“Developers always lose.”

When I first read Gary London’s assertion in a recent VOSD article claiming that the lesson of 2016 was that no one wants new housing anywhere in San Diego, I thought it was some sort of parody.

Letters logoIt’s an absurd assertion. Developers have the inside track both to staff and elected officials in numerous jurisdictions, often using (and sometimes abusing) their connections and their significant campaign contributions for their personal gain. I have witnessed it happen many times in the years I have been working on land use matters throughout various parts of San Diego County.

Voice of San Diego could certainly do its own investigation into the successes and failures of developers, but just a few recent projects that come to mind where developers won in 2016 include a 420-unit project in Oceanside, a 71-unit project in Chula Vista and an 88-unit project and 41-unit project in Vista.

And in November, developers were successful in convincing the San Diego City Council to ignore several years of community input to give developers exceptions to zoning and other land use restrictions, despite the fact that community residents and the community planning group made it very clear that they were not opposed to housing, they merely wanted it done in a manner that was respectful of their existing community.

Even the vote in November reveals that developers can and do win – for example, residents of the city of Del Mar rejected a measure that would have added certain limits to development in that city.

We Stand Up for You. Will You Stand Up for Us?

Yes, both countywide Measure B and Measure T in Encinitas lost, but it’s a stretch to draw broad conclusions from those two votes. They weren’t even slightly similar ballot measures. Measure B was rejected largely because it defied the existing county plan and proposed putting too many houses in an agricultural area that could not support them. Measure T was a complex plan proposing significant amendments to existing community standards throughout many parts of the city of Encinitas.

If the proponents of both of those measures were spinning the “any housing is good housing” line, then that goes to show the fallacies in their campaigns, not the similarities of the two measures.

Developers do not always lose. Far from it. I for one am heartened to see that voters have realized the real costs of some of these projects. But I would encourage Voice of San Diego to do some investigation into the so-called “housing crisis” allegation that underlies these sorts of claims of poor pitiful developers.  I think some in-depth reporting in this area would reveal the fallacy that simply building more housing will necessarily lead to affordable housing.

Everett DeLano practices land use and environmental law throughout Southern California.

    This article relates to: Growth and Housing, Housing, Opinion

    Written by Opinion

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    mike johnson
    mike johnson subscriber

    Mission Beach residents got screwed by the developers in the redevelopment of abandoned school with 63 condos. Developer were allowed to put required park along Mission Blvd. Unanimously opposed by Town Council. Allowed to call alley and sidewalk private so they could build an additional 150 square feet onto 1350 square feet condo.  future buyer will convert that space to another bedroom.  Only required two parking spaces for three bedroom, later 4 bedroom. Oppose by community.  Community group just got slam at Planning Commission and City Council (Zafp).  It helps when there are four lobbyst firm registered for the project.

    herm toba
    herm toba subscriber

    Breaking News from 1978. 

    Sean M
    Sean M subscriber

    Good catch. As expected it cites the climate action plan, which attorneys will use as a roadblock for every contested housing initiative.

    Chris Brewster
    Chris Brewster subscribermember

    Thanks for this. The article to which you refer was simply bad journalism. 

    paul jamason
    paul jamason subscribermember

    The author states, "Developers were successful in convincing the San Diego City Council to ignore several years of community input to give developers exceptions to zoning and other land use restrictions, despite the fact that community residents and the community planning group made it very clear that they were not opposed to housing, they merely wanted it done in a manner that was respectful of their existing community."

    I assume this is referring to the Uptown Community Plan Update, where the community planning group attempted to downzone the Hillcrest and Mission Hills commercial cores, reduce the overall number of housing units from the 1988 Plan, create multiple historic districts to block development, and make the Interim Height Ordinance (IHO) permanent.  

    For eight years, this "interim" ordinance effectively killed any new housing in these neighborhoods.  Land prices in Uptown are simply too expensive to build housing at these arbitrary height limits, and that's before all of the excessive and costly off-street parking demanded by residents.  Then residents required that all new housing also be affordable, somehow.

    These exclusionary zoning tactics are the primary reason San Diego has a housing crisis: 
    https://www.wired.com/2016/12/year-housing-middle-class-cant-afford-live-cities-anymore/.  Surely the author understands that established homeowners have many motives to prevent new housing in their neighborhoods, from city-subsidized street parking to spectacular property value profits.

