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San Diego Housing Commission Questioned About Large Reserve Fund

San Diego Housing Commission CEO Richard Gentry announces new initiatives to help homeless students, Dec. 3, 2015.
Claire Trageser
San Diego Housing Commission CEO Richard Gentry announces new initiatives to help homeless students, Dec. 3, 2015.
San Diego Housing Commission Questioned About Large Reserve Fund
Housing Commission Reserves GUEST:James DeHaven, reporter, The San Diego Union-Tribune

The hepatitis A outbreak has brought San Diego's lack of low income housing into the spotlight are gone now questions are being raised about the effectiveness of the San Diego housing commission. Report by the San Diego Union-Tribune finds a commission, which is Senegal's largest affordable housing developer has been growing the cash reserves while finding fewer low income housing developments that are planned. Joining me is James. Welcome to the program. Thank you for having me. The housing commission gets its funds from developers. How does that work? It doesn't get all the funds from developers. It gets a lot of money from the Department of Housing and urban development. Does get a fair amount from local affordable housing fees that are levied against developers who do not build low income units as a part of their market rate developments that they build. That is because there was an ordinance put in place that requires them to do so. So the housing agency can build the units that they don't have to -- I guess you can say. You report them out coming from developers have increased. It's gonna quite a bit -- it has gone up quite a bit. I don't have the specifics in front of me. It's gone up because the housing market has rebounded. The commission collects more money as a build more units because they have to pay a direct proportion to the number of low income units that are going to be built. They are collecting more money. The housing commission has $270 million in unrestricted cash and other assets, but they say much of that money is not really unrestricted. Tell us about that. That is correct. They say a lot of it is for future projects. They handed over records that showed nearly 2 dozen projects that have had commitments made by the housing commission including a couple that of been on the books for three years and sometimes longer. They've only withdrawn one commitments in the past few years. The commission is way off in its hoped-for targets and building developments to go tell us a little bit about what you found out about that. Every year they put out a report saying how much -- how many units are they are -- units they are able to produce. Their targets -- I don't know if it's because they set them too optimistically or what the case might be but they had 85% of the revenue last fiscal year and only build 20% of the units that they hope to build. They say that was because there were delays and problems in problem -- private financing. Essentially what they said is it boils down to delays in getting the projects funded is why they don't build as many units The large amount of money being held by the housing commission is generating some criticism. What have some people you spoke with said should be done instead of what the housing commission is doing and that is holding on to a large amount of money. Some critics have said if you have a project on the books for three years that's tying them up -- tying up a bunch of money you should send that commitment to the developer. They haven't done so in some time and only once that I'm aware of. That's a primary thing that they've come out and said is that instead of cutting these checks to developers and sitting on them find someone else who will spend that money. One group that could spend is a housing commission on development agency. That is one area that they could see for the investment. How was the commission responding to those criticisms? They responded by saying we can't spend all the money that we have because we have it promised other people and even if we could it would be good to spend everything that we have because we would have to go to the city Council and who knows how they might feel about it. That has been their defense that they can't bankrupt themselves even in light of multiple housing crises. You mentioned that the criticism being faced by the housing commission is similar to complaints against the large reserves held at the San Diego county. Are the responses of these two organizations as to why they need these large reserves similar? I think they are similar. I think there are parallels in the county that says we have the self-imposed restrictions that will not allow us to use those dollars and the housing commissions say we've made these -- I think at the end of the day there both self-imposed restrictions. I think that the criticisms of those two positions are similar. You bring the problem to really tangible focus in your article by describing what the amount of unspent revenue the housing commission collects each year could be spent on. Tell us about that. I don't remember the exact figures but there was a 10 proposal a while back that is been adopted by the city to build giant circus tent size housing shelters and you could build a lot of those with the amount of money that the housing commission doesn't spend every year. You can build a lot of tiny homes and a lot of shipping container units. The housing commission turned out an opportunity to use its own land to be paid to use its own land to develop such a shipping container unit project last year. I thought those were two good examples of inks that you could spend on. Use it enough to take in more than 8000 homeless people under a recent proposal which is quite astounding. Yes, it's almost every single homeless person that they've counted in the county. I been speaking with James. Thank you so much. Thank you.

