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San Diego's cost of living crisis

 March 22, 2024 at 2:57 PM PDT

S1: Welcome to Kpbs roundtable. I'm Andrew Bracken. It's hard to ignore San Diego's cost of living crisis and the impact it has on San Diegans struggling to get by. Housing is one big reason why.

S2: And what's going on right now is San Diego. Home prices are now rising the fastest in the country. They're up about in a year , about 8% or so.

S1: Then a new Kpbs video series shines a light on San Diego's confusing and expensive childcare landscape.

S3: They get to that point , right , of childcare and many come to find. Wow , it's so expensive.

S1: Plus , what a move away from Sydney toward a municipal run alternative save San Diegans money. That's just ahead on Kpbs roundtable. Welcome to Kpbs roundtable. I'm Andrew Bracken. On today's show , we hear about San Diego's cost of living crisis. Prices for housing , energy , even child care make San Diego among the most expensive places to live. So what efforts are underway to make it more affordable ? Stay tuned. The Kpbs roundtable starts now. No topic jumps to the top of mind when it comes to San Diego's high cost of living more than housing. San Diegans have become used to seeing the city's name at or near the top of lists of the most expensive places to rent , to buy , to live. The average single family home price in San Diego is once again nearing $1 million. Here , to help break it all down , I'm joined now by Philip molnar. He covers real estate business and so much more with the San Diego Union Tribune. Hey , Phil. Welcome. Hey , thank.

S2: You so much for having me.

S1: As you just mentioned , San Diego home prices , they seem to be on the move up recently. Some recent data puts the median home price of an existing single family home at $980,000. This is an increase from the previous month from the previous year. Phil , you always seem to have a firm finger on the pulse of home prices in the region.

S2: The median home price is around $802,000. So that's about 37% increase since 2020. So it's a substantial increase. And what's going on right now is San Diego home prices are now rising the fastest in the country according to the S&P Case-Shiller indices. And they're up about in a year , about 8% or so. Now that's the fastest increasing in the country. But the funny thing about that is if you looked at like home prices like two years ago and you said San Diego home prices are up 8.8% in a year , that would have been the lowest on the 20 city index that we look at. So yes , prices are going up , but not as fast as before. And it's mainly just because all these other markets are , you know , kind of a little bit slower at the moment.

S1: But still 30% since 2020. I mean that's that's a lot.

S2: Yeah , 37%. It's it's been substantial. And at the same time , average monthly rent , according to CoStar back in March , was 2414 at the start of the month. And that's up about 24% in the same time period. So you can imagine that rent prices is really what affects the lower income and middle income , even upper earners , a little bit , too , in San Diego , you know , so home prices are one thing. Obviously , most of us under certain age are not going to be able to afford a home in a lot of ways you look at the data , but , you know , rent is sort of the lifeblood of our our county in that sense , because we have so many military and other people from different positions that come here from somewhere else. Right.

S1: Right.

S2: So in the last five months of 2023 , rent prices were going down every month for five months. At the end of 2023 , it's only started to marginally go up. So what we've seen with rents right now , even though they're quite high after like 2 or 3 years of going way up , they've basically stable right now. They're not moving much rent prices. And that's different than home prices , which still seem to be increasing.

S1: And , you know , with San Diego's home prices , definitely over the years , I feel like we've gone through some ups and downs , maybe more ups.

S2: I mean , the biggest thing for us was that 2005 , you know , the whole Great Recession. So that was a huge buildup in prices that the San Diego County had never seen before. There was one month where it was , you know , annual , around 30% rise in a year. We still never have gotten higher than that. That's the record. But the thing about that is , you know , the home prices crashed so much after the Great Recession. It really took us a while to get back up. So I started at the Union-Tribune in 2015 , and it's basically been a steady climb the whole time I've been here. There was a few months in 2018 where the home price was going down for a little while , and all the realtors got mad at me because I was had the gall to report that. But yes , the home price was going down for a little bit in 2018 , but then shot way up and then really like the entire nation around the time of the pandemic , especially like May , June , July of 2020 , just home prices just shot to the roof.

