It’s high time to ramp up public housing construction
The solutions are simple. Achieving them is not. More money and land are needed to address San Diego’s affordable housing shortage.
The San Diego County Grand Jury issued a report this week about the housing picture across the region and recommendations on how to improve it.
The report’s bottom line is more public and nonprofit housing projects are needed.
The grand jury suggests increasing taxes and issuing bonds to finance housing and building projects on public land owned by government agencies and school districts, as well as on property owned by religious institutions.
That has been happening increasingly in recent years by government agencies and nonprofits, but not to game-changing levels that will provide enough housing for lower- and middle-income residents now and in the future, under current projections.
The report does not suggest that public and nonprofit efforts replace private, market-rate housing development. But the market-based approach, despite a plethora of incentives from state and local government, is not getting the job done.
The Legislature and some local governments — like the city of San Diego — have approved density bonuses, lifted zoning restrictions and height limits, streamlined regulations and made it much easier to build backyard accessory units — actions cheered by housing advocates and criticized by some neighborhood groups.
So far, studies have shown such government policies to encourage more private development have, for the most part, resulted in only incremental increases in housing. But the laws are fairly new and have yet to fully take hold.
The shortage of housing, particularly for lower- and middle-income residents, is acute. The U.S. Department of Housing and Urban Development defines “affordable” as housing that costs no more than 30 percent of a household’s monthly income.
Every eight years, state law requires regional goals be set to meet the housing need. Virtually all cities in the county fail to meet those goals, which are broken down into the number of units for very-low-income, low-income, moderateincome and above-moderate-income residents.
In the recent round of the state’s Regional Housing Needs Assessment, only Lemon Grove met its goal in each of those categories.
Last year, 9,642 homes were built in the county, compared with 10,163 in 2021, according to Phillip Molnar of The San Diego Union-Tribune.
The San Diego County Building Industry Association estimates the region needs more than 21,000 new homes annually to make up the shortage, Molnar wrote.
The county grand jury is charged with, among other things, examining local government policies and operations to see if they can be made more efficient and effective.
In its report, the grand jury suggested the San Diego region should seek more public financing and public land for housing. The report noted some efforts are being made in that direction.
The San Diego Metropolitan Transit System and the North County Transit District are in various stages of developing housing on property they own or control.
Last year, voters in the San Diego Unified School District approved Measure U, a bond proposal that included $206 million to purchase or build housing for teachers and other staff, along with related facilities.
Other local government agencies have taken similar steps.
But some efforts have fallen short. In 2020, a $900 million housing bond measure backed by the San Diego Housing Federation was defeated. Measure A was popular, gaining 57.6 percent of the vote. But a two-thirds approval was needed.
The federation is contemplating taking another swing at next year’s ballot, but with a proposed transfer tax on higher-end residential and commercial real estate transactions to raise money for housing, according to the Voice of San Diego.
Meanwhile, legislation by state Sen. Ben Hueso, D-San Diego, to create a regional housing agency in San Diego with the power to raise taxes and fees and issue bonds for housing failed to advance last year. The grand jury noted bills creating similar agencies in San Francisco and Los Angeles had passed in recent years.
Among its recommendations, the grand jury said local agencies should continue to support legislation to create such a public financing entity.
The report noted that redevelopment agencies once provided funding for housing, but that dried up after Gov. Jerry Brown started shutting them down a dozen years ago. Redevelopment agencies were designed to turn around blighted areas and fund housing, but Brown said they were misusing tax funds. Meanwhile, he used the money to help fill a gaping hole in the state budget.
“As a result, some local and regional governments elsewhere in California have either issued or are planning to issue bonds to assist in the development of affordable housing,” the report said.
As an example, the grand jury pointed to a $950 million housing bond measure approved by Santa Clara County voters in 2016.
The report also noted that some governments have turned to raising taxes and fees on businesses and developers. The grand jury highlighted the city of Seattle, which in 2021 began requiring businesses to pay a tax on high-salaried employees to help fund housing.
The grand jury mentioned that the city of San Diego and other local jurisdictions charge a “housing impact fee” on commercial development for affordable housing.
Beyond San Diego Unified, the report said various school districts and at least one University of California campus have taken actions to create workforce housing.
The grand jury also pointed to the relatively untapped potential of building housing on church land. A 2020 study by the Terner Center for Housing Innovation at UC Berkeley concluded the state has nearly 40,000 acres of land used for religious purposes that are “potentially developable.”
The “Yes In God’s Back Yard” movement has created momentum to build projects on such property. But the Terner Center said limited financing, regulatory hurdles and lack of real estate knowledge have presented challenges.
State legislation to reduce regulations on developing church land has been stymied in part by disputes over pay and other conditions pushed by some unions. Sen. Scott Wiener, D-San Francisco, again is proposing such changes in Senate Bill 4.
Regardless, the grand jury’s overarching conclusion is that local government agencies in San Diego County need to work with school districts, community colleges, transit districts and religious organizations to develop housing.
That kind of collaboration exists, but a lot more is needed.