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Lowering Developer Costs Alone Won't Fix the Housing Crisis

City leaders cannot solve San Diego’s housing issues with any single approach. The city needs a more comprehensive solution.

The average price of a home in San Diego – almost $570,000 – is out of reach for most residents and has been for many years. Rental costs are also out of proportion, with over half of renters spending more than a third of their income on housing. These problems constitute a genuine housing crisis, because of the myriad negative effects: Businesses and bright minds are forced to relocate, urban sprawl exacerbates transportation issues and environmental concerns and people who have grown up here cannot afford to stay and raise a family.

Given this problem’s complexity, it is important that city leaders have an honest, innovative plan for addressing it. It is not enough to simply propose to reduce development costs. City leaders cannot solve San Diego’s housing issues with any single approach. The city needs a more comprehensive solution.

To start, the city should continue to explore innovations in development practices and planning in order to optimize growth. Updating the technology currently used for reviewing new housing developments could speed up the process, reduce costs and make housing more affordable. The city could also establish a partnership with UC San Diego and other local universities to create a competition modeled after the U.S. Department of Housing and Urban Development’s annual competition that asks urban planning, architecture and finance students to develop a plan to address our growing housing needs through new research and innovations emerging from these academic fields.

Similarly, thanks to innovative planning and a new sense of urgency from the local and global scientific research communities, the era of urban sprawl may be coming to an end. San Diego’s political leadership appears committed to addressing climate change, and, as a result, the city’s Climate Action Plan foresees half the local population switching to alternative transportation within the next 20 years, creating opportunities for transit-oriented developments.

In addition, most developable land in  San Diego has already been utilized, which is one driver of the high cost of housing development. Since the city’s potential for outward growth is limited, San Diego’s leadership must work with communities to identify areas where we can create walkable neighborhoods favored by the majority of young housing consumers. The city should also identify surplus public land suitable for development, which can be leased or sold for development of affordable housing.

These actions will have to be in concert with community plans to ensure neighborhoods are engaged in this process, since an increase in density is not always a good thing (think One Paseo, a 23-acre project in Carmel Valley that would require changing the community plan). Where higher densities are allowed, developers should be required to include a certain percentage of affordable units in each project, or provide funds to develop such units offsite.

Current residents understandably do not want to see wholesale changes in their communities. The key to making new development welcome is linking it to community benefits, which gives residents good reasons to support reasonable growth. These incentives may take the form of new parks, street improvements or convenient transit services and would be identified by residents through the planning process, based on more effective interaction between city planners and the community. The community benefits should be delivered before or concurrently with new development.

An additional area for improvement in this vein is the appropriate regulation of short-term vacation rentals. The nonprofit Save San Diego Neighborhoods has estimated that over 6,000 properties in San Diego have been converted into permanent mini-hotels, which is disruptive to communities and needs to stop. Just ask anyone who lives next to one. Viewed in terms of affordable housing, these 6,000 homes are essentially removed from the rental or home purchasing market, directly contributing to the housing shortage.

One further concern for San Diego’s affordable housing stock is that thousands of lower-income units have been lost, and continue to be lost, through conversion of residential hotels and single-room occupancy buildings into higher-priced apartments. Others are simply being demolished and replaced with more upscale housing. While developers should be allowed the flexibility to build in ways that maximize their return on investment, it is also critical to maintain the number of low-income housing units, especially in the downtown core. When older units are replaced, it should be predominantly with affordable housing.

Fees for developers are intended to ensure new development is well planned and complies with environmental and building standards. However, the regulatory process needs to be and can be streamlined without compromising these standards, and San Diego can learn from the best practices of other communities.

In discussing these issues, it is important to remember that the housing crisis cannot be solved entirely at the local level. Reforms in state planning laws would ensure more efficient local land use practices and simpler environmental reviews for affordable housing. In addition, the city and county should aggressively seek their fair share of funding from state and federal housing programs, and then leverage those funds as much as possible with private investment funds.

San Diego’s housing crisis has developed over many years, and it will not be eliminated overnight. Action must be taken now, or San Diego housing prices will continue to rise exponentially, pushing out our rising talent and families to more affordable cities. By taking common sense, comprehensive steps like those described above, we can begin to solve the problem and place San Diego on the path to a more economically sustainable future.

Barbara Bry is a high-tech entrepreneur and candidate for San Diego City Council District 1. Bry’s commentary has been edited for style and clarity. See anything in there we should fact check? Tell us what to check out here.

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