‘Off-site affordable housing plan will enforce segregation. Why is the mayor promoting it?’

A mini-mall in Lincoln Park neighborhood which is on the state’s “high segregation and poverty” list.

By Geoffrey Hueter and Danna Givot / Op-Ed San Diego U-T / Dec. 5, 2023

Following the San Diego City Council’s postponement of the Housing Action Package 2.0 on Nov. 13, Mayor Todd Gloria launched a public relations campaign instead of providing thoughtful responses to the valid concerns of the City Council and community members.

The mayor is being disingenuous when he says that critics are opposing needed new housing. There were 11 proposals in the package — known as HAP 2.0 — and only one of them generated serious pushback. The remaining 10 proposals included measures such as affordable housing for San Diego’s burgeoning student population and single-room occupancy homes to replace the thousands of single-room homes that were torn down — when the mayor was on the council — to make way for Downtown redevelopment.

If the mayor was truly committed to building the specific types of housing that San Diegans need, then he would have permitted these clearly beneficial policies to proceed rather than holding them hostage to the demand by his building industry donors that the council accept the proposed off-site affordable housing option for Complete Communities Housing Solutions.

The proposed changes to Complete Communities Housing Solutions are a bad deal for San Diego. Currently, the Complete Communities program is structured around the social ideal that communities are healthier and more functional when residents of different incomes live in walkable neighborhoods that provide both housing and commercial activity. In exchange for building affordable housing as part of the project, the city is willing to permit five times the number of homes that would otherwise be possible on a site — significantly more than is allowed by any other affordable housing density bonus programs.

Despite this density windfall, the building industry persuaded the mayor to propose allowing the affordable units to be moved offsite to other areas of the city. The offsite affordable housing will not have the amenities that the market-rate units will have — gyms, barbecues, pools, media rooms, business centers — nor, in most cases, the same access to ground-floor businesses, parks, high-quality transit, libraries and public safety. Moving affordable housing offsite will segregate residents by income and opportunity, in clear violation of state standards for affirmatively furthering fair housing.

Not only would moving the affordable units offsite make communities “incomplete” (to quote Councilmember Joe LaCava), the proposal could actually reduce the total amount of affordable housing produced in San Diego.

Instead of building new affordable units, the amendment would allow developers to simply purchase and rehab existing, “naturally occurring” affordable housing. That means no net new, additional affordable housing, just some updated existing units.

Under current regulations, developers are responsible for the entire cost of producing the affordable units without reliance on any government or other outside funding. As the Independent Budget Office rightly told the City Council on Nov. 13, “it is critical to ensure the offsite option produces at least the same number of affordable units as would have been required onsite without other public subsidies. Building affordable units offsite could allow the project to qualify for other affordable housing subsidies, which are highly limited. To the extent that an offsite development is awarded public subsidies that would have otherwise gone to other affordable housing projects, the program may not produce additional affordable housing beyond what would have otherwise been produced.” Complete Communities affordable units must be net new additional housing funded in full by the developers of these private projects to ensure public subsidies are not taken away from other public affordable housing projects.

Note that housing produced by affordable housing developers in San Diego now costs $500,000-$900,000 per unit! That equates to as much as $2,000 per square foot, roughly four times general construction costs. And, as noted by the Independent Budget Office, those higher costs include public subsidies. It is far less expensive for the developer to just build the affordable housing onsite.

In addition to the segregation of affordable housing, there are other proposed changes to Complete Communities in HAP 2.0 that have not received adequate scrutiny. The mayor proposes to eliminate the requirement that these projects include low and very low income units altogether in favor of more higher income units. HAP 2.0 also increases the allowed number of units on any project by 30 percent or more citywide, rather than identifying particular locations where it does and doesn’t make sense to increase the scale of these projects.

Given that the mayor’s proposal would promote economic segregation and produce less affordable housing in total, the question isn’t why the council and residents of San Diego should be fighting this proposal, but why the mayor is promoting it.

Hueter is the chair of Neighbors For A Better San Diego and lives in Talmadge. Givot is vice chair of Neighbors For A Better San Diego and lives in El Cerrito.