San Diego's Housing Crisis Affects Middle-Class And Poor Communities
Will know that buying the home is a single biggest purchase someone would make. But in San Diego it is really big for people. That will be discuss this Friday at the 20th annual real estate conference at USD. The market rate housing concerns people trying to buy and rent in San Diego. It is a not about to get better. A white paper tells the story about San Diego's housing market and needs to grow and change to make it more affordable. Joining me is 1021 -- tran40 -- Gary London, president, The London Group Realty Advisors. If your active in the city with the housing commission you are providing housing for truly poor or moderate needs of people. That is affordable housing. Housing that is affordable is the hold -- heart of the housing crisis in San Diego. When you talk about market-rate housing you are talking about the kind of housing that does not come with a government subsidy but the housing that perhaps people who live in San Diego would be able to afford? Right. The problem today is the lack of affordability for market-rate housing has reached in my opinion crisis proportions. What is the median price for a home or condo in San Diego? Three single-family home it is approximately 530? Three single-family home it is approximately $530,000 and a condo is $330,000. And that median means half are higher in half are lower priced? Right. So if a couple has with income of $90,000 a year can they buy a single family house in San Diego? Not a chance. They can't buy one along the coast. If they are interested in a single-family home they would have to go far inland or part of the county that is out of the big San Diego market. Houses can go out there and become affordable. The 10-mile stretch of the coastline is unaffordable at that income level. We have a demand for housing based on recent population increases and household increases. That is projected by the San Diego Association of government for the next 30 years for approximately 9000 to 10,000 housing units. Last year we delivered almost that many units. Most work apartments. All of the previous years we have delivered at half that level. So you don't have a chance except a spike your like last year to come near meeting the supply that is demanded in San Diego County. So that bid up the price of all housing. Couple that with the fact that it's very complicated to get permission to build and the fact maybe we are not even building the right housing to accommodate the young families going forward. That is where it becomes a crisis. So some of the largest single to them but -- development have been held up because of the county's general plan that wants to preserve areas of San Diego from development. Is there a compromise that you see in those two conflicting points of view? Yes. I think everything above planning is compromise. I think the county general plan, the written flocculation -- proclamation undeveloped land set the bar very high. Development should be allowed to occur. It is not black or white . It is not no development or a lot of development. It is the right kind of development. The unincorporated area is a very important part of the conversation because we are out of developable land in the county with the exception of the South County. Most of the demand has gone north over the years and will continue to and we are out of that land. So we have to have conversations about unincorporated land in the county. The county will and can accommodate. The problem is not the plan but push-back in the communities. It seems there is an assist in high-density housing. But your white paper doesn't seem to be very enthusiastic about that change. Why not? We like that San Diego projects that the city will allow enough housing over the coming years to meet the accounts of 330,000 new households. Over 80 percent of that accommodation will be in the urban areas. The disconnect is that most of our growth will be by young families, millennial coming of age and starting to raise kids. I don't think they will be happy and condos or apartment. That is where the crisis line. There is a real estate conference on Friday. But the leaders will be speaking about emerging trends in real estate. Isn't high-density housing and smaller living spaces a trend nation-wide? It has been a trend but a trend coincident with the rise in the millennial. There is a large bucket of people aged early 20s to early 35 or so. We know they will age. We know that for sure and they are aging into the family-bearing years. So units can't get smaller, but if that were the demand is? With nationals studies suggest and we suggest is that particular market will want to be suburban. Will that be different from the baby-boomer generation? Yes. Housing of all types will get smaller. The problem in San Diego County is we're not even building a smaller-type of single-family home. We're just putting the housing focus on density housing. There is a demand for that and we are working on plenty of projects. But there is a big demand for the other market and we are not accommodating that market. For generations San Diego expected its population to increase dramatically. Are we still in that cycle? We are. We are increasing perhaps not quite at the level we increase before the turn of the century that we are increasing at the 30,000 to 40,000 percent rate.. It is a little smaller now because our pace of people is bigger. What has changed is that something happened seven years ago. Most of our growth was previously attributable to more people moving in than moving out. That is a function of economic growth. Now it has flipped. Most of our growth now and going forward is attributable to more people being born and died. We call that natural growth. So we will grow no matter what and need to find ways to accommodate this inevitable growth in the market. Or else these young people will simply move away. And that takes the housing crisis into a red-hot economic crisis in our region. This white paper is fascinating. Can people read it? They can go to my website at londongroup.com. I've been speaking with Gary London, president, The London Group Realty Advisors. Think it very much. Thank you very much.
Market-rate housing is essentially housing that people who are in the market can afford to buy.
Gary London, the president of The London Group, said on KPBS Midday Edition Wednesday that the lack of affordable market-rate housing in the San Diego region has reached crisis proportions in his opinion.
"We don't have a chance ... to come near meeting the supply which is actually demanded in San Diego County, so the result is that bids up the price of all housing," London said.
At the 20th Annual Real Estate Conference at the University of San Diego this week, guest speakers will examine emerging trends. And the trend that is emerging in San Diego County — a lack of both market-rate housing for the middle class and affordable housing for the poor and working class — is sounding alarm bells.
In a recent white paper, London notes that incorporated cities in San Diego County will be hard-pressed to accommodate their share of future housing demand.
According to London, the lack of available land will force cities to meet the demand through infill and density, an idea which often meets community resistance. The proposed One Paseo development in Carmel Valley was downsized when residents objected to its density and size.
A forecast by the San Diego Association of Governments projects cities will need 3,574 single-family and 7,138 multi-family units each year between 2012 and 2020. San Diego County has historically desired and built single-family homes, but SANDAG forecasts a shift; 82 percent of housing units built between 2010 and 2050 will be multi-family.
London said the region is concentrating on density housing or multi-family units and not accommodating the market for a smaller type of single-family housing.
"We are going to grow no matter what, we have to figure out ways to accommodate this inevitable growth in our market," London said.