‘Let’s Talk Affordable Housing’

Email Letter to Mayor and San Diego City Council

By Lisa Mortensen

Good morning Councilmembers:

I wanted to congratulate you, Councilmember Moreno, for pushing forward legislation through the council to launch a $5 million fund to buy apartment complexes in order to preserve existing affordable structures.  While this is a good start, I want to pull back the lens and take a big picture view of some pitfalls that could hamstring your truly earnest efforts.

First off, will the city do its due-diligence when considering making an investment like this?  Because let’s face it, the city’s track record in buying real estate has been extremely costly and not profitable.  If the city continues their approach to real estate investing, it would be doubtful that $5 million dollars would go very far and we hope that the city will spare San Diegans any further taxpayer bailout.

This good intention of yours, Ms. Moreno, will be blindsided by the mayor’s upcoming push to pass the Preservation and Progress program that actually will eliminate any protections for properties more than 45 years old, properties designated as historical, and/or certified as Mills Act.  In addition, this program will cease certification approvals of historical districts locally even though they have been approved by the State and Federally.  What this means is that developers will have no restraints on existing homes and can demolish these structures.  At a minimum criterion, these structures should be moved to another location so that they could still provide below-market housing or subsidized housing with the ‘in-lieu’ fee to achieve true affordability.

Case in point, the attached picture is a 1940’s 4-bedroom (2,450 sq.ft) family home that is scheduled to be demolished for a 7-story structure with 15-units and one on-site parking space.  Sadly, this example is what has been taking place the last 5 years with hundreds of structures that could be used as Naturally Occurring Affordable Housing (NOAH) which have been torn down.  This is the direct reason why we have more people each month falling into homelessness because they are unable to afford market-rate housing once their former apartment has been sold to a for-profit developer.

As for the affordable unit set aside, what happens to those units?  When we have approached these new replacement apartment developments to ask about vacancies or something about the affordable units, we do not get any information.  Does the city have oversight and copies of the leases on these ‘so-called’ affordable set asides?

We have seen this situation time and time again.  For instance, the St. Paul’s Episcopal Church property on 6th avenue in Hillcrest was sold to a for-profit developer who tore down the existing 14-unit apartment building.  We were told that the developer paid an ‘in-lieu’ fee to compensate for this loss of affordable housing.  Now there is a 20-story 204-unit luxury high-rise apartment building on that site.  So, my question for the council; are there records showing accommodation for these former apartment tenants?

Do we know how much money is in the City’s ‘in-lieu’ account and have any of the monies been disbursed?  Let’s hope these ‘in-lieu’ fees are not being transferred to the general fund to be used at the mayor’s discretion.

Let’s not forget the city’s lack of disbursement of the Developer Impact Funds (DIF) account that had a balance of $500 million dollars as of 2023.  Sadly, instead of disbursing the money to upgrade the strained and decaying infrastructure in the communities being affected by this rapid-fire development, those monies were untouched.   Now these funds will be returned to the developer if not withdrawn within the past 5 years.   Are there any records on this account?

So far, we have seen developers have a two-track approach; build micro-units with limited to no parking or luxury units with underground parking.  But these are all rental units that do not include housing designed for the ‘middle-income families’ where there is the greatest need.

As for the micro units, these units are basically high-priced dorm rooms.  Not very aspirational and does not provide people an opportunity to build equity.  Tenants will continue to be paying the landlord’s mortgage and be one rent increase away from homelessness.  The future looks bleak.

If the city was truly concerned about it’s affordable housing problem, it would do more oversight and require that existing structures be relocated and maintained as affordable.

In addition, the city should provide incentives for existing apartment houses to be bought and upgraded to condo standards and be converted as condominiums for first-time buyers.  Another important aspect of condo conversions is that the existing on-site parking remains and so there is minimal impact to the surrounding community.  This will also add revenue to the city’s coffers with added property taxes to the county rolls.

It’s important to bring up the need to get back to ‘well-planned communities’ not this scattershot development that tears at the basic fabric of our communities.

Here are a few examples:

• Downtown San Diego which has added hundreds of thousands of housing units and only has one grocery store (Ralphs).  With the abandonment of Horton Plaza, this has eliminated nearby necessity retail shopping.
• While Hillcrest has approved 50,000 more units, the very busy US Post office will be moving out of the area within a year.
• Add the loss of hundreds of parking spaces in these metro communities and the surge parking downtown and people will be left isolated in their homes due to lack of convenience shopping or be able to entertain guests.  And don’t get me started about walling off access to the San Diego Harborside and Bay ….

Sadly, the city’s current expedited ‘ministerial’ process that they provide developers excludes existing property owners from any input or mediation of possible impacts for the surrounding neighborhood that I have described above.  Isn’t this a complete taking of our private property rights by our local leaders who happen to primarily be renters?  So even though we are property owners we are treated like serfs in Mayor Gloria’s fiefdom.

Before we go any further with these knee-jerk programs, let’s stop this continued monetization of real estate and have a very broad-based discussion with San Diegans who are the stakeholders.  We deserve a seat at the table to turn this around. We are not anti-development, but support smart development that does not fracture our communities, maintains convenience and ready access to essential services.

Let’s discuss how we can truly and adequately achieve affordability for all San Diegans and maintain community quality of life.  Because so far, the city’s housing policies have been complete failures.  If the council approves the Preservation and Progress program, it will only achieve preservation of the developer’s profits.  Is this really what you want?  If you chose to approve this program, the answer will be ‘yes’.