The hepatitis A outbreak has brought San Diego's lack of low income housing into the spotlight are gone now questions are being raised about the effectiveness of the San Diego housing commission. Report by the San Diego Union-Tribune finds a commission, which is Senegal's largest affordable housing developer has been growing the cash reserves while finding fewer low income housing developments that are planned. Joining me is James. Welcome to the program. Thank you for having me. The housing commission gets its funds from developers. How does that work? It doesn't get all the funds from developers. It gets a lot of money from the Department of Housing and urban development. Does get a fair amount from local affordable housing fees that are levied against developers who do not build low income units as a part of their market rate developments that they build. That is because there was an ordinance put in place that requires them to do so. So the housing agency can build the units that they don't have to -- I guess you can say. You report them out coming from developers have increased. It's gonna quite a bit -- it has gone up quite a bit. I don't have the specifics in front of me. It's gone up because the housing market has rebounded. The commission collects more money as a build more units because they have to pay a direct proportion to the number of low income units that are going to be built. They are collecting more money. The housing commission has $270 million in unrestricted cash and other assets, but they say much of that money is not really unrestricted. Tell us about that. That is correct. They say a lot of it is for future projects. They handed over records that showed nearly 2 dozen projects that have had commitments made by the housing commission including a couple that of been on the books for three years and sometimes longer. They've only withdrawn one commitments in the past few years. The commission is way off in its hoped-for targets and building developments to go tell us a little bit about what you found out about that. Every year they put out a report saying how much -- how many units are they are -- units they are able to produce. Their targets -- I don't know if it's because they set them too optimistically or what the case might be but they had 85% of the revenue last fiscal year and only build 20% of the units that they hope to build. They say that was because there were delays and problems in problem -- private financing. Essentially what they said is it boils down to delays in getting the projects funded is why they don't build as many units The large amount of money being held by the housing commission is generating some criticism. What have some people you spoke with said should be done instead of what the housing commission is doing and that is holding on to a large amount of money. Some critics have said if you have a project on the books for three years that's tying them up -- tying up a bunch of money you should send that commitment to the developer. They haven't done so in some time and only once that I'm aware of. That's a primary thing that they've come out and said is that instead of cutting these checks to developers and sitting on them find someone else who will spend that money. One group that could spend is a housing commission on development agency. That is one area that they could see for the investment. How was the commission responding to those criticisms? They responded by saying we can't spend all the money that we have because we have it promised other people and even if we could it would be good to spend everything that we have because we would have to go to the city Council and who knows how they might feel about it. That has been their defense that they can't bankrupt themselves even in light of multiple housing crises. You mentioned that the criticism being faced by the housing commission is similar to complaints against the large reserves held at the San Diego county. Are the responses of these two organizations as to why they need these large reserves similar? I think they are similar. I think there are parallels in the county that says we have the self-imposed restrictions that will not allow us to use those dollars and the housing commissions say we've made these -- I think at the end of the day there both self-imposed restrictions. I think that the criticisms of those two positions are similar. You bring the problem to really tangible focus in your article by describing what the amount of unspent revenue the housing commission collects each year could be spent on. Tell us about that. I don't remember the exact figures but there was a 10 proposal a while back that is been adopted by the city to build giant circus tent size housing shelters and you could build a lot of those with the amount of money that the housing commission doesn't spend every year. You can build a lot of tiny homes and a lot of shipping container units. The housing commission turned out an opportunity to use its own land to be paid to use its own land to develop such a shipping container unit project last year. I thought those were two good examples of inks that you could spend on. Use it enough to take in more than 8000 homeless people under a recent proposal which is quite astounding. Yes, it's almost every single homeless person that they've counted in the county. I been speaking with James. Thank you so much. Thank you.

The hepatitis A outbreak has brought San Diego's lack of low-income housing into the spotlight. Now questions are being raised about the effectiveness of the San Diego Housing Commission.

A story published by The San Diego Union-Tribune says the commission, which is San Diego's largest affordable housing developer, has been growing its cash reserves while funding fewer low-income housing developments than it planned.

According to the Union-Tribune, the Housing Commission has "more than $278 million in unrestricted cash and other assets."

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In response to the story, the San Diego Housing Commission issued the following statement after the broadcast of Monday's Midday Edition:

SDHC does not have $278 million in cash and assets available to use as it chooses. In fact, the majority of the funds referenced in the article are funds SDHC already has lent to affordable housing developers, first-time homebuyers or low-income homeowners for the rehabilitation of their properties. They are included because they are owed to SDHC, but the funds are no longer in SDHC’s possession. Additional funds have been committed through actions taken by the SDHC Board of Commissioners or may be subject to Federal program restrictions.