You might have noticed: San Diego is expensive.
Rents in most urban neighborhoods are affordable only to the upper middle class and rich, with prices now at a post-bubble high. The working class is increasingly being displaced to exurbs, not just within the county but also in Riverside County. A full 57 percent of the region’s renters are rent-burdend, meaning they spend at least 30 percent of their income on rent. That’s the 10th highest figure of the 100 largest metro areas in the United States. Famously expensive New York and San Francisco are at only 54 percent and 48 percent, respectively.
San Diego’s expensive housing is a direct consequence of its housing supply shortage. This pattern repeats itself across expensive cities, with development restrictions making it difficult to build more housing, and people who wish to move into an area bidding up rents and housing prices as a result.
Publications for real estate investors, such as Metrostudy, even look for this pattern when forecasting markets: During construction booms they forecast flat or falling prices, and when housing construction lags population growth they forecast price increases.
It’s this trend that’s given birth to an incipient movement calling for laxer zoning and more housing construction, dubbed YIMBY, for Yes in My Backyard. The biggest and most notorious YIMBY movements are in the richest and most expensive cities: In San Francisco, Sonja Trauss runs the Bay Area Renters’ Federation, and in New York there’s an online magazine called New York YIMBY. San Diego’s YIMBY group – a mix of developers, urbanists, bike advocates and environmentalists, even got a write-up in the New York Times.
San Diego is not like New York or San Francisco in its history or development pattern, but like those two cities, it is expensive. And while it is not as wealthy as San Francisco, it is still richer than the country as a whole.
We Stand Up for You. Will You Stand Up for Us?
Nice story. I would like some study of labor rates for San Diego Unions and or "Prevailing Wage" rates as compared to the areas where construction is doing a better job of keeping up with demand. This plays into all the Stadium stories as well (note new facilities built in Texas over the past 20 years). It is hard to build for the "working class" as stated in the story when you have to charge rental rates they cannot afford because the costs of building are perhaps not in line or even close to the costs in Texas and Georgia where they seem to build more.
Unless we concentrate it in urban central locations, new housing just brings more pollution, traffic, and claustrophobia. As a born and bred SD native, all I can say, in grumpy old man fashion, is things were better before the mid-90's.
A big part of NIMBYism lies in the question: why do we long time natives have to see our quality of life decline because everyone wants to move here? Why is it a given that we have to become a big city? We don't have to. Let LA or SF or NY be big, we can be our own kind of place.
Developers will charge the maximum that the market will allow for for-sale housing. The highest and best use (to use an appraisal term) of residential zoned property will nearly always be upper-income housing. And San Diego has enough upper income people, or those who have a bundle of equity in homes they already own, to
pay those outrageous prices. In addition, given the derth of residentially zoned property, we cannot produce a supply that would be big enough to depress housing sale prices. Finally, the high cost of residentially zoned lots in our limited land supply, together with the rising cost of building materials (a global issue) and labor, there is a regidity in housing prices ever going down much, if at all.
The supposedly good intentions of CA state and local policies deserve the blame for the effects of poverty and homelessness across the state. Making it easier to build housing doesn't seem to be an option, politicians in office today continue to propose imposing more restrictions and fees on housing developers to lower the cost of housing, even though the CA legislative office in 2015 blames blames CA's housing shortage on:
Government foot dragging
An excellent summary of the causes and consequences of the housing crisis is available here: http://www.lao.ca.gov/reports/2015/finance/housing-costs/housing-costs.aspx
Expect environmental groups to continue to exploit the climate change law to veto projects when they are unable to extort expensive concessions from developers;all construction and housing results in an increase in greenhouse gas emissions.
There's a lot of useful housing that could be added by well-designed infill projects, but those are opposed by local planning boards such as the Uptown Planners that stifle useful housing production at every opportunity and by grifting politicians that want the campaign cash from developers of big projects. We need a lot more of the smaller projects and an end to the big projects.
And not to be overlooked is the impact of the obstruction of NIMBYs. More of them need to die off and/or have their privileged tax status removed by repealing Prop 13.
@Greg Martin --How many home owners are reaping the benefits of Prop 13 now than from when it was originally passed?
@David Crossley My neighbor pays 1/5th as much in property taxes as me because she bought in 1977 and I bought in 2010.
@David Crossley @Greg Martin That's actually a great question. I believe the average length of owning a home is 7-8 years, so prop 13 is probably less of an issue than many think - but I would love to see the actual numbers.
A better solution would be removing governmental barriers to new construction (Fed, State & local) . Every new (or re-built) retail center should have a residential housing component on top. It pencils out for the developer, adds inventory to the housing market and reduces commutes. Everything except for the government permits and process, which kills the idea.