S1: But , you know , with that kind of pandemic , how ? House buying boom. That seemed to happen. Now we're at a different state because I think a lot of those pandemic boomtowns have come back to Earth , but it sounds like San Diego is still has some different factors that are continuing price increases.

S2: Yeah , exactly. So the biggest thing we've got going on right now in San Diego County home market is a lack of homes for sale , which real estate agents like to call inventory. So there's not a lot of homes for sale. We're talking like 2 or 3000 homes for sale in a given month , which is nothing for the fifth largest county in America. So there's very few homes for sale , which means the people that are really dedicated to buying , they're actually fighting for that small pool of homes , and they're driving prices marginally up , which is interesting because we're at a strange point in the market right now where , you know , before it was like interest rates were so low and people are rushing into the home market. They just got to get something and everyone's competing. But right now you have this very small group of people that can afford a really expensive home with a really a relatively high interest rate compared to what they had been. And it's just that small group of buyers that's really pushing it up. You know , we had the study the other day , or one of the realtor groups put out a thing about how many people were at open houses and stuff like that as a side of the market. But , you know , I talked to some experts about it. And , and even the author of the study we talked about this too , is a lot of times when there's such small inventory , there might be 30 people at open house , but you're just running at the same 30 people you saw at the last open house.

S1: And on that lack of inventory , I mean , there was some major news in the real estate world. I think it was last week. Late last week , the National Association of Realtors settled a series of lawsuits. Um , and really , um , the settlement announced was , you know , over $400 million. But I think the real story was that it could fundamentally change these five , 6% broker fees that are just inherent in home sales.

S2: So one of the things is with a change like that , when you're talking about interest rates , really high cost markets such as San Diego could see a really big difference. If you're talking like $850,000 median home price and a 6% interest rate , that's something like 48,000 or something. And so if you're able to cut that down just by a few percentages , you're saving thousands of dollars , you know ? So if this goes through the big thing with the whole realtor selling settlement is , you know , real estate agents always say that , well , you know , you could always negotiate your percentages. But the argument with that lawsuit was , you know , basically the way it works is in the past , you talk to your San Diego real estate agent and they say , okay , I want five. Okay , let's negotiate. We'll do 5% commission. I get 2.5% , and the the buyer's agent will get 2.5% too. So the theory behind the lawsuit and the allegation is that those buyer's agents would look at that and say , you know , oh , 2.5%. I think I'll go with that one because the other guys offered me 1% , so they would this is the allegation that they would steer buyers towards that other home. And , you know , real estate agents , a lot of them that I talked to really push back on that and don't agree with it. And I've gotten so many angry emails about it , I should at least because I've written a story about it. But , um , yeah. So the theory behind all of that is that the realtors will no longer be putting what the buyer's agent commission is on there. And the theory is , you know , it's going to eventually lower by a few percentage points what the commission is , you know , it hasn't happened yet. It's probably going to be a really slow process if it does happen. And when it does happen , yes , there's the theory then that it would release more homes for sale , but it's really not happening at a very quick pace and not happening quick enough for a really starved housing market like San Diego County.

S1: I want to turn your attention now to housing construction. Uh , last week on Midday Edition , host Jay Heineman spoke with San Diego Mayor Todd Gloria about San Diego's need for more housing. And here's a little of what he had to say.

S4: The fact of the matter is , we have not built enough housing for decades. When I was born here in San Diego in the late 1970s , we were building about 15,000 homes a year. Fast forward to today. In recent history , we've been doing about 5000 homes per year , but our city continues to grow. In that period of time , we went from about 700,000 people to north of 1.4 million people. When you have that amount of population growth with that little housing growth , it's exactly why we have excessive rents , unattainable housing , homeownership , and it's way too many people living unsheltered.

S1: I just wanted to kind of get your thoughts here.

