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Among the 130 housing bills before the state Legislature is one sponsored by the city of San Diego that would allow local housing authorities, like the San Diego Housing Commission, to build middle-income housing.
As legislators from all over California put forth potential housing solutions – 130 bills, to be precise – the city of San Diego is weighing in, sponsoring its own housing bill with the help of local Democratic Assemblyman Todd Gloria.
The measure, AB 1637, would allow local housing authorities, like the San Diego Housing Commission, to get involved in mixed-income housing that contains some subsidized and some market-rate units.
Housing authorities traditionally deal exclusively with low-income housing, meaning they can only develop, fund and operate housing meant for people who earn 80 percent or less of the area median income. In San Diego, that means making $72,750 for a family of four.
If the bill passes, the Housing Commission would be able to use certain funds toward currently non-subsidized, market-rate housing, as long as at least 20 percent of the development was set aside for low-income housing. The market-rate housing would be for middle class residents or what the bill calls “workforce housing,” people who make between 81 percent and 150 percent of San Diego’s median income.
The bill originated from a report produced by the San Diego Housing Commission in 2015 that looked at San Diego’s housing affordability problem and posed potential solutions. This 80/20, mixed-income model was one of the solutions.
“We need to up supply,” said Debbie Ruane, executive vice president and chief strategy officer of the San Diego Housing Commission. “So we looked to create a new range of housing to serve the families that are earning up to 150 percent [area median income], but are being shut out of rent. The purpose of this bill for us is to provide housing for the nurses, the teachers, the first responders.”
San Diego needs to produce more than 160,000 homes between 2010 and 2020. As of 2014, the region produced only 31 percent of the high-income units needed, 4 percent of the moderate-income units needed and 6 percent of the low-income units needed, according to the report.
The region’s failure to produce enough low- and moderate-income housing not only hurts its poorest residents, it leaves even its middle class struggling to pay for housing. The same Housing Commission report estimated that buying a home was financially out of reach for 70 percent of San Diegans.
Nearly half of people in San Diego County spend more than 35 percent of their income on rent and are considered rent-burdened. More than 34 percent are spending more than 50 percent of their income on rent.
The Housing Commission and Gloria say that allowing housing authorities to get involved in mixed-income development could have several benefits. It could help increase the supply of both middle- and low-income housing, by allowing both access to new sources of funds. It could quell some of the neighborhood opposition to low-income housing, since middle-class families would also be in these developments, and help to better integrate different income levels in neighborhoods.
Stephen Russell, executive director of the San Diego Housing Federation, said while he supports efforts to increase the market-rate supply, he has concerns about the bill.
“By broadening the mission of something like the Housing Commission, you are actually making the issue of affordable housing relevant to a broader constituency,” Russell. “That’s both an opportunity and a risk.”
For one, subsidized housing is already competing for a small pool of funds, so the thought of also subsidizing middle-income housing is worrying to affordable housing developers.
Ruane said the bill would make the Housing Commission more nimble with its funds and make low-income developments less dependent on tax credits.
“The cost of building anything is high,” Gloria said. “While we’re building this stuff, if we can insert units that hit a higher end of the economic ladder, it would help fund those lower-income units.”
Chuck Christensen, the Housing Commission’s general counsel, also said that many funds will still be restricted to low-income developments and families. This funds that will remain for low-income housing include federal funds used by the housing commission, money from inclusionary fees – fees paid by developers if they don’t want to include low-income homes in their developments – and linkage fees – paid by commercial developments are still restricted to low-income units.
The bill would give the Housing Commission more flexibility and discretion with other local funding sources, Christensen said. For example, the commission is working on a transit-oriented development fund that could potentially be used for mixed-income projects. Or if the City Council gave money to the Housing Commission to invest in housing, it could be used on mixed-income developments.
Gloria and the Housing Commission also said they hope that mixed-income projects will better integrate communities and temper community opposition to low-income units.
“It is not a social good to concentrate all low-income housing in one neighborhood or even in one building,” Gloria said. “There is a tremendous amount of public benefit when you have diverse, balanced communities.”
Russell said he’s not convinced that mixed-income developments would receive any less opposition and that he doesn’t think opposition is the biggest barrier to providing low-income housing.
“If it allows for more market-rate without hurting low-income then it’s great,” Russell said. “I think ultimately a greater supply of housing is part of the solution, but we don’t want to take our eye off the ball when it comes to low-income housing. My biggest concern is that housing authorities not lose focus on the most vulnerable of our citizens.”
Gloria has taken a leadership role at the state level in addressing the struggles of middle- and working- class people to afford housing. He chairs an Assembly committee focused on housing affordability.
He said that in his district, which spans from Imperial Beach to Del Mar, housing is the No. 1 concern, especially among the middle class, marking a shift from what he’s seen in the past.
“This is not just about subsidized housing,” Gloria said at a press conference Monday. “This is about housing that is affordable to people with jobs and in the middle class. … Those folks need a champion, too.”