Where do developer fees for bypassed low-income housing units go?

News UNVEILING THE UNSEEN

Not All Developer Fees Go Directly to Affordable Housing

Developers building in San Diego have a choice: They can set aside 10 percent of the units in their projects for low-income renters, or pay a fee to help build them elsewhere. But not all of the money goes directly to affordable housing, a VOSD analysis found last year.

The Housing Commission invested $1.3 million in inclusionary housing fees in the downtown Hotel Churchill project, which also relied on other funding streams to support 72 affordable housing units for formerly homeless people. / Photo by Dustin Michelson

This story is a part of The People’s Reporter, a feature where the public can submit questions, readers vote on which questions they want answered and VOSD investigates.

The question from VOSD reader Michael Castro: “Developers who want to build multi-family housing pay a fee to not provide affordable housing. Does that money actually go to build affordable housing?”

 To submit your question or vote on our next topic, click here.

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More than a decade ago, the city started giving developers an option: They could set aside 10 percent of the units in their projects for low-income renters, or pay a fee to help build them elsewhere.

Last year, Voice of San Diego found the fund had collected about $120 million from San Diego developers.

At that time, the city had put that money toward more than two dozen housing projects, helping to subsidize more than 2,000 affordable-housing units. Another 775 new homes were in the works thanks in part to developer fees associated with the city’s so-called inclusionary housing program.

But not all of the money goes directly to affordable housing.

Nearly a quarter of the $85 million in funds doled out in the last 15 years has supported programs to aid first-time home-buyers and homeless San Diegans, or covered administrative costs at the San Diego Housing Commission, the agency that oversees the money, Lisa Halverstadt found. Those efforts address some of San Diego’s overarching housing issues but are not directly tied to affordable housing.

This is allowed under the current policy, but City Council Democrats and labor leaders have suggested changes.

City Council President Georgette Gomez has said she’d like to spur more affordable housing development, particularly within projects already in the works. She plans to propose an update to the inclusionary housing policy this year with that goal.

Read more here, and if you have a question about San Diego and are itching for an answer, submit it below.

Listen to VOSD’s Lisa Halverstadt and Adriana Heldiz discuss the topic on a recent episode of the VOSD Podcast.

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