By Ray Ellis
Government is responsible for nearly half the cost of building a new home in San Diego. When you understand that, you understand why our city faces a housing crisis.
The San Diego City Council has declared a housing state of emergency for the past 13 years. Despite the attention to the problem, not much has actually changed. In 2002, less than a quarter of families were able to afford a median-priced home, worth $379,000, according to the San Diego Business Journal. Today, just 25 percent of families can afford to buy a home at the median price, which is now nearly $570,000.
San Diego today is the ninth least-affordable city in the country for homebuyers. The regulatory climate in our city — including steep fees for permitting and a lengthy, complex approval process — is harming our ability to produce housing that the majority of our residents can afford.
Economists from Point Loma Nazarene University calculated last year that government regulation and fees account for 47 percent of the cost of a new home in San Diego. Fees are a significant part of that, as are costly delays. If an updated community plan is not already in place, it can take 12 years or more before the first home is ready for sale.
These conditions make it economically infeasible to build homes for the middle class. Through August of this year, only 225 new homes have gone on the market for less than $500,000 countywide, according to the Building Industry Association of San Diego. That is unacceptable.
Lowering regulatory costs by just three percent, a change I am proposing, would make a significant impact on the availability and affordability of housing in San Diego. By slightly reducing the government burden, we can give families access to housing they can afford, and we can create more jobs associated with home construction.
Housing affordability is an issue that impacts everyone in our city. It’s a pervasive problem that affects more than just the people who are buying or selling homes; it also hurts businesses’ ability to attract and retain a strong workforce, and it affects the stability and success of our schools. If we don’t develop and implement solutions now, future generations of San Diegans will suffer.
Fortunately, solutions to this problem do exist. Here are a few steps we could take to make a real progress on the problem:
- Focus on updating community plans throughout the city. The outdated process we use now takes too long and costs too much. The city recently took a step in the right direction by establishing a goal to complete each community plan update in three years, but that still doesn’t get us where we need to be. Making the process timely while maintaining open and transparent communication is critical.
- When we consider adopting new regulations that affect housing, we must conduct an economic analysis of their impact on the cost of construction. One bill that was debated in Sacramento this year would have increased the average cost to build a home in California by $58,000, according to the Building Industry Association. We must put a price tag on regulation impacts.
- We should add incentives to stimulate the construction of middle-class housing in order to boost business and job growth and provide future generations of homebuyers needed housing options.
- Activities in the planning department need to be tracked and benchmarks established. Stakeholders from the community and industry need to be included in this process.
- We can save time and reduce complexity by implementing a programmatic approach in which environmental and other planning documents are developed on a neighborhood and community level rather than on a project-by-project basis.
- Let’s develop an efficient process for developers and consultants that consistently demonstrates high standards for community involvement, innovation and regulatory compliance.
- Let’s learn from others. What can San Diego do to incorporate the best practices in cities like Phoenix, Houston or elsewhere?
We are at a critical point for the future of housing in San Diego. I want to ensure that our children and our children’s children can afford to live in San Diego so they can continue to learn, grow, and enjoy the quality of life that brought older generations to this city.
The market will not resolve our housing crisis on its own. We have to act. We have to make smart decisions. If we don’t, we’ll leave a mess for younger generations to sort out, and I know we don’t want to do that. Let’s leave them a better San Diego.
Ray Ellis is small business owner, community volunteer, and a candidate for San Diego City Council in District 1.