San Diego Free Press

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Is Affordable Housing in the City of San Diego an Oxymoron? Part 1

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Has the City squirreled away millions of dollars in off-budget funds which could be used for affordable housing and housing for the homeless?

afordable housing coverBy Katheryn Rhodes and John Lawrence

In the City of Palo Alto, if you make less than $250,000 a year, you’re eligible for a housing subsidy. The city council has voted to study a housing proposal that would essentially subsidize new housing for what qualifies as middle-class nowadays, families making from $150,000 to $250,000 a year.

Here in San Diego, the situation is not much better as teachers, police and government workers cannot afford to live in the city they work in. So if middle class, college educated professionals can’t afford to live here, how can anyone else lower on the economic ladder afford to live here either? In particular, those on the bottom most rung, the homeless, can’t even afford a foot in the door.

According to the San Diego Housing Commission’s report Addressing the Housing Affordability Crisis in San Diego (November 26, 2015):

This report finds that nearly 50% of San Diegans face housing affordability challenges in rentals and home ownership and over 70% of San Diegans are priced out of the home ownership market….

The City of San Diego is one of the most unaffordable housing markets in the nation. Zillow recently surveyed nearly 300 cities and found San Diego to be one of the most unaffordable six markets in the United States. Both renting and owning in San Diego are increasingly out of reach for average families. The average home price in San Diego is $506,000 according to Zillow – affordable only with an income over $80,000 per year. The average two-bedroom rental in San Diego is $1820 per month, affordable only with an income of $72,800 per year. …

San Diego’s median income is approximately $73,000 for the city, which is consistent with our estimate that about half of San Diegans are unable to afford a minimally sized unit. A minimal unit would be priced at approximately $400,000 based on current San Diego home prices.

Translating the affordability challenge into wages, the Low Income Housing Coalition estimates that nationally, in order to afford a modest, two-bedroom apartment in the U.S., renters need to earn a wage of $19.35 per hour.

Good luck with that as minimum wage workers will be making $15 an hour 6 years from now and still will not be able to afford a modest two bedroom apartment, that is if rental prices do not go up in the meantime! Fat chance of that. SANDAG estimates that, as the production of new housing falls behind, only 6% of the housing that is being constructed is for people with low incomes. Obviously, there’s more money to be made by building housing for upper-income people.

The report continues: “As of 2013 there were approximately 120,000 extremely low-income families and only 20,000 affordable units available for them in San Diego. The pace of new construction for very low income, low income and moderate-income units is lagging severely behind the estimated need in San Diego …” To say the least!

Affordable major markets chartIt doesn’t have to be this way. The City has squirreled away millions of dollars in off-budget funds which could be used for affordable housing and housing for the homeless. Besides that the City of San Diego owns numerous parcels of land on which affordable housing including housing for the homeless could be built. Since they’re not recognizing the emergency situation that lack of housing represents, they are actually in violation of a state mandate,Senate Bill 2 from 2007, authored by Senator Cedillo which stated the following:

This bill would add emergency shelters to these provisions, as specified, and would add provisions to the housing element that would require a local government to identify a zone or zones where emergency shelters are allowed as a permitted use without a conditional use or other discretionary permit. … By increasing the duties of local public officials, the bill would create a state-mandated local program.

That was 9 years ago and the City of San Diego has done nothing about it. This bill “create[s] a state-mandated local program.” Still the City insists that emergency housing like the Tiny Homes project requires a Conditional Use Permit (CUP). No it doesn’t! The corner of 17th Street and Imperial Avenue is identified on a 2006 general plan map as one of many locations that the city has deemed suitable for emergency shelters. Yet Arian Collins, supervising public information officer for the City of San Diego, said a conditional use permit (CUP) would be needed to put shelters on any of the sites identified in the map. Has he read SB-2 Cedillo which says that, for zones where emergency shelters are allowed, there is no need for a CUP? Are these people dumb or ignorant or they just don’t care?

San Diego Has the Money to Build Affordable Housing

Civil engineer Katheryn Rhodes has identified several funds where the City, the County, the San Diego Housing Commission and Civic San Diego are hoarding cash that could be used for emergency shelters and/or affordable housing or even pay for Emergency Shelter Tents and Tenant-Based Rental Assistance (TBRA) Housing Vouchers. There’s $28.7 million in the Low and Moderate Income Housing Asset Fund (LMIHAF). There’s also $259 million in long-term assets that can be leveraged by using it as collateral and issuing bonds for much more.

So why is the City contemplating issuing over a billion dollars in bonds for a new “Convadium” which, by the way is sure to be an architectural monstrosity with a convention center in the basement of a football field, when it is not doing its duty as mandated by the state of California to build emergency shelters for the homeless and affordable housing?

