Skip to main content









Donation Heart Ribbon

The Struggle To Build Low-income Housing


We'll look at how the San Diego Housing Trust Fund has provided funding for thousands of low-income homes in the 20 years since it was created, and the difficulty it is having to find continued revenue for the program.

TOM FUDGE (Host): In April of 1990, the San Diego City Council created the San Diego Housing Trust Fund. The object was to draw on several pots of money to maintain a fund that could be used to help build housing for poor and moderate-income people. In the past 20 years, it's been a success. It's created thousands of new homes and housing units. But the trust fund's several sources of revenue have dwindled to one. Today, it's becoming more and more difficult to patch together funding to build low income housing. During the coming These Days conversation we'll look back on the founding and the history of the San Diego Housing Trust Fund, and we'll talk about the challenge of building low income housing, and who are the people it's meant to serve. And joining me by telephone is Todd Gloria. He’s the San Diego City Councilman representing the 3rd District, and he’s a former member of the San Diego Housing Commission. Todd, thank you.

TODD GLORIA (Member, San Diego City Council): Good morning, Tom.

FUDGE: Even Becker joins me in studio. Evan is president of the San Diego Housing Federation. Evan, thanks to you.

EVAN BECKER (President, San Diego Housing Federation): Thank you, Tom.

FUDGE: And, listeners, if you have any questions, of course, you can call us at 888-895-5727, questions or comments, 888-895-KPBS. Todd Gloria, tomorrow at the city council meeting I think you’re going to recognize the trust fund’s 20th anniversary. Why did you want to make sure this anniversary was observed?

GLORIA: Well, I think it’s important for us to reflect on our successes as a city and the trust fund put us on the cutting edge when it came to affordable housing and now after many years of its implementation here in the city, we have a lot to show for it. We’ve leveraged $80 million in local funds to generate $900 million, 5600 units, really thousands of families touched, and we want to take a moment out of the council’s busy schedule to recognize that and celebrate it.

FUDGE: So that’s $90 million over the course of 20 years?

GLORIA: Yeah, $80 million out of the trust fund which has leveraged $900 million in private and other funds to create the housing that we have now on the street serving families today.

FUDGE: Evan, I think you were around 20 years ago when the trust fund was created. What was the purpose of it?

BECKER: That’s right, Tom. I was director of the Housing Commission at that time. And the late eighties, early nineties was a time when, I think agencies like the Housing Commission were seeing the mainstay affordable housing program, the federally aided public housing program, really ceasing. And this was an effort to try to develop other sources of capital that could be devoted to the creation of affordable housing, not on its own but, as Todd said, to use it as seed money and, in most respects, to leverage other private capital to get affordable housing built.

FUDGE: And follow up on that by telling us a little bit more about how low income housing, subsidized housing, is financed because you have some money from the Housing Trust Fund but it sounds like you have to put it together with lots of other sources of revenue.

BECKER: Well, again, since we’ve emerged from the era of government housing, if you will, with the federal government financing public housing with government money, we’ve really now come into an era with largely private capital supporting affordable housing development. But that has to be married with subsidy capital to provide what we refer to as gap financing which creates the rent discounts and the affordability of the development. So it’s – there’s a large proportion of private capital involved but, really, to attract that private capital, the key dollars are really those gap financing dollars such as are provided by the housing trust fund.

FUDGE: And what exactly does the housing trust fund provide for? I think there’s several things ranging from housing for the homeless to renovation of single family homes. Todd, would you like to address that?

GLORIA: Yeah, absolutely. It’s true that it’s a mix and so I appreciate you bringing it up. I mean, over the 20 years, we’ve seen 5600 units of affordable housing rental units created but we also have 2000 single family homes, low income families whose homes have been renovated. We’ve assisted 1200 low income, first time home buyers to buy a home here in the city of San Diego. We help maintain 600 transitional housing units for special needs groups, folks like the homeless, domestic violence victims, veterans, the mentally ill, so, you know, it’s a real – a full spectrum and while it’s not perfect and it certainly hasn’t – there’s certainly a lot of needs that are still left out there in the community, I would shudder to think what we wouldn’t have if we didn’t have a trust fund.

FUDGE: So transitional housing is the kind of housing that people go into with the idea that eventually they’re going to find something else.

