San Diego Has a Shortage of Affordable Housing – Busting a Few Myths on Why

[Editordude: the following was originally submitted as a comment to a post about the hundreds of San Diegans who rallied last weekend against the city’s housing policies. We thought the comment good enough for its own post. Danna Givot was one of the rally organizers.]

By Danna Givot / May 11, 2023

I have not heard anyone say we have built too many homes in San Diego.  What I have heard people say is that what we have a shortage of AFFORDABLE HOUSING, not luxury housing.

I don’t hear many people disagree with this fact, which is supported by this study by the San Diego Housing Commission  . Check out the chart on page 7 to see where the shortage of housing is in San Diego – at what income levels. When you compare the number of units available by income level (Figure 12 on page 20) to the actual number of households in each income level (Figure 11 on page 19), you can see exactly where the housing shortage is in San Diego. (You can see this charted in the second slide here .)

When the figures were collected (study published in 2020), the city was short approximately 46,000 units for extremely low-income households and 1,200 units for very low-income households. (Note: There was also a gap for above moderate income households, but this is not a problem as these people can live in less expensive housing. The problem comes when people cannot afford more expensive housing.)

Now, these numbers can be misleading because families and individuals live together in groups when they cannot afford accommodations and they are “housing-burdened,” so it is very likely these numbers are understated. That doesn’t change the conclusion that the housing “crisis” is not at all income levels; the meaningful shortage is of truly affordable housing.

For those who say it is a simple “supply and demand” problem, land is a finite commodity and there are too many other variables to expect supply to lower rents and land costs in San Diego or most high demand cities. In fact, every time the city upzones properties, it is contributing to rising land values, which in turn leads to increasing housing costs and rents.

For those who would like to read more about just how much of a supply increase it might take to bring down rents even a couple percentage points, I recommend reading this 2018 Federal Reserve Study .

I refer you to Table 3 on page 23 for the gist of the article. San Diego is not one of the cities listed, but the results are generalizable and indicate that if a major city adds 20% more housing units, it could anticipate less than a 2% decrease in rents as a result of that increase in supply.

And for those who prescribe to the theory of “trickle-down housing,” it is said to require a 35 year cycle before that housing will go from market-rate to affordable, if it ever follows that path.

For those who are familiar with housing prices in many older neighborhoods (Kensington comes to mind), those old homes have not lost any value – quite the contrary. And even for homes built in the 1980’s (Sabre Springs in North County is an example), those homes have done nothing but go up in value as they are now 35 years old or more. “Trickle-down housing” is not going to solve San Diego’s affordable housing shortage any time soon, if ever.

I have also heard people talk about where the optimal place to locate dense housing is if the goals are truly to increase transit usage, minimize greenhouse gases and vehicle miles traveled, encourage economic development, promote affordable housing and equity, and achieve the city’s other climate action goals (mobility mode shift, expanding the urban canopy versus shrinking it).

According to SANDAG’s own research, that optimal place would not be beyond 1/2 mile walking distance from major transit stops because 92% of transit users in San Diego walk 1/2 mile or less to access transit.

In fact, SANDAG’s research shows that 70% of transit users in San Diego walk 1/4 mile or less to access transit, so putting dense housing beyond 1/2 mile walking distance and expecting residents of that housing to give up their cars and adopt transit as their primary mode of travel is unrealistic and will not achieve the city’s professed goals noted above. Expanding the footprint of dense housing away from transit corridors will undermine achieving the goals noted.

Further, the state and the federal government generally do not consider projects beyond 1/2 mile from transit to be “transit-oriented development.” Therefore, San Diego will be making most of these projects further from transit ineligible for state and federal grant funding for help with its $5.17 billion and growing infrastructure deficit.

I urge you to consider the facts and not hearsay by people. I have tried to give you some factual information to consider, with sources. You will draw your own conclusions, as you should. I would also encourage you to do more fact-finding of your own. The Internet has made this possible, allowing each of us the opportunity to educate ourselves about subjects that are important to us and our communities. Thank you for reading this and considering what I have written.