The Successor Agency (SA) to the Center City Development Corporation (CCDC) which facilitated the building of high-rise condos in downtown San Diego by private developers has a lot of money at its disposal that’s not being used that could be used to build affordable housing. According to Katheryn, they have $66,907,786 in unencumbered bonds plus $3,369,053 in reserves and $21,727,112 in other fund accounts. The Successor Agency cash can be used for any Capital Improvement Projects (CIP) and infrastructure projects including Affordable Housing with the approval of the City Council. Why won’t the City Council take action?

CCDC President Nancy Graham was taking money from developers who were building the luxury condos tearing down Single Room Occupancy (SRO) hotels that housed many who have become homeless in the process.

 

sdhc logoThe City Council, as the redevelopment successor agency, has turned the winding down of CCDC activities to Civic San Diego. Now Civic San Diego has the cash to build affordable housing so why isn’t it doing it?

The Capital Outlay Fund has a Cash Reserve Fund Balance of $125,729,000 as of June 30, 2015. When properties are sold, normally any cash money from the sale goes into the Capital Outlay Fund. The Balance in FY-2014 was $40,878,000. The balance in FY-2013 was $35,775,000.  So it’s building up with no purpose in mind. Money is just being hoarded.

The FY-2015 Comprehensive Annual Financial Report (CAFR) shows a Public Facilities Financing Authority (PFFA) Cash Reserve Fund Balance of $170,448,000. In FY-2014 it was $90,397,000, and in FY-2013 it was $93,902,000 so it too is building up with no purpose in mind. This does not even take into account JPA bonds. So there is plenty of money that could be used for affordable housing and emergency housing for the homeless. If San Diego wanted to get them off the streets, they could take action to do so tomorrow.

The Mayor’s Budget

In his new budget released the other day, Mayor Kevin Faulconer did not even mention affordable housing, and gave only lip service to homelessness. There is something in there about housing 1000 homeless veterans, but what about the thousands of homeless mothers and children? There’s something in there about providing 24/7 access to restrooms for the homeless and getting serial inebriates off the street, but these are drops in the bucket compared to what needs to be done. The proposed FY 2017 budget calls for no expenditures from the Capital Outlay Fund which could be used for affordable housing. There is likewise no expenditure called for from the PFFA  Funds.

The San Diego Housing Commission (SDHC) budget, which is separate from the City’s budget, can be found here. From their website it sounds like the SDHC is doing a lot about affordable housing. The question is are they doing all they can and are they using all available resources to do it?

This is from Civic San Diego’s website which is also separate from the City’s budget:

“Since CCDC’s (now CivicSD) inception in 1975, more than 3,500 affordable housing units have been created in downtown neighborhoods, using redevelopment funds, and more than 450 units are in the pipeline. To date, $130 million in downtown redevelopment funds have been invested to produce affordable housing downtown. An additional $38 million have [sic] been committed for projects currently in the pipeline.”

This all looks good on paper, but then why are there still so many homeless and the numbers are only getting larger? The spending plan will be presented to the relevant City Council committees starting this week. Council members are expected to comb through the budget in May and adopt it in June.

San Diego Has Land It Could Build Affordable Housing On

Not only is the money available, land is available as well. The City of San Diego owns several parcels of land on which affordable housing could be built. But instead of doing that, the City wants to sell the land and place the proceeds in the Capital Outlay Fund, another fund where money is accumulating with no declared purpose in mind.

The City’s Real Estate Asset Department (READ) is supposed to ask the public if there are potential uses for surplus property owned by the City, but has not consistently done so, or has advertised in a limited way. (See San Diego Commons at the Crossroads) At the Committee for Smart Growth and Land Use meeting on February 16, 2016, the items on the agenda were all about selling off surplus parcels, not asking the public if there were alternative uses for them like building affordable housing.

Regarding the State Government Code Article 8 on Surplus Land [54220]:

The Legislature reaffirms its declaration that housing is of vital statewide importance to the health, safety, and welfare of the residents of this state and that provision of a decent home and a suitable living environment for every Californian is a priority of the highest order. The Legislature further declares that there is a shortage of sites available for housing for persons and families of low and moderate income and that surplus government land, prior to disposition, should be made available for that purpose.

Did they? Hell, no. For example, the property at the SE corner of Jamacha and Cardiff has been cleared for sale in accordance with California Government Code Section 54220. City departments were also notified and given an opportunity to retain the property. No City department has any current or foreseeable use for the property and the property has been determined to be excess to the City’s needs. So why isn’t the property being used to build affordable housing? And there are tons of other city-owned properties that the City doesn’t need that could be used for this purpose as well.

Want to know more? I couldn’t find any contact information for Mary Carlson, Asset Manager of READ. Their website isn’t very informative either. Maybe that’s intentional.

Jay Powell has gone into this issue more extensively.

