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

Katie Schoolov
The entrance sign to the Penasquitos Village housing development in Rancho Peñasquitos is seen here, Aug. 14, 2017.
Experts See 'Perfect Storm' Descending On San Diego Housing Crisis
Experts See 'Perfect Storm' Descending On San Diego Housing Crisis GUEST:Andrew Bowen, metro reporter, KPBS News

For the past few weeks, Felicidad Cayabyab has been packing away old photos and mementos into boxes, preparing to send them away to relatives in the Philippines. The 92-year-old woman has lived in her home in Rancho Peñasquitos for 23 of the 27 years she has been in the United States. Now, she is preparing to move.

"We don't know what will ... happen here," Cayabyab said.


For more than a year, Lennar Homes has been working on plans to demolish Cayabyab's home and the 321 other homes that surround it, called Peñasquitos Village. The developer wants to build 601 houses, townhomes, condos and apartments on site, along with swimming pools, spas and tennis courts. Twenty-eight of the apartments are to be reserved for low-income people, according to the project's draft environmental analysis.

The project, called Pacific Village, is scheduled to go before the San Diego Planning Commission next month. The City Council has final say over its approval.

Cayabyab, who depends on Social Security Income and a Section 8 housing voucher to pay her rent, is confident she will not be able to afford any of the new units. She said she likes her neighborhood because it is quiet and has no crime, and because she is friends with her neighbors.

"Our neighborhood is good," she said.

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

The planned demolition and redevelopment of Peñasquitos Village, built in 1970, has been years in the making — and it could be a harbinger of what is in store for thousands of other homes in San Diego County set to lose their affordability status. The property's owner agreed to reserve the homes for low-income renters under a federal program that ran from 1990 to 1996, city officials said, but that agreement expired in 2010. Many of the low-income tenants were given Section 8 housing vouchers that allowed them to stay in their homes, despite their rent going up.

Now, in a market with skyrocketing housing costs, the owner stands to make more money off the property renting newer, nicer homes to wealthier tenants. And from the city's perspective, the additional 279 homes the redevelopment would bring are an opportunity to increase the overall housing supply and relieve some of the pressure on San Diego's tight housing market.

RELATED: Nonprofit Developers Strive To Preserve Affordable Housing

Matt Schwartz, president and CEO of the California Housing Partnership, said the housing market is seeing a "cascade of terminations" of affordability agreements, as many of the programs to fund them are coming to an end all at once. About 2,400 homes in San Diego County for low-income renters — or just over 7 percent of the county's existing affordable housing stock — are set to become market rate within five years. That number nearly doubles within the next 10 years.

"Those owners are now free to do, or freer to do what they want with the properties," Schwartz said. "We're starting to see a bit of a perfect storm come together."

California Housing Partnership
A map shows how many homes reserved for low-income renters in San Diego County are at risk of becoming market rate in the coming decade.

Compounding the risk for low-income renters is anemic growth in new housing production, which for years has failed to keep pace with population and job growth. Community opposition to new housing, exemplified in fights over density in Hillcrest, Bay Park and Encinitas, has only made the problem worse, said Anne Wilson, a senior vice president of the nonprofit affordable housing developer Community HousingWorks.

"If we had lots of vacancies and low rents, it wouldn't be such a bad thing, people could go somewhere else," she said. "But we don't. There's nowhere else for people to go."

CHW is increasingly focused on buying affordable homes before they become market rate, then renovating them and extending their affordability agreements for several more decades. But Wilson said her organization often gets into bidding wars with deep-pocketed firms on Wall Street that see those expiring affordable homes as an easy way to make profits. The limited funds for affordable housing mean mission-driven nonprofits like CHW cannot always compete.

The California legislature is focusing its fall session on addressing the state's housing crisis. Two bills aim to provide more state funding for low-income housing, and a third would streamline the approval process for new home construction in cities that fail to meet their housing needs.

But as the plan to redevelop Peñasquitos Village nears approval, Cayabyab is growing more and more anxious about her future.

"What kind of life (is) waiting for me if they will demolish this?" she asked through tears. "I have no place to move."