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San Diego Releases Comprehensive Action Plan to Reduce Affordable and Market-Rate Housing Costs

April 22, 2016
There is a great deal of talk these days about the housing affordability crisis, but San Diego leaders are working to implement a new plan to address it for both affordable and market-rate housing.
The League’s Housing, Community and Economic Development Policy Committee received an overview of the plan recently from Richard Gentry, president and CEO of the San Diego Housing Commission (SDHC). Entitled “Addressing the Housing Affordability Crisis in San Diego,” it presents an 11-step action plan of primarily local actions that if implemented could reduce the cost of affordable housing construction by an estimated $36,000 to $174,000 per unit and reduce market-rate housing costs by $23,000 to $51,000 per unit.

The action plan resulted from including an objective in SDHC’s 2014-16 agency-wide Strategic Plan that read: “Ensure that the most effective and cost-efficient business practices are in place to create and preserve quality affordable housing” in the city of San Diego. The agency agreed that while San Diego needs affordable housing for low-income workforce families, it also needs housing affordability for the middle class.
After spending much of 2015 studying the issue, it became clear the housing affordability crisis had broader and more significant impacts to all sectors of the city, including: 
  • San Diego has an affordability gap of $2.4 billion, or 2.5 percent of the city’s Gross Domestic Product. If housing were available at an affordable cost to all San Diegans, city households would have $2.4 billion more in disposable income to spend in the local economy, creating jobs and supporting local businesses.
  • A lack of affordable inventory is causing long commutes and congested freeways, contributing to Greenhouse Gas emissions.
  • As prices escalate, the threshold of income needed to avoid homelessness rises, potentially pushing more people on the streets. 
The report was presented on Dec. 9, 2015 to the San Diego City Council’s Smart Growth and Land Use Committee, which voted unanimously to direct city staff to work with SDHC to explore how the report’s recommendations could be crafted into city ordinances or advocated at the federal or state levels. San Diego City Council committee members described the report as a “common sense” way of lowering construction costs.
The eight city and three state and federal recommendations in the action plan at-a-glance include:
  1. Set Goals. Have the San Diego City Council set annual goals for housing production, with a scorecard to track progress in meeting the goals.
  2. Incentivize 80/20 Developments. Introduce tax rebates and exemptions to encourage 80/20 developments, in which 80 percent of units are at market-rate and 20 percent are affordable. This could reduce the cost of the affordable housing by $56,000-$85,000 per unit.
  3. Defer Fees Until Occupancy. Defer development fees, permit fees and other fees until after construction, saving up to $2,000-$6,000 per unit.
  4. Shrink Parking Requirements. Reduce parking requirements for housing developments by using alternatives such as tandem parking and car-sharing programs, saving up to $5,000-$10,000 per unit.
  5. Rethink Mixed Use Requirements. Reduce requirements on developers, where applicable, to include commercial space in multifamily complexes, which could save $11,000-$19,000 per unit.
  6. Free Up More Land for Development. Open more vacant or underutilized land for development, which could reduce the cost of affordable housing by $27,000-$39,000 per unit.
  7. Streamline Permits. Shorten the permit approval process by allowing conceptual reviews of discretionary building permits, self-certification, online permitting, etc., to save $5,000-$9,000 per unit.
  8. Use Master EIRs. Approve Master Environmental Impact Reports (EIRs), which can reduce the time and expense of reviewing individual EIRs, saving $3,000-$6,000 per unit.
  9. Reform CEQA. Reform the California Environmental Quality Act (CEQA) to reduce duplicative lawsuits, require disclosure of identity of plaintiffs, and allow technical errors to be corrected without invalidating project approvals.
  10. Align State Housing Policy Oversight. Align the state government’s oversight over housing policy, which is now split between five agencies.
  11. Increase State and Federal Funding. Increase state and federal resources such as the U.S. Department of Housing and Urban Development’s Continuum of Care to address homeless and Low-Income Housing Tax Credits to support the development of affordable housing.
The full report is available online.

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