GLORIA: Exactly. You know, it’s a housing first approach, the notion being that say, for example, if you’re homeless and on the street, you know, trying to deal with, say, a substance abuse problem or mental illness, how are we ever going to get you better if we don’t get you housed, you know, on a regimen, on a schedule that allows you to take your medications, get counseling, get job placement. It’s an approach that helps really get people effectively off the street.

FUDGE: Evan, one of the things that’s nice to do when you talk about programs like subsidized housing, which can be kind of complex and a little bit bureaucratic, is talk about the people that we’re trying to help. Who are they?

BECKER: Well, it’s a great question because we tend to get caught up in talking about units and dollars and leveraging but these are really stories about people and families and – and many, many, many stories involved with these thousands of units. But there are several key themes there and, you know, but the themes are essentially social and economic mobility and stability that’s provided for families. And that can mean, for example, thinking of the transitional housing program, you know, we’ve got examples of a woman, for instance, in the Father Joe’s Villages that was a substance abuser and homeless and went from there through the transitional program, was able to stabilize herself, now works for the San Diego Trolley and is in permanent housing.

FUDGE: When you provide someone with housing, what are you providing to them? What kind of opportunity are you providing?

BECKER: Another good question. It’s – the dollars and cents of it are affordability. I mean, the way the trust fund’s targeted, the typical affordability impact is to create anywhere from $400 to $800 a month in savings or have a family or an individual taken out of a situation where they’re in substandard housing or they’re doubling or tripling up with other families. But that’s only the start of it. What it means in terms of their mobility, it means more disposable income for transportation, ability to get to a job, educational support for their children, healthcare, clothing, all of these things. The housing is the foundation but, really, the affordability of that housing, it’s linked to many, many other things that create family stability and upward mobility.

FUDGE: Todd Gloria, anything you want to add to that?

GLORIA: Yeah, I’d like to hop in on that because I think Evan’s right on point. One of the things that I think folks forget is just exactly who is helped by affordable housing. Many of your listeners may not realize that a family of four in the city of San Diego, if you make $62,800 a year or less, you qualify for affordable housing. And that’s a pretty substantial wage but it’s reflective of the high cost of living in our community. So we’re not talking solely about those who need special needs, the homeless, the mentally ill, but we’re also talking about working families, we’re talking about the folks who, you know, work in our schools, who work in our neighborhoods and our communities and without the trust fund, many of these folks could not live in San Diego. And I think a vibrant, exciting 21st century city needs people of all walks of life, not just the really wealthy and those who are served by them or the working folks who serve them. And we need to have a balanced community and the trust fund helps us accomplish that.

FUDGE: Todd Gloria is a San Diego city councilman. Evan Becker, who joins me in studio, is president of the San Diego Housing Federation. We’re talking about the San Diego Housing Trust Fund. Call us if you would like at 888-895-KPBS. Excuse me, Evan, the source of funding that is now devoted to the housing trust fund is linkage fees. What are linkage fees?

BECKER: Linkage fees are a development impact fee charged to new commercial development, could be office buildings, hotel, research and development buildings, warehousing. It is a – it currently ranges – it’s charged on the basis of the square footage and ranges from, I believe twenty-seven cents a square foot to a little over a dollar. And what – the concept of a linkage fee and the reason it’s called linkage is it – we’re extremely happy to have growth, commercial development and job growth in the community but, as Todd mentioned, the reality, especially in San Diego, is that we’re creating a very large proportion of jobs that involve incomes for families and individuals that don’t allow them to afford our housing, so there’s the creation of a housing issue and the need to do something about it and, thus, the linkage fee is charged to help support a program that does that.

FUDGE: Now some documents that I think were sent to me by your staff, Evan, tell me that in the coming fiscal year, the housing trust fund is expected to raise about $4 million. Is that what people had in mind, that amount of money, when they first created the housing trust fund 20 years ago?

BECKER: No, in terms of a permanent sustained source of support for affordable housing, no, it was envisioned as something being far larger than that. But there are, you know, political realities as well as economic realities. One reason the fees are as low as they are today, they’re about half of what they were not too long ago, out of respect and recognition of the economic times we’re in, so that’s reality. But those are – those fees are being reviewed again by the commission and the council and will be dealt with. The reality is we need far more than four million dollars to really make a dent in this problem we have.

