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Multifamily industry clashes over DeMaio endorsement

Within the multifamily housing industry, affordable housing advocates and property owners don’t always share legislative priorities. Earlier this month, those differences spilled into the San Diego mayoral race.

In announcing its endorsement of Councilman Carl DeMaio in San Diego’s mayoral race, the board of directors of the San Diego County Apartment Association (SDCAA) said he was the candidate to provide affordable housing to San Diego’s middle class.

That led a group of affordable housing advocates to sound off on the effect DeMaio’s policies would have on affordable housing. Their comments were compiled and distributed by Evan McLaughlin of San Diegans for Bob Filner for Mayor 2012 in an email titled “DeMaio’s landlord endorsement demonstrates his opposition to affordable housing.”

The dueling statements issued highlight the disparate outlooks of stakeholders in the city’s multifamily housing industry.

Supply-side property owners and developers see the cost of housing, and the regulations and development fees that figure into them, as the primary cause of the issue -- as does DeMaio. Many affordable housing advocates and labor leaders, meanwhile, point to the other side of the equation — household incomes — to explain San Diego’s notoriously expensive housing.

The SDCAA represents companies and individuals who own or manage rental housing units in the city. The association provides resources and education to its members, but is also a major legislative advocate and has its own political action committee, SDCAA PAC.

It fights against issues such as water rate increases, attempts to levy taxes on short-term rental properties and a city ordinance requiring rental owners to establish cause and provide 60 days notice before evicting tenants. It also supports issues important to the local building industry, like deferring developer impact fees, but also general issues such as the proposed 2010 half-cent sales tax increase, Proposition D.

“In addition to his leadership on policies to keep the cost of housing affordable, Carl has demonstrated his commitment to sound fiscal policy, improving infrastructure deficiencies, and is a strong advocate for small businesses,” SDCAA President John Modlin wrote in a press release announcing the endorsement.

Modlin’s release said the board favors the self-styled small government conservative for his opposition to tax and fee increases and his understanding that “government mandates can impede growth, impose costs and result in more costly housing for the middle class.”

McLaughlin’s release, meanwhile, said the DeMaio campaign’s announcement of the endorsement, by emphasizing affordable housing, was attempting to spin the news to appeal to moderate voters. DeMaio’s record, it said, was clear on his position on affordable housing.

"Supporting affordable housing means ensuring that if you work in San Diego, you can afford to live in San Diego," said Nico Calavita, professor emeritus at San Diego State University’s school of public affairs. "Mr. DeMaio has undermined policies and programs in support of that goal. Saying he is a supporter of affordable housing is preposterous."

In its endorsement, the SDCAA pointed to elements of DeMaio’s policy outline, "Pathway to Prosperity," and its emphasis on regulatory reform updating community plans and supporting mixed-use, urban infill development as proof of his commitment to affordable housing.

The policies in "Pathway" directed at affordable housing are consistent with his proposals on most other issues. He suggests rolling back regulations and fees, implementing performance audits on government spending.

“Too many San Diegans are struggling with the cost of housing, and I’m honored to have support from a key segment of the housing industry that is working to provide affordable housing options to our middle-class families,” DeMaio wrote in the endorsement release.

To address housing prices, "Pathway to Prosperity" calls for immediate updates of community plans, focusing new development in dense neighborhoods, and suggests making permanent the temporary deferral of five types of development-related fees. Deferral allows developers to pay certain fees at the time the project is completed, when they have more cash on hand, rather than when the project breaks ground.

DeMaio’s policy guide also calls for a performance audit to see how efficiently state-provided affordable housing funds are spent; implementing performance audits on spending and city departments is a hallmark of DeMaio’s "Pathway to Prosperity."

But those ideas are precisely the problem, according to Betsy Morris, former CEO of the San Diego Housing Commission.

“In high-priced areas like San Diego, the gap between the cost of rent and wages for working families is too great to be bridged by phantom 'regulatory relief,'" she wrote. “A prudent leader would recognize that the public has a stake in guiding investment to expand infrastructure in support of new housing and community benefits.”

DeMaio also calls for eliminating San Diego’s “Affordable Housing impact fee,” or the “jobs tax” as he calls it, on certain projects. The fee is charged to construction projects based on jobs created and is used to provide more affordable housing.

“No other city in the region charges businesses for expanding operations in this manner and puts San Diego in a severe competitive disadvantage,” "Pathway" reads. “That is why (DeMaio) has voted to block any increases to this fee when it has come before him at Council.”

The Republican DeMaio is running against longtime Democratic Congressman Filner in the November general election after the two candidates finished in a virtual tie to advance from the June primary.

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