Panelists painted a bleak picture for the future of affordable housing in San Diego during a Wednesday luncheon held by the Society for Marketing Professional Services.
As the cost of housing has risen, the median income hasn’t kept pace, creating a huge affordability gap, said Anne Wilson, senior vice president of Community HousingWorks.
San Diego has a deficit of 100,000 homes; that number reaches 1 million across the state.
“I would venture to say that California has a permanent affordable housing problem,” Wilson said, adding that economic impacts will trickle into the rest of the economy.
Panelist Peter Dennehy, of Meyers Research LLC, laid the economic framework: San Diego’s population is increasing by 50,000 each year. Those younger than 35 have the lowest rates of homeownership, he said. Median home prices are hovering about $500,000 and the median rent is $1,500.
Thirty percent of income is standard these days to spend on housing, according to the U.S. Department of Housing and Urban Development.
For those living on about $24,000 of Social Security, 30 percent would be about $600 per month. Wilson said how bank tellers, hotel clerks, teachers, restaurant workers and even Qualcomm employees may face similar situations and would not be able to meet that threshold on housing prices; they’ll likely be paying closer to the average two-bedroom cost of $1,360.
“All those people are going to have a hard time finding an apartment in San Diego,” Wilson said. And that affects schools, health, businesses, the county’s economy, neighborhood stability, crime and the environment.
Spending more than 30 percent on housing limits what families spend in other sectors as well as their capability to save.
Options for better situations are limited, Wilson said, as these people pay higher percentages of their income, move frequently, live far from work (adding expense to their commutes), live in poor conditions (adding health costs to themselves and society) or become homeless.
Wilson’s Community HousingWorks offers rental units in 31 communities, along with assistance for first-time homebuyers. One of its newest projects is Kalos, an 83-unit sustainable building on one acre in North Park.
Located near high-use transit lines, major employment centers and neighborhood amenities, Kalos has a reduced parking ratio that helped keep costs down.
Wilson said that the city needs more projects such as this, although most new apartments being built are market rate, with a median rent of $1,500 per month.
Rent increases are likely to become a huge public policy concern in the coming year or two, Wilson predicted, and businesses will struggle to retain young talent.
Changing the ever-increasing affordability gap would require work on many sides of the equation – from lowering construction costs and boosting incomes in many industries to facilitating policy changes on a higher level.
Wilson said she has high hopes for Assembly Speaker Toni Atkins, D-San Diego, who has proven to be an advocate for affordable housing and its role in communities. Wilson hopes more sources of money are directed toward affordable housing.
Panelist Arnulfo Manriquez, president and CEO of the Metropolitan Area Advisory Committee, echoed the need for a permanent funding source, rather than having to take bond issues to voters.
MAAC, a nonprofit founded in 1965, has developed nearly 1,000 affordable housing units across the county, and they’re intended to be sustainable and affordable for at least 55 years, Manriquez said. Such requirements present a set of challenges for development.
Architectural design is an important component in keeping costs down, as well as ensuring tight deadlines are met.
He described the evolution of one of MAAC’s latest projects as a result of dozens of community meetings. By compromising on some assets – such as breaking the project into two buildings to allow for a walkway, and building townhomes as a transitional buffer on the side facing a residential area -- he said the neighborhood grew more comfortable with the development.
“Our affordable housing developments have to shine,” Manriquez said. “Just because it’s affordable housing doesn’t mean it doesn’t need to be a good-looking development.”
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