S2: Who would say , we're not doing very well. So we've basically been building roughly 10,000 homes a year , maybe a little bit under that. Despite close to a decade now of really strong efforts by politicians , lawmakers to make new laws to create more housing. So , Mayor Gloria , there was talking about the city of San Diego. But if you look at the county as a whole , yeah , we're pumping about ten , 10,000 new homes a year out , but something like usually around like 65,000 , 7000. Those are all apartments. So they're not for sale homes. So those are those are mainly rentals. If you're if you're trying to break that down , what Mayor Gloria might leave out there is that the city of San Diego is the absolute leader in home building for San Diego County. Every time you break it down , I mean as much as the rental market , how much they're building downtown , there's like nearly 2000 homes opening in downtown San Diego this year , 2000 rentals in downtown San Diego. And there's some communities out there that aren't building one. So if you look at the county as a whole , there's roughly speaking , there's pretty much two places we've all collectively decided that this is where we're going to build homes , which is Otay Ranch and Chula Vista , and in the city of San Diego. So those are your two areas where homebuilding is really happening at a scale.

S1: You might notice , and I recall last year , I think Mayor Gloria particularly called out mayors in other cities in San Diego County that they needed to do more. I think someone was in on homelessness , but definitely like affordable housing and building more housing.

S2: Yeah , I had a funny story last year , so I discovered that the city of Del Mar only has one subsidized rental. This was last year.

S1: One single , one single.

S2: It had been one approved subsidized rental. Uh , adu. And I was like , oh my God , that would be such a good story. You know , just they only have one. And I found out where it was at and the guy , the owner would not return my calls. So I went there. I wrote him a letter , I put it in his mailbox , and I buzzed his house. But he wouldn't. He wouldn't talk to me. I don't know what the latest numbers are at Del Mar , but I assume it's not much better.

S1: But on that question of like rentals versus condos , I mean , another recent story you published was one about this pretty large housing project being built downtown and how it decided to change its plan from offering apartments and changing it to condos. Can you talk about that ? Yeah.

S2: I mean , it's both a development which is built around 8 or 9 condos downtown , condo buildings downtown. There are biggest downtown builder. And they had recently around this huge rental boom , had started building their first apartment tower in downtown San Diego and had plans for other ones. Now the problem is they're apartment buildings in East Village , which has got the highest vacancy rate of anywhere in the county , which is about 8.8%. Having said that , that's a lot lower than it used to be. But anyways , East Village is where we're pretty much building. You know , you could roughly say if you're looking for the epicenter of apartment construction in San Diego County for like the last decade , it's definitely East Village in downtown. There's they go up right next to each other with a lot of amenities , all this kind of stuff.

S1: But because they're used to seeing cranes over the , you know. Oh , Petco Park , right.

S2: I'll be honest , even that story I was doing yesterday about that condo tower , I started to get myself confused about another one that was like a block over , you know , the developer boasted. Did not want to give me super detailed reasons why they just said return on investment. It seemed like a good idea. But , you know , the experts I talked to , just from what I know about East Villages , that's the only market you could confidently say is saturated with apartments in any area of San Diego County. So putting up another apartment building there might seem like a risky move. Whereas if you build a condo tower , you know there's so much need for for sale housing in San Diego County that there's a good shot that that condo tower could get some , some buyers. I actually had a friend read my story and started asking me all these questions today about how much and how could he , like. I asked the developer everything I could. They don't. They don't have a set price yet , but that's a very anecdotal thing. But I'm telling you , it happened.

S1: Well , yeah , it says something about demand , right ? Yeah. And another recent story , you wrote this one with your colleague Lori Weisberg. You reported on San Diego's population decline , you know , over 22 , 2022 and 2023.

