San Diego is one of the richest cities in the wealthiest state in the country, but the crushing weight of our housing prices has resulted in most San Diegans struggling to make ends meet. There is no neighborhood in San Diego where someone earning minimum wage can afford decent housing — a minimum wage worker would need to work 125 hours a week to afford current average rents.
Even for those with good-paying jobs, a projected median housing price of over $1 million is a tremendous financial burden to bear. It is clear that housing costs are not only hurting our lower-income neighbors, but middle-class workers as well, while stifling business competitiveness and entrepreneurial innovation.
We need new, bold solutions to make our city livable again. That requires us to stop the sideshow arguments that demonize developers and government alike, because everyone has a role to play in solving this crisis.
One thing is abundantly clear — the private market alone is not going to create affordable homes at the scale we need. We need a public option for housing, akin to the progressive public option vision for healthcare in the United States.
Mayor Todd Gloria’s Housing for All plan highlights the ability to build homes at city facilities. I agree with this approach. Here’s how the City Council can help fulfill that vision with high-quality municipal housing.
Our City Council should prioritize updating the city’s General Plan Housing Element to establish a social housing program utilizing public land, with the ambitious goal of building 50% of the state-mandated 100,000 homes for the city’s Regional Housing Needs Allocation over 10 years. The goal should target producing approximately 550 new, high-quality affordable homes a year in each of the nine council districts.
This rate of construction has been far exceeded in other cities around the world. Helsinki, for example, drastically outpaced this rate, building more than 600,000 municipal homes in 10 years.
This social housing would create revitalized urban villages that vary in size and scope, but target an economically diverse and sustainable mixture of residents. As an example, 25% could be rentals for residents earning 100-140% of the area median income, prioritizing public workers like teachers, police, and healthcare workers to comfortably live in the neighborhoods they serve. We should target another 25% of these new homes for greatest affordability, financed by expanding established mechanisms like project-based HUD and VA housing vouchers.
Such a program should include homes made available for purchase at both deed-restricted affordable and market rates. A broad mixture of renting and sales will allow for revenue neutrality for the city, while the land itself will constitute the principal subsidy.
To help fund a robust social housing agenda, our city should join the county, community colleges, transit systems and school districts to establish a multi-jurisdictional public land bank. Such a public bank should have the ability to secure general-obligation bonds, obtain property, lease property, and the ability to hold underdeveloped land-tax free for future development as a hedge against gentrification.
Instead of auctioning off public “surplus” land, or leasing to hoteliers and developers, I believe we can get a better deal by holding the land in city ownership. Reducing the overall cost of affordable housing development by utilizing public land shaves off a significant overall driver of cost.
With land banking in the Twin Cities for example, $109 million in land acquisitions were leveraged to foster development of over 3,500 units of housing. Recent studies have shown that the “soft cost” of government construction and ownership is 25% of the total cost of a unit compared to 40% of private development which requires, among other things, paying investors windfall profits.
Detractors of municipal social housing will give us red-herrings about “housing projects” of the past and the politics of social housing. Unlike the past public housing projects, which were “designed to fail” and “designed to be segregated,” social housing builds mixed-use, integrated, multi-income dwellings designed for quality and affordability. And quality, affordable, city government subsidized housing is supported by voters across the political spectrum.
In this all-hands-on-deck moment, there is a critical role for the government to play in building the housing we need. Cities like Singapore and Vienna have invested in social housing with stunning results for affordability. Now, cities in Scotland, New Zealand, Finland, and even the University of California, are joining a new push for municipal housing. San Diego should join them.
Pooling together and building on public assets — in community college parking lots, city buildings, and along transit routes — would represent one of the largest investments in affordable housing in U.S. history. With the failure of the current system, it is time to create a public option for housing in San Diego.
Joel Day teaches global public policy at UC San Diego. He lives in Clairemont and is a candidate for San Diego City Council in 2022.