Dr. Lynn Reaser explains how regulatory costs and delays increase the price of housing. Photo by Chris Jennewein

A new study by Point Loma Nazarene University finds that regulatory costs and delays add 40 percent to the cost of building new housing in the San Diego region.

“This is one of the most important studies we’ve ever done,” said Dr. Lynn Reaser, chief economist at the university’s Fermanian Business & Economic Institute. “There is probably no more important medium- and long-term issue than the cost of housing in San Diego.

“Entry-level housing is becoming an endangered species,” she warned at a press conference on Wednesday.

The report comes days after SANDAG released a new regional plan saying the region must provide for 1 million more people in San Diego County by 2050.

Reaser’s report found that the cost of regulation and delay adds from $125,000 per unit in Santee to $282,000 in Carlsbad. She said these additional costs are enough to price two in five San Diego families out of the housing market.

In addition to the costs, it can take years to get all of the approvals to build new housing, as much as 12 years if a master plan is not in place.

“Time is the biggest demon,” she said. “No one really benefits from the time that is wasted in terms of bureaucratic delays.”

She said this isn’t a plea to help developers, but instead “a story about the school teachers and policemen who are struggling to meet their housing needs.”

Reaser said that San Diego needs to build 12,000 housing units a year to accommodate population growth, but has averaged less than 10,000 annually over the past nine years.

“This should be a wake up call for government,” said Jerry Sanders, president and CEO of the San Diego Regional Chamber of Commerce. “A lot of our workforce is having to live in other areas and facing long commutes.”

He added that the housing need isn’t for newcomers to the region, but for those families already living here. “We’re taking about supporting housing that allows our children and grandchildren to live near us,” he said.

Reaser said one of the ironies of the current situation is that if you own your own home, rising prices are a benefit and you may see nearby development as a problem. But many San Diegans are being shut out of the housing market in the process. “This has a significant impact on our social stability,” she said.

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Chris Jennewein

Chris Jennewein is Editor & Publisher of Times of San Diego.