As San Diego’s economy continues to grow, the demand for additional housing grows even stronger. The average San Diego household spends well above 30 percent of their income on housing as the median home price in the region has grown to $530,000 and the average monthly rent for a 2-bedroom apartment is now $1,700. San Diego is currently one of the six least affordable cities for housing in the United States and more than 70 percent of San Diegans cannot afford to buy a home. In his 2017 State of the City address, San Diego Mayor Kevin Faulconer boldly declared “We need to build more housing!” The San Diego City Council soon followed suit, hosting two housing summits, which provided an opportunity for City leadership, housing professionals, and other stakeholders to discuss challenges and solutions to increasing housing production in San Diego.
Lack of affordable housing is not only a problem for low- and very low- income residents, it is also a major problem for a large number of moderate-income working families. It is imperative that enough housing is produced to meet the region’s present and future demands and to ensure that the next generation of San Diegans are not priced-out of the region. Housing is of critical importance to San Diego’s economy, as it is of vital importance for employee retention, recruitment, and the cost to do business in the region. High home prices make it more difficult for San Diego businesses to compete with businesses in other cities. To advance the continued growth of San Diego’s diversifying economy, including its emerging knowledge-based workforce, the City must implement more reforms to meet its present and future housing needs.
On June 21, 2017, Mayor Faulconer unveiled the “Housing SD” Plan to increase housing supply, lower costs and promote transit-oriented development to address the lack of housing affordability for low- and middle- income San Diegans. The Plan takes a comprehensive approach to address the shortage of affordable homes in San Diego by implementing strategies which spur the construction of low-income and middle-class housing through incentives; streamline the development entitlement process; direct funding toward affordable housing; and encourage growth in Transit Priority Areas in support of the City’s bold Climate Action Plan.
The Housing SD Plan is comprised of more than a dozen components that will be brought forward to the City Council over the course of the next year. An early implementation action scheduled for fall 2017 is an update to the City’s Land Development Code to streamline the development review process, as well as provide for an expansion of live/work quarters and certain exemptions for historic structures. Other early actions include revisions to the City’s Affordable/Sustainable Expedite Program; reducing parking, fee, and permit requirements for companion units; as well as the establishment of a Transit Oriented Development Fund which would leverage $20 million in San Diego Housing Commission and Civic San Diego assets at a 3:1 ratio to provide finance options for transit-oriented development. Further, in February 2017, the City and Civic San Diego announced a Notice of Funding Availability of $25 million to support the acquisition, rehabilitation or new construction of housing that will provide long-term affordability.
The Housing SD Plan also includes mid-term actions anticipated to be presented to City Council in 2018, including streamlined environmental review through the development of a checklist to simplify use and ensure consistency in application; revised parking standards for developments located within Transit Priority Areas; the development of Vehicle Miles Traveled (VMT) Thresholds; as well as additional updates to the City’s Affordable Housing Density Bonus Program to further incentivize the use of the already-successful program. Finally, a longer-term action, anticipated to be unveiled in 2019, involves the establishment of a Middle Income Density Bonus Program, to provide incentives for the creation of entry-level housing for middle-income households.
In addition to the strategies highlighted above, the City of San Diego Planning Department’s core function to update community plans is an ongoing action which is key to ensuring that adequate capacity for new residential units is in place. A key component of the plan updates is to identify locations for higher residential density and infill development near transit to facilitate effective land use which reduces vehicle miles traveled and implements the City’s Climate Action Plan.
Over the past three years the Planning Department has updated and amended ten community plans, resulting in the capacity for nearly 30,000 additional residential units. These plans include North Park, San Ysidro, Southeastern San Diego, Encanto, Grantville, Chollas Triangle, Otay Mesa, Golden Hill, Uptown, and Ocean Beach. The Department has also recently enacted operational changes to speed up the community plan update process to ensure that plans are completed at a record pace. The Department is currently working on updates to the Old Town, Midway, Mission Valley, Clairemont, and Kearny Mesa Community Plans, and will soon begin updates to the University and Mira Mesa Plans as well.
City of San Diego officials recognize that housing production is not keeping pace with housing demand and that bold action must be taken to increase housing supply and boost housing affordability. The Housing SD Plan presents a comprehensive set of proposals aimed at lowering housing costs, promoting development near transit and removing development barriers in order to address the housing affordability crisis in San Diego.
Author: Brian Schoenfisch, Program Manager, City of San Diego Planning Department