S2: So last year we lost about 31,000 people and that's how many people left the county. But we did have. Strong international migration and a few more. A substantial amount of births compared to deaths , which is rare , kind of bucked the trend last year. So a lot of babies. So we lost about 30,000 people in the county last year. And if you don't count the pandemic , which was really weird , we haven't seen that type of exodus from San Diego County since the early 1990s , and that's when we were in a recession. Our unemployment rate was 8% , and you could see on paper , okay , so that's why people left. You know , there weren't as many jobs here. There was much opportunity. So people left. The strange thing about looking at it last year is , for the most part , last year our unemployment was around 4%. By most accounts , our economy , even though it's not working for everybody , of course , but on a macro view , our economy was pretty good in San Diego County last year , better than a lot of places in California. Then you got to ask yourself , well , if that many people left back in 1990 when we had no jobs , what's going on now ? And that always comes back down to housing. So we talked to people all over the place. I've done this story a bunch of times throughout my time here , and it's always pain to try and track these people down in Idaho , South Carolina , Phoenix and but , you know , you get some really amazing interviews. What I will say is nearly every interview I've done , there was always some other factor besides the housing. But housing was a huge motivation. You know , that you could leave here and go buy a house somewhere else. And , you know , there's a lot of stress. We interviewed someone for this , this story you mentioned where , you know , she had moved her family to suburban Illinois and she just described she was making , I believe , 100,000 a year. Her husband was making $25 an hour doing something. And it was like , you know , that sounds like a pretty good , good combination right there to me. But , you know , she just talked about the stress of making rent payments and having kids and all this kind of stuff. So she just decided to move , move to a cheap part of Illinois and split.

S1: Well , there's so much going on with the housing picture in San Diego. We really appreciate you walking us through so much of it today. Philip molnar , senior business reporter with the San Diego Union Tribune. Phillip , thanks so much for being here.

S2: Yeah , such a pleasure. Thank you.

S1: When roundtable returns , we hear about a new Kpbs series that focuses on the challenges that come from navigating child care in San Diego.

S3: I definitely learned that I'm not alone in this , that I you know , I thought maybe , hey , am I the only one that does not know anything about what it looks like to navigate child care systems ? It is something universal to all parents.

S1: That's coming up on roundtable. You're listening to Kpbs roundtable. I'm Andrew Bracken. Today we're talking about San Diego's cost of living crisis becoming apparent can be overwhelming. It can also be expensive , especially when it comes to child care.

S5: The cost of care for a baby can be up to $19,000 a year. So you are starting off with your new child paying college level tuition. And and oftentimes when we have young children were early in our careers and we're younger. And so we don't have the financial means to do that. So it's a it's a difficult landscape for parents.

S1: That's child care advocate Kim McDougall from a new Kpbs series on San Diego's child care crisis. The six episode series Where's My Village is by Kpbs North County reporter Tanya Thorn. The series unravels a complex and expensive child care system from the perspective of families , providers and even Tanya herself. Tanya , welcome to roundtable.

S3: Thanks for having me , Andrew.

S1: So as journalists , you know , we're taught to be objective. But this topic you report on here , child care is something that's very personal to you as a mother of three young children. And that's something you really leaned into in that first episode of the series.

S3: So I feel like that personal experience really helps me connect with other moms. And it's almost like a rite of passage , right ? You become a mom or a parent , and all of a sudden that's just a common thing you talk to other parents about. And the topic of child care kept coming up. And in my situation , I'm very , very lucky that I have my mom that helps me take care of my kids. So really , I do have a village , but I heard from many , many parents that they don't have a village and or their village is very expensive. And so that is it's a big issue. And it's something that I kept hearing here in San Diego. And with the pandemic , I kept hearing of centers closing left and right. So I knew that the supply was going down and demand was only on the rise. So it's just something that kept coming up and it's just important. I think that as I shared my own experience , it helped other parents also share their their experiences in this series , and it helped helped them open up because it is it is a sensitive topic.

S1: Oh , absolutely. I mean , I definitely can relate as a parent myself. And this took me back to a time when my kids were maybe younger. Right ? And you mentioned talking to all these parents. And we know as parents , becoming a parent can be very daunting. And here's how. One of those mothers you spoke with , Bolling Keough , put it in your series.

S6: It's like there's so much prep before the birth , for the birth , for all of the gear. And then they just you leave the hospital and you have this baby , and. Okay , good luck. I mean , there's really no mention of childcare.

S1: So was that a pretty common response in conversations you had with parents when it came to having kids have just sort of not really knowing where to start when it came to childcare.