FUDGE: And, Todd, Evan said that the problem of the fees or the low fees will be dealt with. Are they going to be dealt with?

GLORIA: If I have anything to do with it, yes. We have our city auditor issued a report last year noticing that we haven’t really been following the law here at city hall. We were supposed to update our linkage fees annually and they haven’t been updated since 1996 when they were cut in half. And so we’ve gone a number of years charging nineteen – mid-nineties prices for 2010 costs, and we need to update that in order to make sure that we are gaining the dollars that we need to put housing into our community. And so we have, through my committee, we’ve established a task force of industry and affordable housing advocates, construction, builders and to try and figure out what’s the right price for 2010 in recognition of the difficult times that the construction industry is in but to note that, you know, we’ve gone a good number of years, about 14 years, without looking at this fee and, again, that’s in violation of our municipal code, so we need to go back and fix that.

BECKER: And just to piggyback there, one thing to make very clear in terms of the – actually, the concept back in 1990 as well as, I think, the concept going forward, is that the linkage fee, one of the tests that is applied is to ensure that it is not having a constraining or restraining effect on the development we want in this community.

FUDGE: Right, I’ve been trying to imagine, you know, what would a developer say? If you were to raise the linkage fee, they would say, well, we’re trying to create jobs, we’re trying to create business here and you’re raising our taxes. Right?

BECKER: That’s right. And in fairness, when you’re a developer and you have a project—and I’ve been there myself—you’re concerned about your project and balancing your sources and uses of funds and feasibility and so on. But, again, even when it comes down to an individual project, I think what the federation would certainly support is that a fee – we believe that a fairer range of fees can support a much higher housing trust fund pool of dollars and at the same time involve a de minimis impact on new development.

FUDGE: And, Todd Gloria, back in the old days, the housing trust fund, TOT dollars, hotel tax money, used to go into the housing trust fund. Is there a chance that something like that might happen in the future?

GLORIA: Well, you know, I think Evan earlier mentioned some of the political realities involved in this conversation and as we look at the convention center expansion and other needs in the community, it may be difficult to dedicate funds like those for affordable housing. But like Evan, I would like to see, you know, other sources of funds. We can’t be over-reliant on just one source, in this case linkage, that is susceptible to the economy because we need to have a sustained production of affordable housing units for San Diego. But going back to the city auditor report, you know, if you look at his report, he notes that by not updating the fees for the last 3 years, the trust fund has lost out on approximately $3 million. And so there’s a real cost to not following our municipal code and I think the stakeholders group that we’ve put in place is going to be sensitive to the needs of industry. We want to create jobs, we want to put people back to work, but as we do that we want to make sure that development that creates low wage jobs does also create affordable housing units to allow people to live in this community.

FUDGE: And Todd Gloria’s the San Diego city councilman. Evan Becker is president of the San Diego Housing Federation. Evan, I think you wanted to throw in one more thing.

BECKER: Well, yeah, I think Todd was getting into something that’s very important. In terms of jobs, in this sort of day of stimulus emphasis, can’t forget that affordable housing and – is one of the greatest job producers and stimulant programs that we have and, in fact, the housing trust fund production has resulted in thousands of permanent jobs as well as thousands of construction jobs just in and of itself.

GLORIA: That’s exactly right. You know, if you look around the city of San Diego today, most of the construction underway, if it’s residential construction, is probably affordable housing. So – And it’s been a good boost to our local economy to have this trust fund.

FUDGE: Evan, who builds affordable housing? Who builds subsidized housing?

BECKER: Well, our members do. Glad…

FUDGE: Members of the…

BECKER: …you asked.

FUDGE: Members of the San Diego Housing Federation.

BECKER: Yeah, and it’s interest – just to drop back to 1990, one of my favorite parts of the trust fund is a very – or a relatively small component of the trust fund was devoted back then to what we called capacity building. If you look back 20 years, this city, aside from the housing commission, really had no affordable housing development infrastructure, did not have any capacity to do this. Today, we have probably one of the foremost cadres of affordable housing developers, both for profit and nonprofit, of any city in the country, fully capable of using tens if not hundreds of millions of dollars to tackle our affordable housing needs. So – And along with the building of our capacity of this group, the federation has organized them. The developers of affordable housing are our core members along with their development teams but our public agencies and advocates as well.

