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Experts See 'Perfect Storm' Descending On San Diego Housing Crisis

August 23, 2017 1:29 p.m.

Experts See 'Perfect Storm' Descending On San Diego Housing Crisis


Andrew Bowen, metro reporter, KPBS News

Related Story: Experts See 'Perfect Storm' Descending On San Diego Housing Crisis


This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.

This is KPBS Midday Edition. I am Maureen Cavanaugh. San Diego was in the midst of the worst housing crisis with low vacancy rates and rising rents and a growing number of people living on the streets. As bad as things are, they are likely to get worse. Thousands of homes are set aside for low income people are set to become market rate. Struggling renters could see housing cost skyrocket. Andrew Bowen says experts are calling it a perfect storm.I'm at the home of [ Name indiscernable ]. Her living room floor is covered in boxes.You can see -- see?In the Philippines ?Yes.She is 92 and has lived in the United States for 27 years. The boxes are full of memories and mementos that she does not want to lose. She is sending this back to relatives in her native Philippines.We do not know what will happening here. I cannot bear the pain. But she does not know what will happen because there is a plan to develop her home and the homes around it. Lennar homes wants to build townhomes, condos and apartments. Cayabyab depends on Social Security and a housing voucher to pay rent. If the redevelopment plan is approved, new homes are expected to be expensive and the current times. Cayabyab will be priced out of the neighborhood.[ Indiscernible ]. The neighborhood is good.She likes it here. It is a good neighborhood with no crime. The plan to demolish the homes has been years in the making. An agreement to keep the homes affordable for low income people expired in 2010. With skyrocketing housing prices, the property owner can make a lot more money renting nicer apartments to wealthier tenants. And Wilson is a vice president of community housing works, a nonprofit developer based in Sandy go. Because funding for low income housing has been inconsistent over the decades, a lot of affordability restrictions are about to expire all at once.When they expire, the owner has the ability to sell the property at a great prophet. Whoever comes in there can raise the rent. For the owner can raise the rent. There is no protection to the tenants.Of the 32,000 affordable homes in San Diego County, 7% are set to lose affordability agreements with them five years. Within 10 years, that jumps up to 14%. That represents thousands of people, seniors and the disabled and working-class families. They are risk of eviction or homelessness. And Wilson says this is coming at the worst possible time.There is a perfect storm happening with the HUD expiration happening and the tax credit expiration happening at a time when we have the worst housing crisis that we have ever experienced. If we had lots of vacancies and low rents, it would not be such a bad thing. People could go somewhere else but we don't. There is nowhere else for people to go.Housing production has not kept pace with population and job growth. Bicep played out in Bay Park as residence resist new homes coming into their neighbors. Wilson says this hurts the economy, schools and our mental health.If you are on the edge and have very little money, you were not able to give your family what you want. That hurts all of us.At her home in Rancho Penasquitos, Cayabyab is concerned about future.What kind of life can we have? What kind of life will we have ?What kind of life is waiting for me?I have no place to go.I have no place to move. The plan to redevelop her neighborhood goes before the city Council later this year.Andrew Bowen joins me now. Hello, Andrew.Hello.Can you explain the affordability agreements that are expiring ?The federal state and local governments have programs to incentivize building affordable or low income housing. Those programs have changed, depending on who is running the government. Sometimes they are funded and sometimes they are not. Some programs in the 1970s included affordability agreements that lasted 40 years and it is later and they are expiring. In the 90s, we started a new program with tax credit and many of those were restricted for 20 years and those are expiring as well. The situation is a cascade of expirations that are happening because of decisions that were made decades ago.What makes a designated affordable housing? Is there a form attached that? The official definition of a affordable housing is when a person pays 30% or less of income on housing for rent or mortgage. Affordability differs depending on how much money you make. It is different from Saturday making six figures depending on Social Security. That is shorthand for low income housing. That is when a home is reserved for someone who makes 80% or less of that median income. In San Diego, that is $73,000 per year for a family of 4. A landlord cannot charge more than 30% of that income level of the tenant. The tenants have to show proof of income to get into the units and the rent is monitored by the government in some form.Before the expiration of the agreement, the landlords were forbidden from raising the rents. Let's say Pensquitos Village.It was built in 1970. They opted into a federal program that offered a good deal on a mortgage if you agreed to keep your rent at affordable levels. That agreement expired seven years ago. The landlord was able to raise the rent. What happened was tenants were given section 8 housing vouchers. The owner agreed to accept them. The tenants were allowed to stay in homes. That kept things the same for a while but now with the market the way it is, there are so much money to be made on housing and rental properties that from an economic standpoint, it is understandable that a property owner would want to redevelop their property because there is no will financial incentive not to.You say the plan goes before the city Council this year. What role does the government play whether they can replace affordable housing ?The local government has leverage in terms of permits and zoning laws and depending on how closely they adhere to the rules, per meeting can be easy and quick or it can take a long time. The rules in the books make it difficult to turn a profit for developers. That is why so many go through longer approval processes and the city Council could reject this project. They have that discretion that risks sending a mixed message to developers in the city. The city wants more housing. They want to increase the supply. It would increase the competition on landlords to fill the units and it would lead to a higher vacancy rate this does have a net increase of housing units by more than 200 housing units. Citywide perspective, the city sees this increase and it is a good thing. It is eliminating some housing that is with low income people.They are considering a package. When any proposal ease the affordable housing crisis in San Diego ?It would by the fact that there would be more money available. There is the State Senator who proposes charging real estate transaction fees and that would be a consistent source of funding for affordable housing. There is a bond that would possibly be voted on next year. Those would help San Diego by making more money available to the people who want affordable housing. The third bill that is talked about would streamline the approval process for houses and ditties that are not meeting housing goals. That has included San Diego. It would make it easier for developers to build more housing and increase competition and increase the vacancy rate.The HUD funded and that tax cuts are presumably expiring across the state. Are there any special issues San Diego faces in trying to meet the Tauzin challenge ?There are. They have two compete with other cities for a limited pot of money. One challenge we face is the lack of local dollars that are spent on affordable housing. Last year, Los Angeles voters approved a property tax increase. The state and federal agencies are more likely to give money on the Mac project if there is local funding available. Not having funding available is at a competitive disadvantage. Another challenge is the lack of a robust transit system. Low income people are more likely to depend on public transit. The state likes projects near transit because they have more opportunity and it reduces greenhouse gas emissions if they write mass transit. Comparing them to the bay area, increasing Los Angeles which is ongoing and expansion in the transit system, San Diego is at a competitive disadvantage as well.I have been speaking with Andrew Bowen. Thank you.You are welcome.