The New Conversation on Subsidized Housing - Voice of San Diego

Affordable Housing Fee

The New Conversation on Subsidized Housing

A City Council committee is feeling out funding options to build more subsidized housing. At least two Council members want to pay close attention to getting more out of the money the city’s already spending.

For years, discussion over subsidized housing in San Diego has centered on one specific fee.

The city charges developers a fee when they build office, retail and industrial buildings and puts the money in a pot that pays for subsidized housing and housing for the homeless.

Efforts to raise that fee had been a political football ever since it was first introduced in 1990, and especially after it was cut in half in 1995. But city leaders agreed on a modest compromise earlier this year, after Democrats approved a much larger increase and business groups nearly forced the issue onto the ballot.

Now that the modest increase has been approved, the city’s asking about other ways it can bring in money for subsidized housing, or how it can get more out of the money it already has. Even the higher version of the fee increase was only set to provide 80 to 100 homes.

The City Council committee on housing and development has asked the city’s independent budget analyst for a report on funding options to build more subsidized housing.

So that’s what the IBA did – sort of. The resulting report details funding options for affordable housing and also infrastructure, something the Council didn’t ask for but that the IBA insists should be the city’s No. 1 priority.

The committee responded by asking its original question over again: What can be done about subsidized housing? Committee members were directed to send specific inquiries to the IBA to be sure they were answered in the report.

Committee chair Lorie Zapf and Councilman Scott Sherman’s comments at committee indicate they’ll push for that conversation to pay closer attention to getting more out of the money it’s already spending.

“There are 40,000 people on the waiting list (for subsidized housing), so if we could produce more units for the amount of money we have, it would go a long way to helping the people get into housing, and really it’s a matter of fairness when you have so many thousands on the waiting list,” Zapf said.

She also hoped to see more information on how the city could get more from state or federal sources.

Sherman said the initial IBA report had a lot on new revenue options, but not as much on reforming how money on subsidized housing is spent.

“Money is money, whether you’re bringing it in new or you’re saving money and you can spend it elsewhere,” he said.

He specified one possible reform he’d like the IBA to look at.

“We could do a cost analysis on affordable housing, and what the savings would be if there was no prevailing wage, just for affordable housing projects,” he said.

Currently, the city guarantees a certain pay rate for workers on any city-funded construction project. Sherman’s asking how much more housing for low-wage workers the city could build if it could pay workers lower wages when they’re building homes for low-wage workers.

He also suggested the IBA dig into why it costs more to build a single subsidized apartment than a regular one.

Though the IBA focused its report on possible funding options on infrastructure, it’s likely at least some of those potential sources will also translate to subsidized housing.

A lot of the items on the list have been kicked around in the past, without amounting to any concrete proposals, but there were two new ideas that could be specifically tied to subsidized housing construction. Some of the other new ideas in the proposal would be limited to infrastructure funding.

• Parking occupancy tax: Charged along with the fee when you park your car in a paid parking garage or parking lot. Los Angeles, Oakland and San Francisco all use this already, generating between $16.6 million and $96.6 million per year. San Diego doesn’t.

The city would need to get two-thirds voter approval to use this on something specific, like subsidized housing or infrastructure. It would only need majority approval if the money was going to go to the city’s general fund.

• Utility Users Tax: Charged for use of electricity, gas, water, sewer and telephone or cable. Roughly 150 cities use this already, charging between 1 percent and 11 percent, and the IBA called San Diego “unique” in not having one.

The IBA said San Diego could generate as much as $99.6 million each year, based on average rates in other cities.

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