FUDGE: There – we’ve talked about the housing trust fund. There’s also the inclusionary housing trust fund. Those are the in lieu fees, Todd, that…

GLORIA: Uh-huh.

FUDGE: …that developers can pay if they don’t create affordable housing in their housing developments. But what is – where does most of the financing come from? Maybe this is a question for you, Evan. Is it from the private sector?

BECKER: It is from the private sector. In what I always call the new era of affordable housing, the typical structure, if you will, capital-wise for affordable housing development is largely private capital, both debt and equity, coming from private sources, large banks in terms of the Low Income Housing Tax Credit program, which is the – That is the engine in this country for providing private capital. It typically, if you looked at our typical San Diego affordable development, the Tax Credit program and the investment by corporate investors through that program is probably providing 60% of the…

FUDGE: The majority.

BECKER: …of the development cost. And – But, again, the key is you don’t attract that capital, you don’t attract the private debt capital without that key gap financing such as what the housing trust fund provides.

FUDGE: You know, over the past few years, over the past, I guess, four years, we have seen a decrease in the value of residential housing in San Diego. The housing market, which was booming, went bust. I’m wondering, Todd, has that been a good thing for poor people who are looking for housing? Has San Diego become a bit more affordable?

GLORIA: Well, certainly from a price perspective it has but if you are a working family in San Diego, the access to capital has kind of wiped out any benefit of the lower prices. You know, we hear constantly from my constituents that they’re having difficulty finding financing that, you know, as banks become more restrictive on lending, that they just haven’t had the opportunity to go out and find that home and be able to finance it. Additionally, we know there’s a lot of real estate speculation going on, you know, all-cash offers that are taking, you know, a family, you know, a couple who’s maybe looking to buy a starter home somewhere in, say, City Heights, that they’re really being beaten in the market by some speculators and by folks paying all cash. So the prices falling have been helpful for those looking to enter the market but the lack of capital has been just deadly.

FUDGE: Anything from you on that, Evan?

BECKER: Well, that’s right and for the key segment that the trust fund deals with, aside from home ownership, the rental category, we just have not seen rents fall at least not in any way significant enough to create much greater affordability for our people.

FUDGE: Todd Gloria, not long ago the San Diego City Council passed the Inclusionary Housing Ordinance. We’ve been talking about the housing trust fund. The Inclusionary Ordinance, I believe, said to developers if you develop in the city of San Diego, you have to make a certain percentage of your development affordable housing. What can you tell us about how well that has worked?

GLORIA: Well, I think it has worked well. I mean, it could use some improvements. There are criticisms from those who say that, to me, the developers pay the in lieu fee and don’t actually construct the units. But the fact is, those dollars are brought down and we’re able to leverage them with the things like the housing trust fund to create more units. I think that the real benefit is the balance nature that this creates, that you see affordable housing in all corners of San Diego because of the Inclusionary Housing. You know, so often there’s a criticism that we concentrate affordable housing in particular neighborhoods but, you know, if you look at, you know, projects like Torrey Del Mar, which is up in Torrey Highlands, or Mission Terrace Apartments in Mission Valley, you know, we are creating units outside of those traditional communities where affordable housing has been concentrated and really opening up opportunities for the families that live there. I mean, think about folks living up off of the 56 who can send their kids to the schools that are in those neighborhoods, you know, really changing those lives forever. And so the Inclusionary Housing Ordinance not only is a source of funding to help us create units but it also helps actually put units on the ground and often in communities where we haven’t been able to put units in.

FUDGE: Well, with that, let me thank my guests during this part of These Days. Todd Gloria is the San Diego City Councilman representing the 3rd District. He’s also a former member of the San Diego Housing Trust Commission. Todd, thank you.

GLORIA: Thank you, Tom.

FUDGE: Evan Becker is president of the San Diego Housing Federation. He joined me in studio. And, Evan, thanks a lot.

BECKER: Thank you, Tom.

FUDGE: And thanks very much to those of you who listened. And I’m Tom Fudge. Stay tuned. When we return, Maureen Cavanaugh will lead a discussion about early Alzheimer’s disease. That’s coming up on These Days. We’ll be right back.

Want more KPBS news?
Find us on Twitter and Facebook, or subscribe to our newsletters.

To view PDF documents, Download Acrobat Reader.