There are currently 28 properties throughout the City up for sale. …

READ is required by State Law to offer the property to internal and external agencies for a minimum 60 day period to see if they have interest in purchasing or leasing the property to provide low-income housing, park, and recreation or open space purposes, school facilities construction or use by a school district for open space purposes or for enterprise zone purposes if located in such a zone.

The READ files reviewed last December did not include a reply from the Parks and Open Space Department to the READ email sent July 16, 2013 initiating the for sale proposal. The noticing email basically said if we don’t hear from you in 60 days, we are proceeding with the sale.

It is getting pretty obvious that READ would rather offer the properties to rich investors and developers and pay realtor commissions than to have them developed for affordable housing or parks. By the way, who picks the lucky realtors who have commissions falling into their laps like manna from heaven?

Murtaza Baxamusa, PhD, AICP, Director of Planning and Development for the San Diego County Building and Construction Trades Council Family Housing Corporation, said:

America’s Finest City has an ugly problem.

The homeless population in San Diego is among the four largest in the nation and getting worse, with over 8,700 people living without shelter. [Actually several times that amount; that’s just the “official” count.] And while this kind of weather is rare in San Diego, it is not new, yet even after anticipating the storm for months and knowing the severity of our homelessness problem, there was marginal galvanization of resources by local government. Simultaneously, the city was able to commit hundreds of millions of dollars in public funds for supporting downtown development with an expanded convention center and a Chargers stadium that the NFL does not want, all of which will likely be built in the very neighborhood these people call home.

Next Time: Part 2 of 3 – Homeless Population Under-counted

John Lawrence

John Lawrence

John Lawrence graduated from Georgia Tech, Stanford and University of California at San Diego. While at UCSD, he was one of the original writer/workers on the San Diego Free Press in the late 1960s. He founded the San Diego Jazz Society in 1984 which had grants from the San Diego Commission for Arts and Culture and presented both local and nationally known jazz artists. John received a Society of Professional Journalists, San Diego chapter, 2014 award. His website is Social Choice and Beyond which exemplifies his interest in Economic Democracy. His book is East West Synthesis. He also blogs at Will Blog For Food. He can be reached at j.c.lawrence@cox.net.

Comments

  1. This article hits the nail on the head. City of San Diego: the burden is now on you to prove otherwise. We ALL need to ask our city representative to read this article and explain to us why they have not done anything. Let’s fill their offices to capacity with people there to get answers!

    • Call your council member with some questions about:
      “In his new budget released the other day, Mayor Kevin Faulconer did not even mention affordable housing,” and about,
      The numbers of city employees not living in San Diego, and
      Why “money is just being hoarded” in The Cash Reserve Fund (more than $125 Million)
      There are many lots on El Cajon Blvd. in mid-city, many of them within walking distance to shops and groceries. Why doesn’t the city for once live up to its promises of being America’s Finest Cities and The City of Villages, one of the failed advertising schemes put together by Vapor Mayor Sanders Faulconer. Instead, we get Ron Roberts’ Gaslamp Gondola and the Vapor Mayors’ beastly spawn, the Convadium.

  2. Just an honest question: if there housing stock for rent for the $100-200K crowd? Housing subsidies for them? Really?

  3. I think the problem is that the author is looking at this from the wrong perspective. If you operate from a paradigm where the expectation is that the players in this “industry” (and make no mistake, that’s exactly what it is) are legitimately interested in solving a problem, then of course you’re going to find yourself bewildered by the situation as it currently exists. If you can shake off this idealistic naivete and understand that what you’re really dealing with here is a rigorous network of self-serving bureaucrats deeply bedded with crony-capitalists and financial sector apparatchiks, things start making sense. As a former employee of this unholy cabal, I can tell you with complete confidence that the primary concern throughout this spiderweb of incestuous relationships is the growth of personal fiefdoms and the continued maintenance of their own “personal” war chests at taxpayer expense.

    Start looking at the situation from THAT perspective and you will then start asking the CORRECT questions, which are WHO are you going to find to go in and start cleaning this mess up? WHERE will you find a modern day Eliot Ness capable of getting the job done without being bought-off in the process?

    Stop asking “why” as if you’re trying to gain some insight as to what motivates the dragon to terrorize the townspeople below and just accept the fact it is the nature of the beast.

    Then go find yourself a dragon slayer…

      • Lol, seriously? I know a lot about the shortcomings of California’s water infrastructure and practical solutions which could be implemented to render us impervious to drought without buying water from Colorado… Perhaps I should get on that first?

    • Gonna need a rather large sword, Arthur!
      But if there’s any one in the Federal government who can investigate and prosecute these douch bags for violating State mandates, let’s get it done!

  4. Yes, a million here, a million there,but why doesn’t the City just set aside $10m to $20m of its hoarded funds and capitalize on its OWN bank? Pretty soon you would be talking about some real money for affordable housing, etc.
    Great article John.
    P.S. I agree completely Zare Daily’s comments above.