S3: Very common. And again , taking you back to when you became a parent. I mean , I think you remember maybe as you're getting ready to welcome this new baby , your doctor in the hospital talks to you about all these things like breastfeeding and the car seat and no co-sleeping. So they go through this very long list of things and even give you pamphlets. But childcare is never mentioned. And so it's something that I think as we go through the series should be mentioned because new parents are looking to expand their families and they get to that point , right , of childcare and many come to find , wow , it's so expensive. And maybe there's a center down the street from their house. And that is something that happened throughout this series. You know , there's a center down the street. They go and knock on the door and say , hey , you know , I know you're here. I want to take my child here when it's time. Only come to find that there is a long waiting list. And so it's not just the price of childcare anymore. Now it's there's a lack of spots for these children. And so really , there's a huge demand for childcare here.

S1: Oh , I have memories of putting our names on waiting lists. I mean , right after my kids were born. So that's I think you're right. That's a kind of a common experience a lot of parents have. Speaking of the high cost of childcare , can you talk a little bit about what types of aid there are available for families who may not be able to afford it ? Yeah.

S3: So I think , again , this is something that isn't really given to you when you're getting ready to welcome your baby. So it is something that you kind of have to find out. But there are childcare subsidies for families and it's again an income limit. So families do have to kind of find out this information on their own , depending on their family size and how much. Income is coming into their household , but somewhere where it can be found is child care. San But again , if you're a new parent , you wouldn't really know to Google that or you know how you find out. The process of it is also very confusing. And I can speak to that from experience because I did it myself. And the other thing is that there could be families that , you know , apply and then they are just outside of that income limit. So then what , you know , they don't make enough to pay for child care , but they're outside of that income limit. So the YMCA , for example , labels these families as chasm families. So they're just outside that income limit. And they're really kind of left to make sacrifices. Either mom or dad , you know , leave the workforce. They have to figure out childcare , juggle , juggle it , really juggle who they're going to leave their child with. So it's it's not an easy system to navigate at all.

S1: And as we mentioned , you know , in this series , you kind of talk a little bit about your journey navigating child care. And you feature your mom who's wonderful with your kids. It's really nice to see that. But you also talk a little bit about this YMCA eligibility list. It comes up.

S3: It actually came out. I found out about it through one of my reporting stories. Right. I'm just on my daily news story , and I interviewed Kim McDougall when I first met her. And I mentioned to her just , you know , the childcare and we again , it's something that comes up with parents and providers. And she mentioned , hey , have you tried applying to childcare San Diego ? Com I said , no , never. No one has ever told me about this. And now my kids are , you know , they were , I think four and two at the time. And so I said , hey , what the heck. You know , I'm going to apply months and months go by completely forgot that I even applied because again , I have my mom. So I'm very , very lucky in that sense. But come to find that we were eligible for some sort of financial support for my mom and I missed out on this probably for the first four years of , you know , my older one's life. So I could have gotten my mom some financial assistance and totally kicked myself for not knowing this. And so it's a very , very tough system to navigate. But the help is there. And , you know , that is kind of the crux of this series , is trying to give some guidance to parents , some support , and just try to help them out.

S1: And I think that says a lot what you just illustrated there. I mean , you're someone that has covered childcare in the county for probably years , right ? And even for you to , you know , having trouble navigating the system , finding out about this program , I think says a lot now. Definitely.

S3: Definitely. And I mean , you have to think about all the families that , you know , maybe don't have a computer at home or just don't know how to navigate online applications as easily as we do. Right ? So all that is a privilege or the language itself. There's a lot of barriers there. And so I know from speaking to the YMCA and through this project , one thing they are working on is trying to get more information out there , maybe through there through doctor's offices , because at the end of the day , having reliable childcare really , really is the well-being of families. And so if parents have peace of mind about where their children are while they go to work , then that means , you know , the economy is running , workforces are running. And so really , really , it is an issue that impacts everybody , not just parents.

S1: So in addition to speaking with local families about their experiences with childcare , you also spoke with providers.

