By Lisa Mortensen
We’ve heard this rallying cry from city hall and the development industry before — the need for housing. The problem is their supply and demand argument leading to affordability just doesn’t wash but leaves the stain of unaffordability. The city built more housing in 2023 than it has in decades. This year there are many more units under construction. So why are prices at all-time highs with this increase in inventory?
What’s missing from discussion of housing is NOAH which is the acronym for Naturally Occurring Affordable Housing. This means to preserve existing housing stock, say multi-family apartment houses and converting them to condominiums, or vacant office buildings reimagined into for purchase or for rent housing. When using existing buildings, it is more environmentally sound because you are not tearing down and disposing of a large amount of building waste.
Plus, the cost of new building materials in addition to the fire-hardening requirements to build new construction, is not financially feasible unless you are building your own home. For more information on this key point to affordability — NOAH that will also help to stem those who are being forced out of their homes due to redevelopment check out this link.
In addition, with whole house short term rental rules not being enforced by the city is also reducing the opportunity of occupancy for owners or long-term renters, thus reducing the supply. Some former duplexes and apartments have even been converted to short term rentals. Further compromising available inventory.
So, the fallacy with the Blueprint San Diego plan that basically rips up all our community land use codes, allows for the corporate building industry take over to build based on their profit margins. Now let’s be clear, I am not saying that private industry cannot make a profit but I’d like a few other considerations on the game board than if a project solely ‘pencils out’ for a developer.
What’s missing with all these developments is ‘well-planned’ communities and also ‘build to suit’ plans.
Well planned communities are communities that have commercial and essential services located near transit lines and institutional use properties (like schools and religious organizations) and some multi-family use properties. The residential and multifamily residential usually transition away from the central business district.
Essential services are grocery stores, or convenience/necessity shopping such as pharmacies, banks, cleaners, UPS, hardware stores, (and maybe your friendly local real estate office ), etc.
Build to suit is when a commercial property developer obtains a tenant or buyer who wants to build their company’s office or headquarters at an undeveloped site. A lease or purchase agreement is signed and the developer then ‘builds to suit’ the requirements stated in the agreement.
With Todd’s grand Blueprint San Diego or Plan Hillcrest plan, they are only talking about raising existing buildings and building high-density skyscrapers. So, when these 10’s of thousands of units are built, will they all shop at Trader Joes and Ralphs at the hub? Hmmmm, how is that going to work?
The tired talking point of “build it and they will use public transit” message is a bit far-fetched. Most people, even those who are avid cyclists, still have a car. Where are they going to store their cars? On the streets that are doing away with street parking?
I learned that in the coming decade, purchase of new cars will be restricted to electric vehicles. There also is a federal requirement that parking garages will have to install charging stations. Those who have EVs know that if they recharge their vehicles overnight, the cost is a fraction of what it would be if you had to use a charging station during the day. In addition to the need to charge your EVas an added chore to one’s day.
The above examples are just more evidence that Todd Gloria is not looking at long-term or big picture planning. Only immediate gratification of his donors so he can continue his political career upstate and then to Washington D.C.
We also must realize, if all these disastrous policies that Todd is pushing through during his re-election campaign are showing his best accomplishments, can you imagine the amount of damage he will do in the next four years when he doesn’t face reelection?
Let’s take our city back and steer its future for us and the next generations. I hope you will make sure that you, your household, your neighbors and friends are all registered to vote. Then we all have the responsibility as informed voters to spread the word: The choice is clear Vote Larry Turner for Mayor 2024 & Terry Hoskins District 9 City Councilmember. We must begin to rebuild and these two dedicated individuals are ready to serve.
It is clear that, under Todd Gloria’s dictatorial regime, San Diego will continue to roll over for big developer money, as it has for decades. Only now, on overdrive.
Since supply and demand in San Diego has never–not even a little bit–brought down the cost of housing i.e. build it and they will come–I am sad to see younger voters taking the bait and siding with big money interests who care nothing about the exorbitant housing prices these people will still pay after all those units are built.
Meanwhile, San Diego as we still know and love it, is being bulldozed to accommodate this mad rush toward the enrichment of the few vs. the needs of the many. They sell it as a Utopia of dense, livable neighborhoods, with maximum bike lanes and minimum cars. Utopian thinking has never yielded promised results. It is only another in a long line huge mistakes.
Give Gloria and his YIMBY cohorts the boot in November. And give us back level-headed urban planning!
The city owns your trash, they own your water, thought about owning your electric, they’re looking to steal land for upgraded bike lanes, they’re looking to raid your wallet.
This crew doesn’t respect the voters. No to these incumbents and no to their tax increases. No to Midway Rising. No to the mega shelter. Time to clean house and calibrate the priorities.
I am a broker and work with a lot of developers here in San Diego. I am hearing from them that they are looking at having to reduce rental rates especially for one bedroom units and studios. They are amending their rental rates for reduction in rates of around 10% depending on the sub market/ neighborhood. So while most people on here don’t think adding housing supply will lead to lower rates, it appears to be happening. I do agree with concerns however of dropping 10 units for example into a traditionally single family neighborhood. That said we need more units in the city to accommodate population growth which continues to happen.
Lower the rental rates 7%, then increase them 10% year over year?
Wage increases maybe 1%/year.
Gotcha.
JP, is it really a result of increased number of units (which I’m not really seeing a significant change in San Diego) or is it a realization that people cannot afford to pay the rents landlords are seeking? I’m still seeing a lot of >$3K plus rents for a one bedroom apartment which would require an annual income of $90K if we use the HUD definition of affordable housing costs (i.e., less than 40% of income).
Before you say anything, I realize that the 40% standard is probably unrealistic in the San Diego economy, but it is certainly still a yardstick for what we should be paying.
You’re hearing “developers” are looking to reduce rental rates? And are amending rates? That’s the gist from your first two sentences. So developers are dictating the rates?
The market determines rates. As in renters determine what they are willing pay for rent in this case. Developers lower their rental rates in response. Works like any other market for any other good or service.
Interesting. In your original post you say it’s increasing supply, now you’re saying it unwillingness to pay the higher rents. So…which is it?
“Works like any other market for any other good or service”
– no, I don’t believe it for a second. Housing is not like a television or a toaster. Buying a car is not a “necessity”, or at least not near what housing is.
Sounds like developers are the problem in asking above market rates. You advocate for more units but then say the market for studio/ one bedrooms is saturated based on pricing and the market. Why would you advocate building if collapses your margins?
The above-mentioned proposal that a 10% reduction in rates is tied to the recent production of housing is flawed. It assumes this correlation as truth, when there are more important factors to consider.
For instance, since many workers can now telecommute, they are free to move to other areas where they can afford a home, and are happy to do so. Coastal California has always been more expensive that other areas (and now ridiculously so). But to amplify my earlier point, there is no amount of housing you can build here that will substantially bring down housing costs i.e. supply and demand doesn’t work here. That kind of cost reduction would induce a stampede from other areas to snap up those units, with spiraling costs the time-honored response. And quality of life would suffer for everyone.
And since it is a rental market rather than a home-buying market, true rent control would help substantially with rental inflation. Rather than a rent cap, increases should be tied to a percentage of the consumer price index, as it is in San Francisco, for instance. Vacancy control–where a landlord is allowed to raise the rent on a vacant unit by a set percentage–would be a drastic game changer as well.