    I'm not sure which residents the author is referring to, but at the Uptown Planners meetings I attended, most made it very clear that they opposed any new housing.  Despite these urban neighborhoods being well-served by transit and just minutes from downtown, residents' top priorities were suburban in nature: abundant free street parking and congestion-free streets.  Spend a few hours reading their comments here: https://www.sandiego.gov/sites/default/files/uptown_cpu_final_peir_reduced.pdf

    Roy McMakin
    Roy McMakin

    @paul jamason your characterizations of what happened Uptown are simply not correct and are typical of developers and more specifically the very few wealthy land owners who own most of the Hillcrest commercial core. You leave out the important fact that the planning group and majority of residents wanted to have the highest density be along Park Blvd where the City has invested in transit much more than in the commercial core of Hillcrest and Mission Hills.  But the lobbyists who clearly had the ear of Todd Gloria didn't work for those land owners so that wasn't of interest.

    Also you characterization that the residents "killed" housing is just nonsense.  There are  many projects in Uptown that are either under design,  construction or recently completed.  And had the few land owners that have held development in Hillcrest hostage been willing to either build according to the existing community plan or sell their property to someone who would have we would have seen more.  But they simply wanted a much bigger payday at the expense of the community.   One property owner freely admitted they assembled Hillcrest property at values based upon existing zoning,  but were hoping to upzone their property to make more money.   This is exactly like the developers of Lilac Hills whose entire game was to buy property with one zoning and use their political influence to get it upzoned to make a huge profit.  Why should the community help them do this?  They clearly have enough help with their friends in city government anyway.

    Also,  your characterization that the community wants historic districts to block development is also a complete mis-characterization of what the community wants.  They want to preserve the nature of the community while allowing development.  If you read the Secretary of the Interior guidelines for historic districts you well see that the encourage development while preserving character.  But in this process one developer actually said the community was asking for parking lots to be preserved.  I don't that was because he believed that to be the case, he was just trying to discredit well the community for his personal gain.  Did you recall hearing Bruce Coons of SOHO ask for the City to create a system to allow for owners of historic property to sell their development potential to other properties to build them denser (such as parking lot owners)?

    And you state that the residents demand off street parking,  but you must know that parking is part of zoning laws and can only be altered by City Council.  I've been at planning meetings where the community asking for a project to have reduced parking to allow for a commercial space in the project (in Bankers Hill) but the City wouldn't allow it.

    The tactic of trying to polarize and simplify  the dialog,  and discredit smart and well intentioned community members because they won't agree to let developers,  land owners and multi national real estate investors do whatever they want to make a ton of money (in community they don't even live in) without community members input is the problem.  In other words,  your tactics are really the problem,  not the community.

    Derek Hofmann
    Derek Hofmann subscribermember

    @Roy McMakin "And had the few land owners that have held development in Hillcrest hostage been willing to either build according to the existing community plan or sell their property to someone who would have we would have seen more.  But they simply wanted a much bigger payday at the expense of the community."

    Then would you support replacing the sales tax dollar-for-dollar with higher property taxes in order to encourage developers to build as quickly as possible instead of spending time lobbying for zoning variances?

    George Courser
    George Courser subscriber

    Delano sees it, gets it and reports the abuses. It would be wise for Voice of San Diego to do the in-depth reporting he suggests. High praise as well for former California assembly member Lori Saldana. Saldana takes readers (and reporters) to the heart of the affordable housing shortage: Lori quotes activist Steph Johnson "10,000 affordable housing units are gone and only about 500 have been built in its place." We can only hope Voice of San Diego pursues these instructive leads. 

    Derek Hofmann
    Derek Hofmann subscribermember

    But isn't building more housing to alleviate the housing crunch like loosening your belt to cure obesity?

    When demand > supply, is increasing supply the only way to equalize the two?

    lorisaldana subscriber

    @Derek Hofmann  This is true when San Diego allows the building of more market-rate homes, while ignoring affordability requirements. And/or they require developers to simply pay into a fund for some future affordable housing that may or may not be built.

    These policies will never create the mix of housing, at various prices, that is needed. This includes multi-family rentals as well as for-sale residential units.