S3: It's just the business model that exists right now isn't a viable one. Just as a business , these caregivers providers are not making a livable wage. So many decided to leave the industry , the business , once and for all. And so the provider that we did speak to , she doesn't have any children , which is funny. Um , but she is actually looking to expand into a bigger center to provide more care for more children. But she is facing all of these barriers that are keeping her from expanding. And so we really see that other side. Why is it so hard for providers to open up more spots ? I think , you know , we we see through this series that it's not as easy as people think and just all of the barriers that come with that , whether it's finding a property , whether it's upgrades to that property and the investment , the financial investment , you know , providers are not rolling in dough as she said it , the provider we spoke to , and it's really hard for them to really invest again , that money into opening up a center. So they face a whole list of challenges in order to expand.

S1: One change that has happened in the last few years was. California , adding universal TK or transitional kindergarten. You know , this opens school doors to , you know , kids as young as four.

S3: But this hurts so many providers because it was a quick rollout and it was it happened during , you know , close to the pandemic. We were already losing all these providers , but the providers that were still standing lost all of these four year olds. So a big part of their , you know , higher income , the higher income that goes into their business. And so when they lost these four year olds , they had to really boost infant care. But again , it's not as easy as it sounds. And you have to keep in mind the ratios. So for I believe per licensing rules , any any center can only have up to four infants. And infants are not easy to care for. So you have to increase the staff increase the resources. So while TK has helped out many , many parents , it is her a lot of providers. So I think something we see through the series is that more investment needs to happen when it comes to infant care.

S1: And this series takes you far beyond just San Diego. You profile an effort in Portland , Oregon to tackle the problem of affordable childcare.

S3: So what they did was they created a new income revenue. Right. So rather than waiting on state or federal assistance , they created their new assistance by taxing the wealthier. So higher income earners , a percentage of their tax revenue goes into a we can call it a fund that pays for preschool. And so preschool for three year olds is now funded by this new ballot measure. And that creates free preschool for all three year olds in this county. And from traveling there , I mean , providers are very happy with it because their wages have increased and more education has increased for them , as well as just more resources , more toys , more tools for them in their center. So I can definitely see that providers feel better , happier , healthier in this , in this role as a care provider. But the children there too , I mean , we traveled and visited a bilingual school and they look very happy. And the parents , the parents we spoke to as well , one mom that we spoke to wish that this was available for her relatives that live outside of this county , because it is it is an expensive burden for parents. So this is something that we that we did see as a success. And we did hear that there is something in the works , a similar measure here in the works for San Diego.

S1: Do you think society could do a better job of providing child care kind of out in the world ? Like I was thinking the last time I was in Mexico , you know , a lot of my friends there brought their kids and , and had a conversation about just how easy it was for having kids kind of go anywhere. And I wonder if there's an opportunity , you know , where sometimes we feel like we can't bring our kids out or we're afraid to. And I wonder if there's like a cultural piece to it , too , here in this sort of discussion on child care.

S3: Oh , totally. I think that this has become a new movement. I think I think parents are navigating the whole world more closely. So even when it comes to job searching , right , I think a lot of employers , employees are looking at , well , how flexible will my employer be with my family if something comes up ? Do they offer childcare ? Do they offer any type of stipend for childcare ? And I have seen that a lot of employers are some of them are providing childcare in their offices now. So we we have seen this changing and it is something that as a society , we need to be viewing more closely. I mean , even , you know , restaurants and outings , theaters , right. They now have more things catered to families because families are growing. And and like I mentioned before , it's it's an investment. And parents really it is their peace of mind. Everything comes with mental health. But we really saw this highlighted during the pandemic too. We had essential workers who needed to get to work , right. A lot of medical providers , doctors , but if they have kids and all the childcare centers were closed , what were they going to do ? How do we get those essential services ? So so it is something that we really saw highlighted during the pandemic , and I don't anticipate it going away. I. Honestly do see a growing and more and more parents valuing that when they are searching for jobs or even places to go.

S1: So , you know , we've covered a lot of ground here. As we've mentioned , child care.

S3: And and I think there really needs to be a push to either increase the subsidy limits to try to get more assistance to more parents , or just even getting the information out there. Right. Again , more , more education to our families when they're expanding.

