By Anna Daniels
Gentrification definitely has hit the community. We believe that, because of the respect the planning committee had for the total community, that they would have gone “mano-a-mano” against the condo converters. The majority of the victims jettisoned because of the conversions will never return to the neighborhood. They can’t afford to. But, let’s bring it a little closer to home. How many of us living on our present means could afford to buy a home in Golden Hill, South Park or Brooklyn Heights? Kinda sobering, isn’t it? Interview with Carlos and Linda LeGerrette
The San Diego Free Press neighborhood focus during the month of May has been on Golden Hill, one of San Diego’s oldest communities. One of the most visible elements of Golden Hill is the elegant old mansions that comprise the historic district.
These mansions are a tangible reminder of individual wealth and power amassed in years past. Today, many of those mansions are still owner occupied, while some have been divided into rental units; others are now attorney offices or operated as half-way houses. These disparate uses reflect a more nuanced story about wealth, power and changing demographics in Golden Hill today.
I spent a few hours walking around Golden Hill, not along the historic or commercial district, but along one particular side street off of 25th Street that has been beckoning to me. I set off down a steep hill and explored streets that dead ended at the 94 Freeway or on the other end, at a flight of steps up to Broadway.
Golden Hill Apartment
Golden Hill: The parallel universes of high housing prices and low median household incomes… On the side streets off the historic district, single family houses become smaller and apartment complexes become more noticeable. Many of the side streets contain a combination of both, which reflects later zoning decisions regarding density and infill. The apartments on these streets, however, were built much later than those in the historic district–they include parking.
Some of the single family homes have owners who painted and restored their homes in keeping with traditional craftsman style architecture while others broke from the traditional color palette. There are also homes which have simply weathered in place.
Golden Hill Unpaved Alley
I unexpectedly came upon an unpaved alley behind an abandoned looking house that had fruit laden orange trees in the back yard and an old swing set. A thick cluster of arundo grass waved above my head in the wind and hooded orioles darted about in this small world that existed apart from the urban life surrounding it.
The median single home price in Golden Hill is $733K, compared to $616K city wide.
The median household income in Golden Hill is $49k compared to the city wide median of $61K . 22.9% of the population lives below poverty level, compared to a city wide median of 15.2%
The median rent in Golden Hill is $905/month compared to a city wide median of $1,187.
The upshot of these statistics is pretty apparent- if the work you do results in a paycheck or a monthly defined retirement or disability benefit, home ownership is likely beyond your reach. Renting in Golden Hill is perhaps a stretch but still doable for those same individuals. Doable rents are relative, however. Single working mothers as well as young professionals, artists and skilled laborers all currently call Golden Hill home.
The question remains whether property values will continue to rise and whether rents will remain “affordable” in Golden Hill. The first people to get squeezed out when rents rise or condo conversions occur are the single mothers, the families in which English is not the first language, workers in San Diego’s burgeoning low paying service industries and the elderly and people with disabilities living on fixed incomes.
San Diego real estate development interests and the financial sector continue to be the tide that lift all yachts… This displacement remains largely invisible and broadly acceptable. There are few if any public policies that address the issue of rising rents or the attendant displacement of whole segments of our communities. That is a testimony to how entrenched those development and financial interests are in San Diego and the degree to which our elected representatives, as policy makers, have been willing to go along with those interests.
Golden Hill Commercial Zone 25th Street
At the end of my walk, I decided to have lunch at Krakatoa, with a bird’s eye view of the commercial district along 25th Street. It appeared to me that Golden Hill has found an equilibrium, at least for the moment. The commercial district on 25th Street is human scale–most of the buildings are only one story and the flowering jacaranda formed a purple canopy over the streetscape. It was lovely. There is a mix of laundromats, restaurants, car repair businesses, markets and flower vendors which reflect a diverse mix of cultural tastes and preferences and a small scale business response to the basic needs of residents. I saw signage in English and Spanish.
Welcome to City Heights: Ellis Island, colonized by Corporate America… My return to City Heights and the area where I live was jarring. The differences between the 25th Street commercial district in Golden Hill and the commercial district along University Avenue between Fairmount and Euclid are astounding.
City Heights University Avenue at Fairmount
City Heights University Avenue Height Variance
I didn’t see billboards in Golden Hill. Nor did I see a preponderance of fast food franchises– Denny’s, Panda Express, McDonald’s, Subway and Starbucks. I didn’t see five story mixed use buildings along 25th Street, shattering the scale of the cityscape.
