The Blip on the New Civic San Diego Head's Affordable Housing Record

Civic San Diego

The Blip on the New Civic San Diego Head's Affordable Housing Record

The new head of Civic San Diego, Reese Jarrett, will be tasked with driving development in southeastern San Diego to boost affordable housing availability. When Jarrett was a developer in the area, his company and Civic San Diego’s predecessor failed to follow restrictions meant to do just that.

The new head of Civic San Diego, Reese Jarrett, is going to be tasked with driving development in southeastern San Diego to provide an influx of affordable housing.

When Jarrett was a developer in the area, his company and Civic San Diego’s predecessor failed to follow restrictions meant to do that very thing.

As a result, homes meant to be reserved for certain income brackets drastically increased in price.

For four years in the ’80s, Jarrett ran the Southeastern Economic Development Corporation (SEDC). When the state’s redevelopment program ended, SEDC merged with its downtown cousin, the Centre City Development Corp., to become Civic San Diego.

Jarrett left SEDC in 1986 to become a developer, a role he’s had ever since. One of his projects, the Village at Euclid, got a $200,000 loan from SEDC that came with restrictions to keep some of the homes in the hands of lower-income residents.

It didn’t work out.

Because SEDC and Jarrett’s company failed to comply with requirements in the loan agreement, two of those homes were sold for inflated prices and became unavailable to the residents they were meant for, and which justified the public investment in the first place, as reported in a 2006 Voice of San Diego investigation.

Jarrett acknowledged his company and SEDC failed to obey restrictions meant to keep some of the homes as part of the city’s affordable housing stock.

“There was a lack of coordination between the two entities,” he said. Eight years ago, he had refused to comment for the investigation.

Per the loan agreement, before Jarrett’s company could sell any of the homes, it had to coordinate with SEDC to file with the County Recorder’s office a document, called a covenant agreement, alongside the deed that would give SEDC final say over any subsequent sale of the home.

For 22 of the 23 homes, that document wasn’t filed, including for four homes that were specifically reserved for the first 10 years of their existence for residents with certain incomes.

When those documents weren’t filed, the agency lost its ability to monitor sales, and the price of homes built with public assistance for low- and moderate-income residents increased drastically, until they were out of reach of the residents for whom they were intended.

For instance, one of the homes reserved as affordable housing was sold for $181,000 in 2000 when it was brand new. The initial owners sold it three years later for $350,000. Two years after that, it sold for $399,999. It was flipped six months later for $499,999.

SEDC’s director at the time, Carolyn Smith, said Jarrett’s sales agents got ahead of her employees, which is why the documents weren’t filed, and that the agency learned from the administrative mix-up. Smith was later convicted of embezzling public funds while at SEDC.

SEDC, as the agency that provided the public loan, was ultimately responsible for enforcing the price restriction, Jarrett said. But Jarrett wasn’t just a developer. He was the former director of the agency responsible for meeting the requirements.

When he was in charge of SEDC — 10 years before he received the loan for Village at Euclid — the organization didn’t have enough money to strike such agreements, he said.

“We created that economic opportunity by the thousands of jobs that were created, and the hundreds of thousands of square feet of development that took place at Gateway Center, which was primarily what happened on my watch,” he said.

Faulconer’s office said both Civic San Diego staff and the mayor’s office fully vetted Jarrett before making the appointment and that he wouldn’t have been hired if they had any concerns.

Civic San Diego’s board will be discussing his compensation package at a closed-door meeting Wednesday. The City Council must confirm the appointment in the coming weeks.

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