.  The model could be akin to faculty housing for universities, or to the educational allowance the military provides in return for a given length of service commitment.  There is a public interest in keeping our first responders for example close to their workplaces in case of emergencies, and in general in attracting the best caliber of employees to serve San Diegans. 

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4.    Develop an inclusionary ordinance for San Diego County, where none exists currently.  While most incorporated cities require new developments to include provision of a certain percentage of housing for given income levels, none are in place in the unincorporated area, the only jurisdiction the Supervisors have jurisdiction over.  Inclusionary housing is a market-based solution using the planning and zoning process which do not require direct subsidy dollars to create affordable or attainable homes and rentals.

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 In order to be effective, ideally the ordinance should include:

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Provision of housing on site as opposed to in-lieu fees to build elsewhere to encourage mixed income neighborhoods and to make sure units are built;

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Restriction in perpetuity instead of for a limited time period

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Consider 15% or higher inclusion rate

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5.     Transportation and housing policies are inextricably linked. Take a leadership role in tackling the issue of transit and transportation to develop a vision for San Diego of a forward-looking county in two key areas:

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• • Affordable, convenient and reliable transportation options throughout the region, to facilitate housing near transit, and greatly improve the quality of life of San Diegans by getting some drivers off the freeways. The vision would be to achieve a goal of having all income levels choose to use some form of transit because it is more convenient, as it is in most world-class regions in the world. Shuttle services in the unincorporated county from villages to transit locations should be investigated.

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• • Investments in smart mobility solutions in partnership with industry to develop San Diego as a hotbed of research and development for innovative transportation solutions.  We have a unique opportunity to choose not to follow the lead of the rest of the Southern California counties that have succumbed to urban sprawl, and instead to plan both housing and transportation around the technologies of the future such as autonomous vehicles, smart highways, electric shuttle services and others, using data analytics to greatly improve quality of life by reducing commute times and provide alternative transportation options to vulnerable populations such as the elderly on fixed income who need a way to get to their medical appointments for example.