While wealthy shaker and movers a hundred years ago were building mansions in Golden Hill, folks were rabbit hunting in the wide open chaparral of the then unincorporated area that would become East San Diego and then City Heights. How do I craft a meaningful conversation with Golden Hill residents, who live in a much smaller geographic area, with far fewer people, a different history, different demographics and different zoning and land use policies?
City Heights: A story of infill, redevelopment and the transfer of wealth outside of the community… The term infill refers to zoning decisions that encourage greater population density in areas that are already built out. It is a way of slowing down encroachment on the few remaining open space areas, mostly in the northern parts of the city. The city’s urban core, which includes City Heights, Golden Hill and North Park, all have land use policies that permit continued densification along major transit corridors and other specified areas, generally commercial nodes.
City Heights Infill
These zoning decisions have been hotly contested and some areas in the urban core have been down zoned as a result. Continued infill puts a strain on public infrastructure and public services and much of the infill has occurred in areas which have been historically deprived of those very things. And rapid infill challenges the established sense of community identity in often wrenching ways.
The massive redevelopment projects initiated in City Heights during the 1990’s were envisioned as a way to address both the lack of public infrastructure and add more apartments and commercial spaces–i.e. infill.
Redevelopment profoundly changed the face of City Heights in a relatively short period of time. The infill genie will never be put back into the bottle. If I were limited to only one contrasting element between Golden Hill and City Heights, it would be the use of redevelopment in the latter.
The median household income in City Heights is $38K, eleven thousand dollars less than the median income in Golden Hill of $49k. Median rents are slightly higher here, at $916/month. 41.4% of the population is foreign born, compared to 25.8% city wide.
While rents are still affordable to the taxi drivers, hotel maids, grocery clerks, school aides and retired people who live in City Heights, the low, low price of homes in the area- $375K– is well beyond their reach. Besides, many of those homes are being bought up with cash in short sales, because of the foreclosures in the area. City Heights is losing its owner occupied housing stock to the real estate developers and investors. The cycle of boom and bust begins yet again in City Heights.
City Heights Historic Commercial Architecture
Unlike Golden Hill, there is no sense of equilibrium in City Heights among the disparate interests. It remains an energetic highly transient, culturally diverse community and it has little political clout. I don’t see that situation changing much in the immediate future unless the cost of housing stretches the financial limits of low wage earners here. At some point, there will be few places where they can afford to live in the city. We seem woefully unprepared and unwilling to deal with that possibility.
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Anna Daniels
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Here’s the really sad part of this ‘housing market recovery’ story: It’s another bubble, featuring the same flippers and bankers as the last bubble, as Heidi Moore points out in the Guardian today.
“House-flipping in California has reached levels not seen since 2005, according to the Wall Street Journal. This rise in price is, by all accounts, artificial. Housing, like all products, responds to the laws of supply and demand. When supply decreases – when there are fewer homes on the market – then prices will rise. This is what is happening now.
There is evidence that lenders are controlling the housing supply by reducing the number of houses for sale. Last year, AOL Real Estate’s reporting suggested that as many as 90% of available properties were not even really on the market, but just polished for sale and being held back to keep supply low.
Then, last month, three major banks, including Citigroup and Wells Fargo, halted all their sales of homes in foreclosure; this also reduced the supply of homes on the market. The reduction in housing supply, then, is largely artificial, designed by the banks and institutions that hold thousands of houses and thus have the most to gain from higher house prices.
The result is what looks like a housing recovery to the rest of us, but is, in fact, something of a trap. Fitch, the ratings firm, issued a warning that the alleged recovery in housing is moving too fast and could reverse.”
Read the full article at:
I am a home owner with little left on my mortgage and I am not doing a happy dance about home prices heating up–“seller’s market” and “the return of the bidding wars!” Haven’t I heard that somewhere before?
The hype is a manufactured smoke screen, as you note Doug, of the continuing transfer of wealth to the 1%.
The whole last housing cycle (and likely the one we’re in now) is a massive transfer of wealth upward – the middle class was loaned money they largely couldn’t afford to pay back, they bought homes at inflated prices from investors, then those investors waited for the inevitable bubble burst due to exploding short-term adjustable loans and bought the homes back for pennies on the dollar. Now they’ve been selling them back to us at again-inflated prices that they’re driving through artificially low interest rates (at least they’re long-term rates this time) and by holding back supply (do a search on “shadow inventory” sometime).
