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Report: San Diego's Housing Shortage A Looming 'Economic Crisis'

A crane stands at a housing construction site in downtown San Diego in this undated photo.
KPBS
A crane stands at a housing construction site in downtown San Diego in this undated photo.

Report: San Diego’s Housing Shortage A Looming “Economic Crisis”
Report: San Diego's Housing Shortage A Looming "Economic Crisis" GUEST: Marney Cox, special projects director, SANDAG

San Diego has one of the most -- one of the least affordable housing markets in the country. That's because there's a housing shortage. The Chamber of Commerce says the housing shortage has become an impending game in I -- impending economic crisis for San Diego. They want to solve the problem by building high-density multifamily units. It concludes that many more single-family housing units are needed. The London group has more comments. Joining now is [ Name Indiscenible ] with the San Diego Association of governments. Can you start off by telling us why they are proposing this? I would be glad to. It's not actually SanDAG that does this but the responsibility for zoning for different uses. What you know about these different principalities -- municipalities. Some of these are very old. One, cities are very hesitant to take especially single-family housing because of how expensive it is to support. When prop 13 came along and used property tax revenue to pay for schools, cities were less encouraged. That has been going on for almost 50 years now. Wes housing has been developed. Part of the reason for that has been the way that we collect and distribute property taxes. Another one is the California -- California environmental quality act which has made it more difficult to develop. It takes a much longer time period to get through a housing proposal than it ever has before. Every time you add time to a proposal it adds cause. The development community focuses on high value types of development rather than low value. It has pushed up the price of the average unit.. More recently we have this issue of Reed house gas emissions. What we know about gas emissions is a more that comes out of the tailpipe or electric power plants, things like that, what we try to do is reduce that number. Now more denser development means less for a trip from home to work. Some of these land-use changes have been impacted by the state's focus on reducing greenhouse gas emissions. 's chamber backed report says we are at peak burden millennial. We take that to mean that when young people start having families, they want to perhaps move out of the urban area and move into the suburbs, conceivably in a single-family home. Are you expecting a huge shift to people wanting suburban homes? That's a really good question. Think it's one that no one knows the answer to, including us. That would also include the authors of the report it's in the future. That we get to be determined. I would say the early signs are that it appears the millennial generation is opting for a different kind of housing unit than the post-World War II baby-boom population opted for with the suburb development. Does that mean they will continue to do that? I think the answer to that is still out. One thing I will say; the millennial generation appears to have a different set of priorities. One of them is they are very environmentally sensitive. Some of the reasons that we see fewer single-family units is because that footprint increases greenhouse gas emissions and does more damage to open-space and also encroaches upon protected habitat for a lot of the protected plants and animals we have in the region. Because they are environmentally sensitive, they appear not to push in that direction that would cause some of those ripple impacts to things that they value highly. I think it is still an open question as to whether or not the millennials will demand the same amount of single-family dwellings is the post-World War II population did Different people have been recruited to San Diego from different parts of the country. It's warned that if companies can't recruit talent because employees want families to live in big suburban houses, we are not building them, we are going to have an economic crisis. You believe with that? This has been a problem for San Diego for probably for two years now. This is nothing new. San Diego has been on the high end, probably one of the most expensive housing markets in the United States. California has probably three of the top four most expensive markets in the United States. This is nothing new for the state of California. To say that it's going to all of the sudden have a dramatic impact is a little misleading. It has had an impact. I agree with that. A good example is even statewide where we get about 12 percent of the nation's population growth each year. We represent about six percent of the total housing permits that are authorized. We had been doing this for literally decades and home prices are high in part because there is a mismatch between supply and demand. This is not a new problem. We have been living with it for decades. Finally, how will we know if young families are dissatisfied with the housing options available to them in San Diego? I have faith in the marketplace pickets a little bit of a mix between what the millennials will do -- express a dissatisfaction. They will begin to elect a different set of representatives. Then the land-use will switch from primary attached -- primarily attached homes to other types. I have been speaking with Marnie the [ Indiscernible ] of San Diego Association of Governments .

Regional Housing & Economic Impact Analysis
A San Diego Regional Chamber of Commerce-sponsored report on housing affordability in San Diego.
To view PDF files, download Acrobat Reader.

San Diego has one of the least affordable housing markets in the country. Market experts say that's because there's a housing shortage. A new report sponsored by the San Diego Regional Chamber of Commerce says the housing shortage has become an "impending economic crisis" for San Diego.

The July 15report criticizes the region's emphasis on solving the problem by building high-density, multi-unit developments. Author Gary London of the real estate consulting firm The London Group said San Diegans have historically favored single-family homes, which will be in short supply. That could drive up their prices and force workers out of the region to less expensive cities, he wrote.

“It is simply too risky to bet our entire region’s growth on the premise that nearly all the housing that can and should be built is multifamily,” London wrote. “Failure to accomplish a more balanced approach to new housing will not only fester the housing crisis, but will bleed into a calamitous economic crisis at some point.”

But SANDAG disputes the study’s claim that the region’s planners are embarking on an “experiment” by favoring high-density housing. It’s too soon to say whether millennials, who currently favor living in the urban core, will eventually look for suburban homes. Even if they do, SANDAG special projects director Marney Cox said demand for suburban homes would push politicians to rezone for more single-family homes.

“Look at demand for developing single family houses in the region today that are not zoned for that, like Lilac Hills,” Cox said. “The market is saying to us that there’s a demand here. Or at least a builder is telling us there’s a demand here. That will ultimately influence elected officials, who have control over land use.”

Cox joins KPBS Midday Edition on Thursday with more on how the housing market is adapting to new developments.