San Diego’s business community has called for the city to take specific actions to combat a deepening housing affordability crisis.
This year, the San Diego Regional Chamber of Commerce has not only elected to make the issue of affordable work-force housing its primary objective, but has implored the City Council to implement a slate of 14 specific policy recommendations within 90 days from their unveiling on Feb. 1.
“There is an unbelievable alarm that is being sounded, and we see that as our cue to take on a greater participatory role in the policy process,” said Mitch Mitchell, the vice president of public policy and communications for the chamber, who oversaw the Housing Committee in drafting the plan. The committee is chaired by Sherm Harmer, the president of San Diego-based Urban Housing Partners, Inc., and Susan Riggs Tinsky, the vice president of government affairs for the San Diego Association of Realtors.
With business leaders pressing for action, the City Council could be prodded to take even more action.
Mitchell acknowledged, however, that much of the chamber’s 90-day housing action plan has already been proposed by various parties. Those parties include the City Council-appointed Affordable Housing Task Force, which presented its findings to the city manager’s office in May 2003; nonprofit agencies such as the San Diego Housing Federation; and the chamber itself in various forums.
“Basically, this is a reminder to the city,” said Michael Nagy, the policy coordinator for the chamber’s Housing Committee.
On Feb. 2, the Land Use and Housing Committee, chaired by City Councilman Scott Peters, agreed to forward the chamber’s proposals to the city manager’s office for more detailed study and possible action by the council. The committee will reconvene in 45 days to take more definitive action.
Nagy called the action a “victory, to the extent that at least we got the City Council to refocus on the issue of housing and how important it is.”
Peters said he was “encouraged by the response the proposals received at the committee, which really seemed open to them.”
“I think (the chamber’s plan) represents a change from discussing these (issues as) generalities and is a real chance to try to figure out how to make them policies that are working on the ground,” Peters added.
Increasing Supply, Decreasing Cost
Business leaders realize this and are stressing the importance of increasing housing supply and decreasing cost, said Mitchell.
Jessie Knight, the chamber’s president and chief executive officer, said that during the last five years, San Diego’s housing affordability index plummeted from 27 percent to 12 percent, and the median home price here soared from $315,800 to $527,600. He added, “These changes are disastrous for our business community.”
The chamber, which has more than 3,000 members, said the search for quality employees among the region’s businesses is being hampered by the increasing cost of housing.
From the perspective of local business, Nagy said the plan emphasizes three objectives: retention, because San Diego businesses lose skilled workers who relocate to other regions where housing is less expensive; recruiting, because San Diego businesses face difficulty in attracting new employees to the area due to the price of housing; and quality of life, because employees suffer if they are forced to make long commutes daily to work.
The housing action plan calls for, among other things, the establishment of a housing czar, who will be appointed by Mayor Dick Murphy and will serve as a member of his staff. It also advocates the adoption of new ordinances rewarding developers for increasing housing density that would at least match or exceed the minimum density bonuses mandated by the state (which, as of Jan. 1, specified that if at least 10 percent of the units are affordable to low-income households, then the project is eligible for a 20 percent bonus), and for the easing of parking requirements for developers building residential communities.
More generally, it recommends better-defined performance measures for any and all departments and agencies that oversee housing in the city.
Betsy Morris, the chief executive officer of the San Diego Housing Commission and a member of the chamber’s Housing Committee, said she sees land-use reform as the critical component of this proposal. The chamber also specified that the city should require its Real Estate Assets Department to conduct an analysis report to evaluate all publicly owned parcels of land for potential use for affordable or work-force housing projects.
One affordable housing advocate who has proposed this strategy in the past is Sanford Goodkin, the president of San Diego-based real estate investment trust specialist Goodkin Considine Strategies, LLC. He said the chamber plan is laudable and the fact that the “business community is now dedicated to solving the affordable housing problem can create a wonderful difference.”
Goodkin says he raised the issue of utilizing public land years ago in response to the glaring dearth of publicly owned vacant land that is being developed.
“Years ago I thought a way of solving the (affordability) problem was for the city, county and state , each of which owns a great deal of land that is usable but not being used , to make an inventory of this land,” he said. “It would allow government organizations to entertain proposals for the use of the land to demonstrate new housing techniques that use more affordable building materials, for example. The idea is to set aside extraterritorial land where home builders can violate regulations on building materials and experiment.”
Goodkin said financing of the policy proposals such as the ones put forward by the chamber must be something that “the public feels comfortable with.”
This point has not been lost on San Diego’s business leaders.
New Revenue Sources
The chamber addressed the need for devising new revenue sources to fund its initiatives, suggesting that the city should focus on competing more fiercely for state housing aid provided by Proposition 46. The law was enacted in 2003, but Mitchell says city agencies are not equipped to compete for the funding in some cases. Of the $2.1 billion in grant money offered up by the state in this proposition, roughly $56 million has gone to municipalities within the county, according to research from the San Diego Housing Federation.
Another recommendation involves a proposal for the city to float an infrastructure bond, modeled after Proposition MM, the $1.5 billion school bond that passed with 78 percent of the vote in 1998. Financed primarily by property taxes, that bond went for repairs in schools across the city of San Diego.
However, with the city mired in a financial crisis, consisting of a $1.4 billion under-funded pension fund, investigations into possible financial improprieties, an overdue audit of city finances, and a suspended credit rating, the idea of issuing new bonds is off the table at the moment.
“Getting the financing measure on the ballot for 2006 is one of the critical issues,” said Mitchell.
Tom Scott, the executive director of the San Diego Housing Federation, a coalition of nonprofit and other organizations that strive to produce quality affordable housing in San Diego County, said he supports the chamber’s plan fully, and especially supports the call for the infrastructure bond to help improve things such as sewer systems and parks in older neighborhoods.
The passage of the bond proposal could be a reality if the council wants to act, said Scott. “The bond issue is a matter of putting a proposal together for the voters. Our argument is to put it on the ballot and let those of us who see a need convince the public to vote for it,” he said.
When he introduced the plan, the chamber’s Knight told a gathering “we have reached a point where we have to stop talking and implement a plan , a real plan with clear milestones and specific dates to mark progress.”
“We must stem this tide and strive to literally increase housing production and the stock of affordable work-force housing,” he added.