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    Affordable homes must be a part of the city of San Diego’s infrastructure conversation.

    The city is contemplating a ballot measure titled Rebuild San Diego that will reserve a portion of future tax growth, pension savings and new revenue to infrastructure improvements.

    Neither of the groups we run, the San Diego Housing Federation and Circulate San Diego, is ready to support the measure as written. However, we recognize that increasing infrastructure funding is vital to the economic and environmental sustainability of our region. A key component to making an infrastructure program work holistically is to dedicate a portion of those funds to affordable homes near public transit. SANDAG data shows that San Diego consistently fails to build sufficient affordable homes to meet the city’s need.

    San Diego is experiencing a tremendous housing affordability crisis. We are building far fewer affordable homes than required. Low-income workers, and families just starting out, need a home within reach of their paychecks so that they can get a foothold in the San Diego economy. Also, research shows that building affordable homes near public transit creates a measurable reduction in greenhouse gas emissions. That can help San Diego accomplish the goals of our historic Climate Action Plan. Not only are affordable homes good for the economy and working people, they can help the environment as well.


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    Infrastructure funds generated from a measure in the city have two options for financing affordable homes.

    One option would be to dedicate a percentage of the new infrastructure funds to finance the direct construction cost of new homes, including the land acquisition and sticks and bricks of construction. The funds would be awarded on a competitive basis to affordable developers, through the city’s existing Housing Trust Fund, similar to how other affordable housing financing is structured.

    With this option, affordable homes would be considered a part of the city’s necessary infrastructure, just as we treat libraries, fire stations, sidewalks and trolley hubs. Treating housing as infrastructure is not a new idea: The San Diego Regional Chamber of Commerce has long called for doing so in a potential infrastructure measure.

    Another option would be to use infrastructure dollars to offset the fees affordable developers pay the city to fund related infrastructure improvements. Almost all developments in San Diego must pay a variety of development impact fees, which are used to help pay for the infrastructure needed by those new developments. Those fees can total tens of thousands of dollars per home. Both market-rate developers and affordable developers must pay those fees.

    A new infrastructure fund could allow affordable developers to receive funding to pay for infrastructure fees. With this option, there would be no need to treat affordable homes themselves as “infrastructure,” but the effect of reducing the cost for new affordable homes would be the same.

    At least 20 percent of the funds generated for infrastructure should be set aside to support affordable homes. Twenty percent is a good figure to use, since that also represents the percentage of funds once dedicated to affordable homes from the now-defunct redevelopment program.

    There are several options for any measure that finances infrastructure to also contribute to affordable homes. The city must ensure that housing affordability is a key feature of its infrastructure agendas.

    Jim Stone is executive director of Circulate San Diego, and Stephen Russell is executive director of the San Diego Housing Federation.

      This article relates to: Infrastructure, Opinion

      Written by Opinion

      Op-eds and Letters to the Editor on the issues that matter in San Diego. Have something to say? Submit a commentary.

      12 comments
      Founder
      Founder subscriber

      Two comments about "Affordable Housing":


      1.  One major concept that should be considered is that if Developers get to increase their profits (from building additional units due to getting a Density Bonus), then it is only right to require them to set aside more than just a token amount of all the new units as long term rent restricted Low and Low-Moderate units, (especially where this development is located along our transit corridors) so they do their part to help our City grow in a responsible way, instead of just profiting from adding as many units as they can.


      We should be providing long term rent restricted Low and Low-Moderate units which will help insure that those at the lower end of the income scale (like for those just starting out and Seniors living on fixed incomes) can find affordable housing.


      What we should NOT be doing, is to be building Market rate housing and allowing Developers to game the system by calling it "affordable" housing so that they can then get a Bonus of being able to build additional units for doing it.


      The solution would be to require a certain percentage of all the units built (in all unit sizes) to be long term rent restricted Low and Low-Moderate units, that way the area will get some desperately need housing and the Developers will be doing their part instead of just making a killing on the project.


      To the North County Developers that say that will not pencil out for them, I suggest they take a look at what has been built in Mid-City.


      I predict that all these units will be in such demand that Developers should be required to hold a lottery to insure that they are not given out to friends who will then use them for AirBNB or any other purpose other than what they were built for, providing long term housing for those at the lower end of the economic scale.


      2.  I believe that we are seeing Big Developers spending money supporting groups that will then enable these same Developers to build more in-fill Density without having to include adequate parking and other things that will result in reducing the Quality of Life in the areas where Densification occurs for everyone in that area.  I've heard their justifications, "residents living along transit corridors will not need cars since they will use mass transit so we should not have to provide as much parking" but this speaks to only their side of the situation, since parking is for the entire neighborhood not just the people living in the new developments, who will have people driving over to visit them, who will them have problems finding parking nearby, as well as all the people (employees and customers) of the commercial spaces that are located o the street below most of the new Developments being constructed.


      We need to have a City-Wide ratio (i.e. 25%) for how many long term rent restricted Low and Low-Moderate units are built in all new projects so that SD does not get slammed with just additional market rate housing Density while really only providing just a token amount of much needed  Low and Low-Moderate housing, while trying to make it appear that we are doing the opposite.


      In short, we need Good Density not just More Density.  All new construction also needs to include infrastructure improvements that will mitigate the addition of more Density and the larger the project them more mitigation is required, which is something that has in the past been promised but never seems to occur, since money is "tight."



