The Obstacles to Navigating San Diego’s Housing Crunch

By David Jackson / San Diego UrbDeZine

A Population Boom and a Housing Crunch.  Rising prices and short supply are making it increasingly difficult to pay the rent in San Diego. If you’ve attempted to search for a place to rent in San Diego you’ve probably encountered more than a few roadblocks and had your fair share of frustrations. The challenges multiply if you’ve tried to find something affordable anywhere near where you work.

Housing prices have soared over the last several years to the delight of homeowners and landlords, but to the dismay of renters, especially those with lower incomes. The effects are being felt most directly by low income residents and millennials. New low income housing is needed in the short term with further developments in the coming years to prevent the city’s housing crisis from turning into an economic one.

A study by the London Group published by the San Diego Chamber of Commerce highlights one of the root causes for the housing shortfall, a lack of new building permits being issued in San Diego County. The study determined that new home construction has not been sufficient to support the average 16,405 new jobs the county has added annually over the last two decades. The San Diego Association of Governments (SANDAG) own analysis supports the findings of the London Group. SANDAG estimates that the county needs to build between 11,000-12,000 new housing units annually in order to keep pace with population growth. In the seven years since the Great Recession, the number new housing permits issued has only averaged roughly 6,000.

The disparity between the demand for housing and supply is a huge but those numbers alone don’t tell the full nature of San Diego’s housing situation. The minuscule number of low-income housing units being built in relation to high-income units is compounding the situation. According to the San Diego Housing Commission, between 2003 and 2010, just 26 percent of the housing needed for low-income earners and 18 percent for moderate-income earners was constructed. Meanwhile, an incredible 152 percent of the estimated housing needed for above-moderate income earners was built. The exaggerated preference for luxury housing is based on a logical return on investment strategy for the construction industry. Unfortunately this exacerbates the plight of low and medium-income earners, categories that consist disproportionately of young people, searching for affordable housing.

Young workers are being pushed towards the suburbs and surrounding cities by the lack of affordable housing near employment centers. These people then have to commute greater distances to and from work every day. The additional drive time puts more cars on the road, more pollution in the air, and strains San Diego’s already overburdened highway system. The average commute for a worker in San Diego is currently 23 minutes. Surging rental rates reduce the options for low-income earners and younger workers by not only preventing workers from living near where their place of employment, it often forces them out San Diego altogether. In effect, a lack of affordable housing creates a brain-drain effect on local economies as qualified workers settle elsewhere.

Between 2000 and 2014, median rent prices in San Diego increased by roughly 32 percent, while median income actually declined by two percent during the same period. The average household in San Diego County now spends more than one third of their income on rent, and this percentage will grow absent a vast and rapid increase in the supply of housing. This shortage in housing is already causing negative economic consequences for the county as a whole. As residents are forced to allocate an increasing percentage of income towards housing, they have less expendable income to spend in other areas of the local economy.

The San Diego Housing Commission estimates the soaring price of housing creates a 2.5% drag annually on local Gross Domestic Product. While already a crisis for many people looking to live and work in San Diego, the housing situation is on track to be compounded as we approach mid-century unless a major effort is made to cope with the influx of residents. San Diego’s population is projected to increase by 47 percent between 2000 and 2050, with the period of fastest growth being the current decade.

Addressing the host of new environmental and infrastructure issues that an expanding population brings could prove of a challenge than merely providing housing. The hundreds of thousands of new residents that will live in San Diego will need roads to drive on, schools to attend and healthcare facilities to treat them. This influx of people will necessitate the construction of new transportation networks and the expansion of existing ones. SANDAG is well aware of the impending population surge and has a long-term strategy to deal with it. The 2050 Regional Transportation Plan (RTP) provides a framework for how the city plans to invest $214 billion over the next 40 years to upgrade and adjust infrastructure to support the new population. The city’s largest transit investment will be in the expansion of existing highways and the creation of extra lanes for high occupancy vehicles.

The Climate Action Plan (CAP) will play an important role in how San Diego County manages its housing shortage in the future. The CAP provides a blueprint for how the city plans to reduce greenhouse gas emissions, improve alternative transportation and mitigate negative effects on the local environment as San Diego expands. The CAP also supports increased consolidation in various neighborhoods through high-density housing projects. These projects are planned to be built strategically along public transportation corridors, in an effort to limit the need for single occupancy vehicle trips. Critics have argued that CAP and RTP have unrealistic expectations for the housing preferences of San Diego’s aging population. Millennials may opt for single family residences as they age and move to start families instead of the high-density multi-family housing developments planned by the city.

The failure of the Lilac Hills Ranch development Measure B, suggests there’s no short-term fix on the horizon to San Diego’s housing shortage. Even if it had passed, the measure to build the 1,700 home development would not have been much of a solution. New units of low and medium income housing are needed, rather than luxury developments. These units also need to be closer to downtown businesses to ease the burden on existing transportation infrastructure. Just the thought of thousands more people making their daily work commute on the Interstate 15 was enough to make many San Diegans vote no on Measure B. The failure of Lilac Hills Ranch suggests that any new housing projects need to be designed with a more substantial explanation as to how it will impact existing infrastructure and the environment.

San Diego will have to increase the rate of new home construction to accommodate for new residents while doing so in a way that protects the environment and doesn’t conflict with the goals of the Climate Action Plan. At the same time many residents will have to alter expectations as to what kind of housing we can realistically expect to be available as the city develops into a denser urban landscape. Meanwhile the number of people priced out of San Diego’s housing and rental market continues to climb.