  5. I also agree with Zare Daily’s comments. The information in this article is ample evidence to prove the utter self-serving corruption of nearly all San Diego city officials. Basically, the city is owned and ruled by developers who use the officials as their pawns.

  6. City staff gets away with misinformation and hiding Cash due to purposely misleading the City Council and the public.

    The City of San Diego’s proposed FY-2017 Budget only reference 4 of the 5 City Agencies. Specifically omitting the Successor Agency (SA) to the former Redevelopment Agency (RDA). Shady. See Page 191.

    http://tinyurl.com/20160415b

    See Pages 186-188 where staff omits $261.4 million in anticipated new Revenue is not included in the Budget. City staff also claim that $2.5 Billion in previously approved CIP projects are ongoing.

    Comprehensive Annual Financial Reports (CAFR) for the Successor Agency (SA) are missing for FY-2011 to FY-2015. RDA CAFR end in FY-2010. See the bottom of the linked page.

    https://www.sandiego.gov/comptroller/reports

    • It seems they spend more money on personnel and staff than they do on building affordable housing on which they spend little if anything. Another bureaucracy the purpose of which is to feather its own nest, produce a lot of paper reports and cover their collective asses.

  7. John, Thanks for the very informative article, and the research you did to put it together. Surely there is a great need for affordable housing in San Diego for just about everyone but especially the homeless! The real problem is that it is just not “sexy” or influential enough. I t does not produce enough cocktail parties with the. “right” people. It is not “social Darwinian ” enough. Our church had a similar situation. We have a small amount of money to either do some good or start a project to build a new Sunday center. We could have trained some of our young people to go help in refuge camps or put it as a partial down payment towards a new center. Of course, the wealthier in our church wanted the fun and statis of building a new center which we did not need as we have only one half of our present center filled up on Sunday and it is perfectly pleasing, nice center. But they won out enabling them to party with top contractors and other influential people in our community so to hell with the poor refuges! Humans often want to be with the “beautiful” people, the fun parties and increase their influence! Woe to our “primitive” brain.

    • Thanks, Grace, for the compliments and all you do for the homeless, but Katheryn deserves most of the credit for the research. She’s done an amazingly exhaustive job on digging out all the details which put the City to shame for all they’re not doing to help the homeless. Their efforts amount to tokenism; they could be doing so much more.

  8. Wow amazing some of this I’ve been saying about. And the fact that they want to build this convordium to boost the padres hahaha laughing stock of baseball right now. And not to mention all the SRO buildings that a being shut down to make way for new ugly as hell wasted space constructions like the new federal court building. And you didn’t mention when they built alpha square the new SRO with tons of shotty workmanship and building problems displacing tenants already supposedly for mold not to mention when the moved everyone there from the metro, the metro sits vacant next to be demolished for the cities urbanization project of the East village better known as the bottoms. It’s disgusting how this city demoralizes the homeless finds nothing better to do than harrass the homeless. We are only trying to survive with minimal amount of help or no help at all because we are too normal for help from any agency. Something’s got to give. I’m tired of fighting this fight to survive and fight for my rights as a citizen of the US and being treated like I’m yesterday’s garbage. This city needs to do what’s right and thus far they are an epic fail

  9. In a word NO. Rich people are flocking to San Diego from all over the world, willing to pay sky high prices for new and used homes. There is now way poor families can afford to match them. Unless something happens to keep rich people out and substantially reduce the existing local population, “affordable housing” will never again happen in San Diego.
    Local affordable housing developers charge more per square foot for their structures than people pay for homes at market rates. In that situation, affordable housing is an extinct concept here.

  10. The whole point of the article is that the city has hundreds of millions of dollars stashed away in accounts and that money could and should be used to subsidize renters who can’t afford the skyrocketing prices. The city’s housing voucher program is one gigantic joke with a “waiting list” of 10 years.

  11. Kudos Katheryn Rhodes and John Lawrence on this excellent work of research and writing. I hope you have sent this on to the offices of every councilmember and the mayor. Knowing all of this, there is the temptation to throw up my hands in defeat, perhaps even move out of San Diego altogether. But what happens to the thousands of people living in despair if we do that? They are counting on us to persist, against a despicable force of greed and sociopathic lack of compassion. Thanks to people like Ms Rhodes, we now know that the money is there. The land is there. We need short term and long term solutions. Building affordable house, even if it began today, would not create sufficient housing for years. We need meantime solutions, such as the mico-communities of tiny shelters, overnight safe and legal parking, changes to lodger laws to make doubling-up viable for home owners and low-income tenants, and a renter certification program that will level the playing field for people with past credit problems when vying for the few available rental vacancies. These things can be implemented now. Let’s do it.

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