S1: And I think the series will go towards getting that info out there. Tanya Thorne is Kpbs North County reporter and creator of the new digital video series , Where's My Village ? You can find it on Kpbs. Org slash Where's My Village ? Tanya , congratulations on the series , and thanks so much for talking with us today about it.

S3: Thanks for having me , Andrew.

S1: When we come back , there's a movement to replace SDG and E with a nonprofit , city run alternative. We hear about the debate over how much such a move could cost.

S7: That's where the big crux of this issue becomes is how much is it going to cost to basically replace SDG and E , and the the numbers vary wildly.

S1: That's coming up next on roundtable. You're listening to Kpbs roundtable , I'm Andrew Bracken. From housing to childcare , we now turn to the cost of energy. In the past several years , San Diego gas and electric rates have neared sometimes topped the list of the most expensive electricity prices in the nation. And not surprisingly , over the past few years , we've seen an increase in the number of people falling behind on their bills. At the same time , StG and EE reported record profits in 2023 , leading many to wonder why prices are so high. Here's consumer advocate Mark Toney of the Utility Reform Network.

S8: A lot of people are questioning why is it that SDG and E needs more money , that shareholders seem to be doing just fine. It's the customers that are hurting. It's the customers that are feeling the pain , but it's the shareholders who are reaping the gain.

S1: Here to help us understand what's happening is Rob Nicolosi. He covers all things energy for the San Diego Union Tribune. Hey , Rob.

S7: Hi , Andrew. Good talking to you again.

S1: So , you know , we've had uen multiple times talking about this issue. But , Rob , I'm wondering if you can , in simple terms , explain why San Diego's energy prices tend to be on the higher end compared to other parts of the country.

S7: Well , a big part of it is because SDG Andy has spent $5 billion for the Bee on wildfire safety issues , wildfire prevention measures. That's a big chunk of that. Another big part of that is also because it's more not just an SDG and E issue , but a statewide issue for all the utilities that they are spending a lot of money on. Trying to help California reach its goal of deriving 100% of its electricity from non-carbon emitting sources by 2045 , and they're spending a lot of money on things like electric vehicle charging stations , microgrids , energy , battery energy storage systems , things like that. And then also , as Mark , Tony mentioned from turn , um , there's a profit motive in there as well. So you combine all those things together and that's why rates are high.

S1: Now there's an effort underway to potentially move to a city run electric utility. Yep. And that's , you know , Power San Diego. Can you tell us about Power San Diego in this effort. And really what they're attempting to do here in San Diego ? Yeah.

S7: Power. San Diego's a group of people who have been , um , basically lobbying and talking about having the city of San Diego , just the city of San Diego , the city limits of San Diego , create their own electric distribution , municipal utility. So that's what they're been talking about and what they are , what power San Diego is doing right now is having a signature drive. They're trying to get 81,000 verified signatures. Um , have them verified by the city later on this year. And if they can get that many by May , June , July , then if that happens , then they would have a proposition put before voters in the city of San Diego saying , do you want do you people have in the city of San Diego , want to create a municipal utility that would replace StG ? And that's a big deal , but we'll see if they get the signatures.

S1: And just to be clear , that would be for the city of San Diego only. So the remaining county would ostensibly stay in the SDG and E stay under SDG and E , is that correct ? Exactly.

S7: And if you're a standalone city , like National City like la mesa , you would not be affected by this. This would just be the city of San Diego. Uh , anyone who's any anyone who lives within the jurisdiction of the city of San Diego.


S7: Also , its decisions would be made either by a city government or a board appointed or voted in by the city government. You see , municipal utilities , they're not that unusual. Los Angeles has one Los Angeles Department of Water and Power , and also Sacramento has one. I believe it's called Smud , Smud. I think it was I believe it's Sacramento Municipal Utility District. Uh , and they've been around for decades. Uh , and generally speaking , municipal utilities as a matter of fact do charge less than uh , investor owned utilities do.

S1: So what are experts saying about , you know , this possibility of a city run utility ? Do they believe it will ultimately save customers money , which , you know , seems like the main issue here.