Meanwhile, the working class and the middle class that got burned in the last cycle sit by as rental rates, which briefly stalled, again begin their march upward. I just got my invitation to sign a new lease at a higher rate or to get out of the apartment I’ve lived in for the last five years…and all I can do is feel lucky I’m only getting dinged an extra $25 a month.
Dave- I’ve been wondering if renters are now being faced with increases. When we talk about the last housing bubble, it is usually in terms of the inflated cost of home ownership. I was working at the library at the time, and I was floored by the number of senior citizens who were coming in, dazed because their rents were shooting up. One senior friend’s rent jumped a couple hundred dollars in less than a year. This was financially and emotionally devastating.
Do you think we will see the condo conversions resume? Condo sales seem pretty flat in City Heights, although investors may be snapping them up too.
And yes, it is a massive transfer of wealth upwards. It seems that this is what we do best.
Those of us who are not exactly in the rich bracket may have to simply lower our expectations and accept the cards that are laid out for us. This is a situation that will only get worse over time with no light at the end of the tunnel. I hate to be such a downer on matters like this but I feel its reality. Home ownership for me and most people I know is completely off the table and out of the question, unless we want to move to some shit hole of an area. So glad I don’t have kids to worry about.
This town seems to be offering its people just one way to avoid poverty;
acquisition of real estate. And even that one has proved to come down
to buy and sell or be damned to foreclosure. With boom and bust for a
model very few can afford to hold onto a house just because they like it.
Bob– My neighbors making $27K a year aren’t snapping up real estate. They are the ones really feeling the squeeze in City Heights. People with underwater mortgages are still screwed. Those of us who managed to buy property decades ago and didn’t respond to the siren call of a credit line during the bubble are the stabilizers–and lucky ducks, but there aren’t that many of us. City Heights is a predominately renter community.
Good to hear, Doug, recognition of the Return of the Bubb;e!
I remember the plaintive cry from Voice of San Diego for months”Is there a housing bubble?” POP. Duh!
Real estate interests still play with our lives and the public says “what can we do?”
The answer is RENT CONTROL. Increase taxes on property sales, stop the creation of low income rental support to an artificially contrived “market rate”, meaning the highest rate an agent can get for a property. Tell real estate owners what they can charge and expect subsidies, not the other way around.
And a note about our zoning: Golden Hill/South Park is on the park, a treasured resource of urban almost -wilderness. If City Heights had been able to preserve some wilderness , its development would have been completely different. Yes, urban dwellers crave exposure to nature more than anything.
Laurie- your suggestions of rent control, taxes and new subsidy strategies are the kinds of policy alternatives that San Diego’s elected representatives don’t want to pursue. That is a problem.
City Heights does have wilderness areas, south of University. There is a whole system of canyons that are part of the Chollas Creek watershed. A few apartment complexes were constructed at the bottom of a couple of canyons, (60’s?) then there was a push back from the community and a moratorium on building there. Slowly over the decades there has been a recognition of the importance of those canyons and the need to protect them. Urban dwellers crave a myriad of things; real estate developers crave a myriad of things. Exposure to nature can and does get lost in the competition.
A large percentage of new real estate sales (I think about 30%) are cash deals. So you know these guys are investors and not average middle class who would have to have a mortgage.
The next bubble to burst will be the stock market. Everyone is so excited about how much it’s going up, but the stock market’s rise is not based on sound fundamentals. It’s based on thin air just like the real estate market in 2007. When it bursts the hedge fund guys will short it just before it does. As usual the rich will profit as much on the way down as they did on the way up. As per usual the average guy will get screwed again. Not until the average guy wakes up and realizes what’s going on will there be any stability for the average person. You just can’t do what everybody else seems to be doing and cheer for the stock market.
I think both the new housing bubble and the new financial investment bubble are both dangerous. We have done nothing policy wise to assure that our national economy will not sustain irreparable harm from their still unregulated excesses. On top of that, the student debt issue is also going to come home to roost.
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Thank you Ana for all your amazing articles and for including taxi drivers in the narrative of City Heights and beyond! This article in particular speaks to the importance of good, well paying jobs for our immigrant communities…which taxi driving is not. Right now we’re reaching out to our City Heights community to help taxi drivers and their families change city policies so that their jobs and lives are more stable. We have hope that some of Mayor Filner’s ideas like taxi reform continue so drivers can contribute, as they all want to, to the betterment of City Heights.