Home under construction
A home under construction in California. Photo via Wikimedia Commons

To make homes affordable in San Diego local government needs to privatize the permitting process, waive exorbitant permit fees associated with the construction of auxiliary dwelling units, and incentivize the building of affordable housing projects by reducing the cost to build. 

Housing prices in San Diego have risen 15.4% in a year.  Wages will never increase at the same rate, so for the average San Diegan qualifying for a home is unattainable. In order to purchase an average priced home in San Diego, a homebuyer must earn roughly $139,200 a year –approximately double what the average worker makes in San Diego.  

Elected leaders have been touting their support for affordable housing for years, but the opposite has occurred. Homes are more expensive relative to income today than they were a decade ago.

Government’s default solution to make housing affordable has been rent control, but rent control makes homes even less affordable as landlords remove their properties from the rental market thereby further limiting the supply of housing and driving up rental rates.

To help make homes affordable, government needs to streamline the building process. One sure way to do that is by privatizing city permitting to cut red tape and drive economic development.  

Currently, the permitting process in San Diego is time consuming and expensive. To make the process more cost-effective San Diego needs to replicate what officials did in Phoenix — shift a significant portion of the planning and inspection functions to the private sector.

Phoenix has instituted what’s known as a “self-certification” model, which means architects and engineers who have been through city training are able to submit plans and walk out with a permit on the same visit. That includes all new construction up to 75 feet in height, all tenant improvements, and even historic preservation. 

Regulatory costs to build a home are high in San Diego, representing between 34% and 51%  of the average cost of building housing. Local government has the ability to manage regulatory costs and make homes more affordable by waiving or substantially reducing permit fees for affordable housing projects and the construction of auxiliary dwelling units commonly referred to as granny flats.

While permitting fees can serve an important purpose, they can also add up. Local government can encourage the development of new affordable housing by waiving these fees for qualifying affordable housing projects.

There are a variety of ways that cities can make fee waivers available to developers of qualifying projects. Typically, developers need to submit an application for the waiver to the city, along with documentation proving their intention to comply with eligibility requirements. Once the application has been approved for a qualifying project, the permit fees are waived, lowering building costs. 

The definition of affordable housing is that the rent or a mortgage plus utility payments total 30% or less of a household’s gross income. Households that pay more are considered cost-burdened and may have difficulty paying for other necessities such as transportation, food, and medical care. No one should have to choose between paying their rent or paying for food or medical care.

Affordable housing is for those who make a modest income such as restaurant and hospitality workers. Some say if you cannot afford to live in San Diego then move to a city that is less expensive. But that reasoning is short sighted and unrealistic.

Our service providers need to be able to live in the same city they work in. And the lack of quality, affordable housing can exacerbate social issues such as homelessness. San Diego is already in the top 10 of cities with the highest homeless population in the nation. 

There is no single solution to tackling the affordable housing and rental crisis in San Diego, and we will most likely need a multifaceted approach to increase the number and affordability of homes. Therefore, we must encourage our elected officials to take the bold steps needed to make homes affordable by privatizing the permit process, waiving permit fees associated with the construction of auxiliary dwelling units and further ease the restrictions surrounding new affordable housing construction in general.

With proper planning and leadership local government can help make the dream of homeownership more attainable for San Diegans. 

Mark Powell is a real estate broker and a former San Diego County Board of Education member.