S7: Yeah , you're that's exactly right , Andrew. That's the main issue will go into municipal utility in the long run. Save money for people. And that's that's a major issue. There have been studies that have shown that going to a municipal utility could lower rates by double digits , but the big hurdle from a number of energy analysts is okay. If you're going to do this , that means you have to take over. You have to run the municipal utility and use the same sort of infrastructure , or at least pay out the infrastructure that is already invested in that. That's where the big crux of this issue becomes is how much is it going to cost to basically replace SDG and E , and the the numbers vary wildly.

S1: Yeah , to say the least. I mean , I think one recent estimate from an SDG and E funded survey put it in the range of 11 and $13 billion , whereas I think the proponents of the power San Diego was much , much less more like three and a half , something like that. So that is quite a range. What do you make of that ? And what are , you know , what are you hearing about what the most likely outcome would be for such a change ? Yeah.

S7: Like the story that I wrote last Sunday in the Union Tribune mentioned , uh , the lead was let the estimating begin , because I think there's going to be that's going to be a debate that's going to go on at least for the next few months. While Power San Diego tries to get these number of verified signatures. And it's not totally unexpected , because I harkened back to about three years ago when there was some real debate about whether or not we should have a municipal utility , and there was a city council meeting , and , uh , there was an expert from a municipal utility here in California , and he said that he thought that San Diego could definitely do that. But in the same breath , you said it's going to cost money. It's going to take time. And also , in his words , this is an existential threat for San Diego gas and electric. If the city of San Diego. FDG and service territory. That's going to amount to about a 40% loss of SDG and customers. So needless to say , SDG e is going to fight tooth and nail against any kind of effort to create a municipal utility.

S1: Well , and that's reflected in some of the sources you spoke with. I think some of the quotes , there was just a good deal of , I'd say , sort of incendiary language. I think , you know , one proponent of the potential for a municipal utility made a reference to like , nuclear war as far as this change. And then someone else on the other side , you know , called it the most consequential change in San Diego's history. So it seems to be a lot riding on this potential shift in where we get our energy. Yeah.

S7: And SDG e is taking this seriously. You don't have to look any further than the fact that there has been a political action committee , actually , two political action committees formed , one by Power San Diego , and one that's includes SDG , E and some other entities. And here in San Diego , I believe it's called Responsible Energy San Diego. And that group , the group that includes SDG and they've raised more than half $1 million. They haven't spent it yet , but they've raised that. So I would presume that we're going to see in the next coming months. We're going to see either radio , television , print ads saying , hey , municipal utility is a bad idea. The Power San Diego Political Action Committee has raised about $157 million. So there's been money being spent on both sides of this , and both sides want it , and both sides are taking the other side very seriously.

S1: Well , something we'll have to keep our eyes on going forward as we near the election. Rob Nicholas writes about energy for the San Diego Union-Tribune. Rob , thanks , as always for joining us.

S7: Thank you , Andrew , thanks for having me back.

S1: That'll do it for the Kpbs roundtable this week. Thanks so much for being here. We'd love to hear from you. You can email us at roundtable at You can also leave us a message at (619) 452-0228. From last week's show on proposed changes to the California Coastal Commission , Cindy commented that she supports the commission's efforts , writing , California's accessible beaches are a hallmark of the state and are too valuable to block with high rises and parking fees. You can listen to our show anytime as a podcast. Kpbs roundtable airs on Kpbs FM at noon on Fridays again Sundays at 6 a.m.. Roundtable's technical producers are Brandon Truffaut and Ben Lusk. The show was produced by Laura McCaffrey and me , Andrew Bracken. Brooke Ruth is roundtable senior producer. I'm Andrew Bracken. Thanks so much for listening.

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New housing under construction in downtown San Diego on May 28, 2020.
Matthew Bowler
New housing under construction in downtown San Diego on May 28, 2020.

Prices for housing, energy, and even child care make San Diego among the most expensive places to live in the United States. On this edition of KPBS Roundtable, we take a look at where things stand today and what efforts are underway to make the region more affordable.


Phillip Molnar, senior business reporter, The San Diego Union-Tribune

Tania Thorne, North County reporter, KPBS

Rob Nikolewski, energy reporter, The San Diego-Union Tribune