San Diego Business Journal

More and more new affordable housing projects have popped up throughout San Diego County over the past two years, with more on the way.

Even so, housing advocates say the need is so overwhelming that these projects have barely made a dent with waiting lists topping 100 or more even before a new project opens.

Most of the new projects have been targeted at the homeless and veterans, although the expectation is that some attention may return to low-income and even moderate-income families who find themselves priced out of the market.

Housing advocates are fine-tuning a proposal to place a $900 million housing bond on the November 2020 election ballot — a bond which they say could go a long way toward easing the crunch.

Affordable housing developers said they’re ready to build more affordable housing, as soon as the money to help subsidize it is available

They say San Diego has fallen behind other areas of the state in not providing local funding for affordable housing made a dent with waiting lists topping 100 or more even before a new project opens.

Most of the new projects have been targeted at the homeless and veterans, although the expectation is that some attention may return to low-income and even moderate-income families who find themselves priced out of the market.

Housing advocates are fine-tuning a proposal to place a $900 million housing bond on the November 2020 election ballot — a bond which they say could go a long way toward easing the crunch.

Affordable housing developers said they’re ready to build more affordable housing, as soon as the money to help subsidize it is available

They say San Diego has fallen behind other areas of the state in not providing local funding for affordable housing.

Developers’ Support

Two developers produce much of the affordable housing in San Diego County — Chelsea Investment Corp. and Affirmed Housing.

Chelsea Investment has four affordable housing projects under construction in San Diego and one in Carlsbad.

They are the 42-apartment Pacifica at Playa Del Sol in Ocean View Hills, the 139-apartment Paseo La Paz in San Ysidro, the 103-apartment Siena at Civita, and the 203-apartment Stylus at Civita in Mission Valley.

Chelsea Investments also completed three projects in San Diego in 2018, one in Oceanside — the 32-apartment North Coast Terrace — and one in Ramona — the 62-apartment Schmale Family Senior Residence.

The San Diego projects completed in 2018 were the 90-apartment Mesa Verde in Mission Gorge, the 145-apartment Town & Country Village in Mission Valley and the 50-apartment Lofts at Normal Heights.

Affirmed Housing has three affordable housing projects under construction in San Diego — The Link at 17th and G streets with 88 apartments, Fairmount Family with 80 apartments in Grantville, and Twain Veterans in Grantville.

Affirmed Housing also recently completed the 79-apartment Luna in Carmel Valley and the 85-apartment Zephyr in Grantville.

“We’re doing quite a bit of work in Oakland and San Jose because they have more funding resources than we have,” said Jim Silverwood, president and CEO of Affirmed Housing.

That’s where the $900 million San Diego bond proposal comes in, said Stephen Russell, CEO and executive director of the San Diego Housing Federation — a nonprofit that advocates for affordable housing.

1,200 Units ‘Waiting for Money’

“There’s already a pipeline of about 1,200 units that are sitting there waiting there waiting for money,” Russell said. “These are things that are in the hopper at the Housing Commission waiting for funds to be available.”

Even with the new affordable housing projects recently completed and those under construction or planned, “production has been down,” said Jim Schmid, CEO of Chelsea Investment.

“It’s not a demand question, for sure. There’s plenty of demand and growing,” Schmid said. What’s missing is the financing at a time when construction costs for affordable housing are skyrocketing, just as they are for market rate housing, Schmid said.

The proposed bond would need approval by two-thirds of those voting in the November 2020 election.

That’s a tough hurdle, but Russell said voter turnout is expected to be especially high because of the presidential election, and a high voter turnout is thought to work in favor of the bond proposal.

A 2017 poll also showed that more than 70 percent of those polled would support such a measure.

“It’s going to be really important for the business community to get behind our affordable housing bond and help us get it passed because it’s going to help them,” Silverwood said.

Who Pays

The bonds would be repaid over time through an increase in property taxes. For the full $900 million, the total annual increase would be $19 for every $100,000 of property value, but Russell said the plan would be to issue the bonds in phases starting with about $120 million. The property tax increase would be gradual, rising as more bonds are issued.

Although details are still being worked out, the bond proposal would provide money for more homeless and veterans housing but it would also provide money to build housing for low-income families.

“The focus on seniors and vets has been out of response from the heart to the nature of the (housing) crisis but we shouldn’t have to choose between who we save and who we don’t,” Russell said. “Here’s folks that are at risk of homelessness. The broad housing crisis is as rents go up, families get pushed out. There’s no point in solving the problem for one population to see another population slide into it.”`

More of a Mix

In the short term, affordable housing development will likely continue to focus on the homeless and veterans, said Emily Jacobs, senior vice president of housing finance and portfolio management for the San Diego Housing Commission.

Longer term, Jacobs said there will be more of a mix.

“What we’re going to see going forward is a different variety of housing being built — family housing, traditional affordable housing. Permanent supportive housing will definitely be part of the mix,” Jacobs said, adding that workforce housing will become an increasing concern.

Jacobs said legislation passed last year would allow housing authorities throughout the state to devote some of their funding to families earning up to 150 percent of the average median income — pegged at $86,300 by the U.S. Department of Housing and Urban Development.

“That allows us a larger reach in being able to assist the citizens of San Diego,” Jacobs said.

Schmid of Chelsea Investment said the biggest problem he sees is housing for low- and moderate-income families, “because that production has diminished.”

“The middle income and working class families really can’t afford housing anymore,” Schmid said. “It’s time to start addressing that.”