San Diego's Housing Situation Is Bad, But Getting Better

by Brian Schrader

San Diego's recent housing reports show just how far the city has to go to meet its goals, and how far it has come.

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San Diego needs more housing. The good news is that, according to the most recent Annual Housing Report, San Diego seems to be in the middle of a housing boom with new, denser construction underway everywhere from Downtown to Uptown, as well as into the Mid-City region. The bad news is that even with this sizable increase in construction over the past two years, San Diego is still no where close to having enough housing.

According to that same report, only 55.3 percent of the over 88,000 housing units needed under the previous eight-year Regional Housing Needs Allocation (RHNA) cycle were actually built, and nearly 85 percent of these units were intended for households making well above the area’s median income. While affordable housing construction has picked up dramatically since 2018, the city has a long way to go before it approves construction for the number of units required to meet its housing demand.

San Diego's Progress Towards State Goals

The housing situation in San Diego was further complicated this month, when the next eight-year RHNA cycle targets were announced. This updated version of the plan calls for a total of 108,036 housing units to be constructed by the end of 2029 in the city of San Diego, with even more units needed in the surrounding area. This new allocation represents a nearly 23% increase in city housing stock needed before the end of the decade.

On a positive note, while the previous eight-year cycle came to an end with few units actually constructed, over the last two years there has been a sharp uptick in the number of affordable housing projects that have been approved and that are under construction. In 2020 the city approved 68 new affordable housing projects totaling over 700 units, compared to just 15 two years earlier. Similarly, the annual number of affordable housing projects for which construction has started has more than tripled since 2018.

San Diego's Affordable Housing Construction over time

The report is pretty lack-luster, but the good news is that it's trending up!

In another promising change, San Diego leaders are becoming increasingly enthusiastic about the benefits of denser housing, especially for lower-income households and those currently unhoused. These days many leaders and experts understand that housing and homelessness are deeply connected, and that a lack of affordable housing is a direct contributing factor to the homelessness crisis that has impacted California and San Diego specifically.

In an effort to increase the availability of affordable housing, Mayor Todd Gloria recently announced a new Homes For All of Us package which, among other things, aims to bolster the city’s "Entry-Level Housing". The details of this package are still being worked out, but the plan aims to construct new single-room occupancy (SRO) units "to provide more entry-level living options for the unhoused population". SROs are "one of the oldest, if not the oldest form of naturally occurring affordable housing," according to the office of City Council-member and Chairmen of the City’s Land Use and Housing Committee, Steven Whitburn. SROs offer inexpensive housing to those on the last rungs of the housing ladder, and San Diego could use a lot more of them.

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For years, city regulations have discouraged the construction of both new SROs and affordable micro-apartments, preferring instead to simply preserve the existing SRO supply. But it seems that San Diego may finally be ready to undergo a desperately overdue transformation, and build housing for those who actually need it.

While the last decade of housing construction left a lot to be desired, City leaders should be applauded for working to change course and increase the supply of housing in the region. The progress in the past two years represents a departure from San Diego’s prior anti-housing policies. If progress continues to improve this decade, San Diego will be significantly closer to becoming a place where everyone can afford housing. For now though, it’s too early to tell whether 2020 was a momentary break from the status quo, or the start of a journey to a new normal.

Assuming the latter, it’s also difficult to know whether the quickening pace of housing construction will be enough to counter the increasing demand. This would be crucial to help stabilize both soaring housing prices and rising rents. For the first time in a decade, San Diego is finally trending in the right direction, but for now there is still a long road ahead.

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