Opinion: How we made San Diego the least affordable US housing market

Townhouses under construction
New townhouses under construction in Tampa, one of the country’s booming housing markets. REUTERS/Octavio Jones

San Diego elected officials and government bureaucrats have been working on affordable housing for years, but unfortunately their efforts have been largely unsuccessful. San Diego is now at the top of the list for having the most unaffordable housing market in the country.

This can be good news for homeowners who have seen their property appreciate in double digits year after year. Many San Diegans are sitting on a million dollars or more in equity. But for those entering the housing market, things look bleak.

If San Diego can’t build enough housing for the people who can afford it, how are we going to handle the homelessness crisis? San Diego’s affordable housing dilemma is a self-inflicted supply and demand problem.

As voters passed costly school bond initiatives and politicians lobbied for costly climate action mandates, the cost of building homes in San Diego has gone uncalculated for many developers. Even when affordable housing projects were proposed, neighborhoods fought vigorously against them with a NIMBY attitude.

The desire for good schools and a workable climate action plan should have been balanced with the need for affordable housing. But it appears that elected leaders and the public may not have fully understood the unintended consequences of imposing large mandates on landowners.

One of the most damaging factors in San Diego’s affordable housing crisis has to be the city’s expensive and slow permitting process. In order to start building affordable housing, the local government needs to take bold steps and waive or drastically reduce building permit fees on housing projects.

While permit fees serve an important purpose, they can also add up. The local government should create a fee waiver system for developers of eligible affordable housing projects.

Developers could submit a waiver request to the city, along with documentation proving their intention to comply with the eligibility requirements. Once the application has been approved for an eligible project, permit fees are waived, reducing construction costs.

Elected leaders must also refrain from implementing new mandates and should consider reversing any that have already been implemented. Local government cannot control the cost of building materials, but has the ability to manage regulatory costs and make homes more affordable by waiving permit fees and streamlining the construction process.

We also feel the unintended consequences of rent control. The government’s default solution to making housing affordable has always been rent control, but this is making homes even less affordable as frustrated landlords pull their properties off the rental market, further limiting housing supply and driving up rents . Removing private property rights and imposing rental restrictions on landlords were ill-advised attempts to solve the housing and rental crisis, yet these measures became law.

One of the groups hardest hit by the housing and rental crisis is aging baby boomers. By 2030, there will be around 9 million people between the ages of 66 and 84. Most will be on a fixed income and will need some form of affordable housing. San Diego lacks affordable housing to meet the needs of our growing senior population and local government needs to do much more to increase supply.

Granny’s apartments can be used to help make rents more economical for service professionals, such as teachers, police officers and nurses – anyone earning an average salary in San Diego – without significantly changing the neighborhood . However, many communities oppose the recently enacted Senate Bills 9 and 10.

The first bill allows any residential land to be subdivided, allowing four houses to be built on land currently zoned for one house. In some cases, six houses will be allowed. The second bill allows city councils to unilaterally increase density near jobs or transit sites and allow a 10-unit project with four granny flats on land where a house previously stood.

Although these laws were designed to help manage the housing crisis, there remains considerable opposition.

Rather than knee-jerk reactions or flawed legislation to deal with the housing crisis, real solutions are needed, such as reducing or eliminating exorbitant permit fees, avoiding additional climate action mandates, streamlining of the authorization process and the incentive for the construction of secondary accommodation.

One thing is certain: everything our elected leaders are doing to make housing affordable in San Diego is not working.

Mark Powell is a real estate broker and former member of the San Diego County School Board.

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