On April 4, 2018 the editorial board of the San Diego Union-Tribune published the editorial: “Demolish or preserve older units? San Diego’s new housing crisis conundrum”in which it posed the question of whether local efforts should go into preserving expiring affordable housing units or building new units? The answer is: our community must to do both! Doing one and not the other will only lead to more displacement and homelessness.
Problem #1: There are many affordable housing properties in San Diego County that have covenants which mandate that the buildings charge rents far below market rate. Unfortunately, many of these covenants are expiring and the building owners will have to decide whether or not to continue providing affordable housing.
Solution #1: The main challenge in preserving these properties is finding new permanent long-term sources of financing to keep rents affordable for tenants. That’s where the San Diego Housing Federation’s proposed $900 million Affordable Housing Bond Initiative comes in. Money from the bond will provide financing to buy these properties and ensure their long term affordability. Other California communities like Alameda County, Los Angeles and Santa Clara have passed similar measures.
Action Item: VOTE: San Diego Housing Federation $900 million Bond Initiative
Problem #2: Similar to preservation, the main issue in building more affordable and homeless housing is finding new sources of short and long-term money. Let me explain; there are three steps in financing affordable and homeless housing. The first step is known as site or building acquisition/predevelopment, namely buying a piece of land or an existing building and beginning the process of hiring architects, performing an environmental assessment, and securing the necessary entitlements for the project. The second step is obtaining a construction loan, which a traditional bank can provide, to build or rehab the affordable and/or homeless housing project. The final step is securing permanent sources of financing for the project which subsidizes rent prices far below the market.
Solution #2: a) To address the first step, LISC San Diego is currently creating a $50 million Housing Affordability Fund to provide flexible loans and longer loans to value carrying costs to buy land or a building and begin predevelopment. b) To address the lack of capital in the third step we urge voters to approve the San Diego Housing Federation’s $900 million Affordable Housing Bond. The bond money is crucial in providing the critical monies for a project and is often the determinate of whether a project gets built.
Problem #3: Local land use regulations make it very challenging to build affordable and homeless housing.
Solution #3: To ensure that affordable and homeless housing projects get built when they have secured their funding, the City and County of San Diego need to pass an ordinance that will allow any project that is 100% affordable or homeless housing and located in a multi-family zoned area to be processed ministerially.
Action Items:
San Diego is tantalizingly close to being able to address the lack of affordable and homeless housing and everyone has a role to play - residents, government, the private sector and philanthropy. The City and County must give residents a chance to vote YES on the bond while passing an ordinance to allow for ministerial approval of these projects; residents will be asked to vote YES for the $900 million and the private sector and philanthropy need to make investments in LISC’s $50 million Housing Affordably Fund. This problem is not insurmountable. Together everyone can help ensure that we are preserving and building more affordable and homeless housing.
Who Is LISC San Diego?
LISC San Diego is a nonprofit financier of affordable housing. We have been in San Diego for the past 27 years and have helped to finance the construction of 6,300 affordable housing units saving resident approximately $30 million dollars a year.