How San Diego’s Downtown Housing Supply Boom Is Making Rent Less Affordable

by on March 10, 2017 · 1 comment

in Culture, Economy, Environment, History, Labor, Politics, San Diego

By Murtaza Baxamusa / UrbDeZine

Having invested a billion and a half dollars of public funds in downtown redevelopment, it is worth asking if it helped or hindered in solving the affordable housing crisis that San Diego faces.

From the catalytic start of downtown’s boom with the construction of the ballpark to the unceremonious demise of tax increment financing under Governor Brown, there has been a lot of change.

Census data shows that from 2000 to 2015, downtown’s housing stock doubled. About half of downtown’s current stock of 25 thousand housing units has been built during this time frame. About 5 thousand renter-occupied housing units were added to the stock. Of the total housing stock almost 18 percent (over 4 thousand units) are vacant, compared to 9 percent vacancy back in 2000. This indicates a greater share of investor-owned units or second homes that are not occupied.

In terms of affordability, downtown is at a tipping point.

A little over half of renters in downtown live in unaffordable housing, that is, they spend over 30 percent of their household income on housing costs. The upward price pressures on the downtown market are resembling those of the region as a whole.

housingThe median rent is the rent charged by the middle unit in the rent scale. This chart shows that whereas downtown used to be relatively inexpensive in terms of median rent, it is now close to the median regionally.

The figure below shows how times have changed for downtown renters during the 15 year period.

Indeed there were 5 thousand units added to the renter-occupied housing stock, however, at least 6 thousand units priced themselves above the regional median rent by 2015. This comparison needs to be tempered by the fact that the region’s rents also grew during this time period, and that downtown’s stock grew at a faster rate than the region. Nonetheless, there were substantial resources being funneled into downtown, both in terms of affordable housing, as well as in terms of infrastructure and other public projects. Indeed, downtown projects enjoyed regulatory and financial incentives like no other area in the region.

The intent of this post is to spur a discussion of the affordable housing stock in downtown, and particularly to focus on why new construction is not keeping pace with the removal of the affordable housing stock in San Diego.

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Charts prepared by author

Murtaza Baxamusa, PhD, AICP, is the Director of Planning and Development for the San Diego County Building and Construction Trades Council Family Housing Corporation, and teaches community planning at the Sol Price School of Public Policy at the University of Southern California (USC). He received his doctoral degree in planning from USC, and is certified by the American Planning Association.

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avatar Lori Saldana March 11, 2017 at 8:37 am

Thank you for this analysis. It reminded me of a conversation I had with a friend recently- for a few years, when I was in the legislature, we were neighbors in units in an older apartment building in Sacramento.

It was a charming 1920s era building, maintained and rented by the Capitol Area Development Authority (CADA)- similar in some ways to our own Civic San Diego, yet hugely different in outcomes.

CADA’s role was to operate, develop, and maintain affordable housing, and encourage walkability around the State Capitol building. According to their website: “Affordable apartments that are beautiful and well maintained. A lively urban neighborhood that is home to the city’s best parks, restaurants and shops. A green-conscious, connected community where work is just a walk, bike or transit ride away…Since 1978, CADA has been about building neighborhoods for people, not for profits. As a self-supporting public agency, fiscal prudence is a must. But we’re also driven by another bottom line: to build safe, affordable and environmentally sustainable urban neighborhoods that people are happy to call home.”

New legislators were referred to CADA to find convenient, affordable housing. I enjoyed being within walking distance of work. Just imagine what a different downtown we would have, if San Diego had created a similar public housing Authority, 40 years ago, focussed on these goals instead of the for-profit development model of the Centre City Development Corporation/Civic San Diego.

For more on CADA visit http://www.cadanet.org/overview
For more information, see:

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