    Recent VoSD articles have documented that San Diego has excelled at building market-rate housing in places that used to have subsidized/affordable housing, e.g. single room occupancy hotels downtown that are now replaced by high rise condos and/or "boutique" market rate hotels. 

    I documented one of these slow-moving redevelopment disasters for affordability in the Rancho Peñasquitos area, after observing a hearing a few months ago. Details were published on the Voice website: http://bit.ly/UnAffordableSD 

    All of this supports what   a fellow advocate for homeless people in San Diego stated recently:   We are seeing more homeless people in large part due to "the removal of affordable housing units that the city has built since 1976. 10,000 affordable housing units are gone and only about 500 have been built in its place.

    "In the place of these demolished affordable housing units are now luxury condos and hotels, except that tourism is being affected by the large numbers of people living on the streets and business owners in downtown are panicked. They are desperate for real solutions and so are the people.

    "Greed has a consequence. The spike in homelessness in San Diego is a man-made disaster.

    "The builders of those shiny new luxury condos and hotels paid fines of up to 1 to 2 million to NOT provide affordable housing. Guess where the money went? Into the City's general fund and the city isn't using it for affordable housing. Instead they use tax payer money and energy to arrest, ticket and put poor people into jail while hoarding that money."

    Thanks to musician and local activist Steph Johnson for this concise rebuttal of our current housing situation. It is this series of blunders- intentional or otherwise- that has lead to a homelessness crisis in our region.

    Derek Hofmann
    Derek Hofmann subscribermember

    @lorisaldana Maybe part of the reason why developers are unwilling to build affordable housing is because (1) the zoning code prevents them from building dense, cost-effective units; and (2) the uncertainty about whether the public will reject the development, even when it meets the zoning code, adds too much risk for the project to be worthwhile.

    Chris Brewster
    Chris Brewster subscribermember

    Ms. Saldana: The ironic/sad part of this is that this cycle of greed has fueled homelessness, which now threatens the liveability of the city, and thus, in part, profits from future development. 

    Sean M
    Sean M subscriber

    Interesting observation that affordable housing price controls mean less housing gets built, just like every econ 101 textbook suggests. The unintended consequence of rules intended to benefit affordable housing lottery winners is that many more people are forced into homelessness and housing costs go up for everyone. Another predictable result is political activists blame greed for making rational economic decisions.

    Expect the local CA legislators to implement new fees and restrictions intended to create affordable housing by raising costs.

    bgetzel subscriber

    @Derek Hofmann @lorisaldana You are correct. The developer does not see the profit margins with Affordable Housing, that it does with market rate units. Encouraging the building of affordable units through inclusionary housing requirements (i.e. requiring that a specified percentage of the units be affordable) is a partial solution. Unfortunately, not all jurisdictions have adopted this approach, and the ordinance in the City of San Diego allows the developer to substitute a low "in-leu" fee instead of building the units. That fee is insufficient for financing the building of those units elsewhere. 

    Chris Brewster
    Chris Brewster subscribermember

    Ms. Saldana: It is emblematic of the sleight of hand and poor political leadership in San Diego that so many affordable housing units have been built, and then evaporated. We can be sure that certain politicians heralded the building of the units, but were either complicit or asleep when they disappeared. And we wonder why we have homelessness. 

    lorisaldana subscriber

    @Chris Brewster In a nutshell: the "in-lieu" fees are too low, rents/mortgages are too high, and elected officials receive support and campaign contributions from those who benefit from this arrangement.

    Add the elimination of the state Redevelopment program, that required 20% of tax increment go to affordable housing in downtown San Diego, and you have an additional recipe (and excuse) for market rate vs. affordable housing being built in East Village etc. with few if any affordable units added to the mix.

    Yet- taxpayers still subsidize these market rate housing projects, in the form of credits to developers that are supposed to stimulate "public private partnerships." 

    Sadly- the developers prefer to keep things private, and ignore the public part. E.g.: Pinnacle Development adjacent to Faultline Park. The "successor agency" to the former Centre City Redevelopment agency is Civic San Diego. They gave Pinnacle a $1.6 million credit for maintaining the park and public restrooms. 

    But apparently Pinnacle's "maintenance" means hiring private security guards, keeping homeless people out of the park, and refusing them access to the "public" restrooms.  See: http://bit.ly/FaultlinePark