      Parts of the above were also post:  http://tinyurl.com/jee7ytp


      Don Wood
      Don Wood subscriber

      I wouldn't call low income housing advocates "environmentalists", unless you're using the term to describe anybody you might be mad about at the moment. Environmentalists care about bugs and bunnies, clean air, clean water etc. Low income housing advocates want "affordable" housing for everyone. It's interesting to see every special interest group trying to get their concerns added to the term "infrastructure". Cities are required by law to provide safe streets, curbs and gutters, bridges, clean water, sewerage systems, parks and other hardscape elements we call "infrastructure". The term does not normally include things like low income housing, city employee salaries and benefits. While Kersey's ballot measure may not be perfect, its provides more money for city infrastructure maintenance than we have under the existing system. If too many special interests oppose it because it doesn't contain more goodies for their target audiences, the initiative will fail and we'll be back at square one.  

      Mark Giffin
      Mark Giffin subscribermember

      I will not support an infrastructure initiative that can't even define what infrastructure is. The problem of affordable housing is a separate issue

      and has no place in the initiative.

      This "piling on" is why the cities efforts have made the cost of these affordable units "taj mahals" as the VOSD series of stores pointed out before.

      Enough is enough.

      Chris Wood
      Chris Wood subscriber

      Rather than imposing more rules and costs on building houses, why not try fewer and see what happens?


      http://www.pointloma.edu/sites/default/files/filemanager/Fermanian_Business__Economic_Institute/Economic_Reports/BIA-Final.pdf


      Excerpt:

      “…• A relatively modest 3% reduction in the regulatory cost of

      San Diego’s housing could open up housing alternatives to

      approximately 6,750 additional households in one year


      The economic benefits of the resulting increase in homebuilding

      would be substantial. After including all of the ripple or multiplier

      effects, San Diego could realize a $3.1 billion gain in its gross

      regional product (GRP) and a $2.5 billion gain in its total personal

      income. An additional 37,000 jobs could be created.….”


      Jay Armenio
      Jay Armenio

      @Chris Wood I applaud your common sense.


      However, I don't believe homeowners in the area actually want to fix the affordability problem.


      The preferred solution is to pass on the added cost of housing to the public. 


      Local zoning laws and building codes specify where housing may be built, as well as its density, quality, and style. 


      Yes, they add high costs to development, but they were put in place for one reason, to protect surrounding property values. 


      Let's say that you owned a million dollar house, and a lower end subdivision was being developed right down the street that may negatively impact your property value.


      Of course you want to protect your house value, so you go and fight it. Protest in the streets, rally the neighborhood and bother your local officials ect... 


      This happens all the time. 


      It is only a problem for people who do not own a home, these rules and regulations where put in place by homeowners who are protecting the value of these property. 


      The main problem they created for themselves was higher property taxes. 


      So, we passed a law to protect homeowners from the rising property taxes.


      Personally I completely support easing these cost burdens to make development a cheaper, simpler process. 


      However remember this, common sense solutions do not occur, because there are interests who are invested in the problem. 







      bgetzel
      bgetzel subscriber

      @Chris Wood The contention that lowering regulatory costs will result in the building of more units of affordable housing is, and always has been, a fiction. Regulatory fees are approximately $20,000 to $25,000 per unit. Much of those funds pay for plan checking and building inspections, both of which safeguard the public from shoddy, unsafe housing being built. Developers may say that there are other regulatory costs, mostly related to building code requirements. But, there again, those codes are designed to assure only the building of safe, sound housing. Even if there is some excess in the aforementioned fees and code requirements, they would total to be a minor sum. Currently, to feasibly build an affordable rental unit, rather than a market rental unit, the affordable unit needs an upfront subsidy of at least $100,000. Obviously, that amount cannot come from regulatory changes alone!

      bgetzel
      bgetzel subscriber

      @Derek Hofmann @bgetzel Minneapolis has eliminated the parking requirement in downtown housing. That would help to lower the cost of housing in San Diego, as long as the housing is in downtown or another neighborhood in which  people have adequate public transportation and where people are willing to take it (i.e. the housing must be marketable). But that housing has an even bigger gap than the $100,000 I spoke of, as land and infrastructure that serves it are more expensive in downtown. If the gap to build affordable housing in downtown is $150,000 per unit, and you eliminate parking as a requirement, that gap maybe goes down to $100,000 to 110,000 per unit. It helps, but you still have a big problem. 

      Bill Bradshaw
      Bill Bradshaw subscribermember

      @bgetzel @Chris Wood If regulatory fees are 20-25k per unit, whether the unit is "affordable" or simply built for sale, maybe you can explain the findings of VOSD in a series of reports on the San Diego program several years ago that indicated an affordable unit was costing approximately twice as much as a regular one.

      bgetzel
      bgetzel subscriber

      @Bill Bradshaw @bgetzel @Chris Wood You have to compare apples to apples. Affordable units are most often built to have a mix that accommodates families (1 -3 bedrooms), and contain community centers where after school programs and other services are provided. Market rate multifamily units usually have less bedrooms and do not contain those amenities, which do have social value. Otherwise, the only cost that are higher in building affordable units is a bit more for attorney fees. 

      Derek Hofmann
      Derek Hofmann subscribermember

       "However, we recognize that increasing infrastructure funding is vital to the economic and environmental sustainability of our region."

      But doesn't that require taxes, and don't taxes hurt the economic and environmental sustainability of our region? How do you find the right balance between taxes and infrastructure spending? The answer to this question is important in determining whether we are taxing ourselves too much for infrastructure, just the right amount, or too little. #NoNewRoads