San Diego’s Home Building Continued To Slow In 2019

Speaker 1: 00:00 One of the reasons housing is so expensive in San Diego is because we're not building enough new housing to meet the demands of our growing population. For example, for the last decade, the city of San Diego has built less than half of the number of new housing units, the state of California mandated as a housing goal to fill us in on how we did in San Diego County last year on building new market rate and affordable houses. KPBS is Alison st John spoke with Steven Russell from the San Diego housing Federation and Bora Winkle from the building industry association. Speaker 2: 00:33 Laura, let's just start with you. You're pretty concerned about the number of new housing permits issued in the whole of San Diego County in 19 uh, 2019 how are the numbers shaping up? We are in our fifth year of decline in the actual issuance of building permits in the city of San Diego. We hope we end the city a sum total about three and a half thousand units under a building permit. As a County. We are in the fourth year of decline. So the decline is really coming out of the city of San Diego. Okay. So the housing starts in the rest of the County is not as bad as, as the fall is not as bad as in the city of San Diego. I would say this, the rest of the County has always been deplorable. It's that the city was always the leader in building permits and they're declining and so they're taking the sum total down in, in a, in a unit put on a building permit. Okay. So, uh, we're not quite at the, uh, we, you haven't gotten the figures for the whole year yet, but you've got like 6,000, 500 new housing permits for this year, uh, as compared to about 8,900 for the year before. So it is falling. That's right. It's, uh, we projected the year end. We'll show a approximate drop of 20% in building permit activity for the entire region, which is a disaster. Let's just find out about affordable housing, Steven. I mean, how does that picture look? Are you building more or less affordable housing now? Speaker 3: 01:55 Well, we're seeing the last of the resources from redevelopment actually being deployed if you know of redevelopment went away seven years ago. But the lifespan of a project is so long that we're just now seeing the final last coins in the piggy bank being spent from redevelopment. So I expect unless we get a local resource, uh, to, to increase the supply of affordable housing, we are going to see a dip. So the, the level of activity has been sustained. Most of the focus of course has been on housing for folks who are homeless, chronically homeless, in fact. And that's a reflection of the fact that, uh, the public has seen, you know, in poll after poll, we know this, a number of top concern of Californians is homelessness. And so we've seen a real focus, uh, on building homes so that people can, we can end the cycle of homelessness, but those resources that, that have tied us over from redevelopment are going to go away and we're going to need to create new resources locally. Speaker 2: 02:42 Right? I mean, I know that at this point many middle class families actually qualify for affordable housing. What we would have considered middle-class, correct. Speaker 3: 02:50 There are a lot of occupations that are absolutely critical to our region. VAX seven of the 10 fastest growing occupations in the region don't get paid enough to actually housing Speaker 2: 03:00 in San Diego County. Now we're on one of the things that mayor Faulkner for example, is hoping for is some more one bedroom and studio apartments. Something that would be a little more affordable for people who are, uh, you know, not looking for a three bedroom house. Is that something that development, uh, industry will be listening to and acting on in the coming year? Yeah, it's not really about that. It's about getting our community plans timely approved. Uh, it's about getting a variety of zoning options about getting the densities and the height restrictions, uh, lifted, uh, so that we can, uh, achieve, uh, more housing options for, for the folks. I mean, uh, I have to say that, you know, we have seen zoning changes to allow more density, but that doesn't seem to have affected the amount of development that's actually happening. The building that's actually being built. Speaker 2: 03:50 Why is that? Well, there's an exception. If you look at Grandville Scott Sherman's district, it's probably the volume leading a territory in the city of San Diego. Um, there are several thousand units under construction and what is very interesting is it's the only part of the city where there's high volume of deed restricted affordable housing happening right now. Uh, 27%, 27% of all the units that are built in the Grandville community plan are dedicated for affordable housing. And so we would like the city, uh, across the city to, um, model after that example as, as an incentive driven, um, uh, volume friendly housing production model. Steven, can you comment on that? I mean, is this something that, that you feel that, that there's some lack of that something more needs to be done so that this can be modeled elsewhere? Absolutely. We need certainty from community plans. You know, when somebody goes in for a permit, the community plan should inform a builder. Speaker 2: 04:48 This is what we can build here in the process. Should be easy to do that. So the time doesn't, uh, doesn't eat away at the, at, at the cost. I would add that for Granville, one of the things that's total lot that 27% of the units are affordable. There's a lot of cash, a lot of public money that went into subsidizing those. So it didn't just happen because of zoning, but zoning was a critical component to create the certainty that allows the market to put capital into those settings. I hate to take into such, you know, not human terms, but capital is what drives a construction and capital needs to find a certain path to be able to make that investment. Well, this brings us, I guess to measure AA, which is going to be on the ballot in March. A SOS save our San Diego countryside initiative, which would mean that no development could be built in places that the, the general plan forbids it unless it goes to a vote of the people. Speaker 2: 05:35 And we've seen huge battles over places like lilac Hills and Newland Sierra. So the building industry I guess is going to be spending heavily to defeat measure a, can you explain why it is that this is at the crux of the matter as far as you're concerned? Yes. Thank you. This is probably the, the most critical aspect of this interview. Um, citizen activism, which results in ballot box planning or initiatives is going to be the 2020 story. The initiative that we oppose, uh, we are in the know on, um, measure a campaign, um, would require a vote by the people in every single city of the jurisdiction. They have a project wants to exceed its zoning by six units. So we would get a County wide vote if it project that, let's say it was a hundred units and it wants to go to 106 or if it was 10 units and it wants to go to 16, um, everybody would get to vote on that, which of course is an insane proposition because nobody in their right mind would stage a County wide vote for that. Speaker 2: 06:34 So it tends to kill off a new opportunity for, for development and, and comes at the worst possible time as a slow growth period for that, for, for nearly a decade. And we see these ballot box initiatives mostly inspired by homeowners, uh, ironically, people of your age and my age, uh, boomers who already own a home and they say no to housing. And this is becoming a very complicated issue. And so we post this, one of the things that people often argue is that the new developments do not include enough affordable housing. And, uh, I, I just want to challenge you more. Uh, why is it that developers would rather pay a penalty than actually build affordable housing? Well, the penalty is supposed to be set at a, at a, uh, at a proportional cost to providing the units on site. So you're bringing up the subject of inclusionary housing, which we settled with, not in a legal sense, but in a practical sense with a council president, Georgette Gomez, um, for the city of San Diego. So if measure a were to pass, uh, that means there would be no affordable housing production in the entire County of San Diego because the only properties that would get developed are large lots, which accommodates secondary homes, luxury ranchettes and what have you. So, um, our, our beef with measure a is that it takes the County out of the housing production business and shoves all the unmet demand into the cities. And that's just not right. Speaker 1: 08:04 And that was Bora Winkle with the building industry association of San Diego County and Steven Russell of the housing Federation. Speaking with KPBS is Alison st John. And we've reached out to supporters of measure a and we'll bring you that story as part of our election coverage.