Opinion

It’s Not Just About Subsidized Housing

It’s Not Just About Subsidized Housing

Photo by Sam Hodgson

Affordable housing development Ten Fifty B

Before members of the City Council voted to raise the linkage fee, the discussion seemed to touch on the same issues over and over .

fix san diego opinionThey repeatedly cited a recent study ranking San Diego as one of the least affordable places to live. They pointed out that wages weren’t keeping pace with housing costs. They expressed frustration over the level of poverty in our city.

The economy, local government and the resulting housing market have failed many San Diegans. I didn’t hear disagreement over this.

We agree on the problem. Here we have opportunities to solve it.

Housing goes hand-in-hand with high-paying jobs.

From an economic development perspective, the affordability of housing directly affects attraction, retention and expansion of high-paying employers – who bring high-paying jobs.

SEE MORE: No, San Diego Wouldn’t Have Lost Soitec to the Higher Affordable Housing Fee

Employers need to be able to offer a high quality of life, namely a paycheck that covers more than rent. Setting up shop in a city where housing is reasonably priced makes sense for their long-term success. In other words, when we make housing more affordable in San Diego, we create and keep high-paying jobs in San Diego.

Subsidized housing has to be part of the equation.

The city’s Housing Commission has several subsidized housing programs. The largest is the Housing Choice Voucher program, better known as Section 8. This program includes more than 14,000 low-income households and 40,000 individuals. Just over half (54 percent) of recipients are seniors or disabled. Subsidized housing is clearly a tool on our belt that we cannot afford to ignore.

But we also can’t afford to focus on subsidized housing alone. More than 45,000 people sit on the subsidized housing waiting list. Realistically, we will never be able to subsidize enough housing to reach all of them. If we don’t do something more, we will continue to fail tens of thousands of San Diegans

Whether housing is subsidized or market-rate, we just need more.

San Diego’s population is growing and subsequently so is demand for housing. With more people trying to buy homes or rent apartments, sellers and landlords can demand higher and higher prices. That’s when young families have to look outside of San Diego to purchase a home, and renters are squeezed ever tighter each month.

Every low-income household that wins a coveted subsidized housing unit is a household taken out of the private housing market. This drives down prices, making all housing more affordable – to a point.

That downward pressure on prices is limited by the number of subsidized units produced. According to the Housing Commission’s most recent annual report, the commission has produced 14,531 subsidized units since 1981, or about 484 per year.

In a 2011 report, SANDAG estimated that we need to build more than 88,000 new housing units by 2020.

Pro-affordable housing policies are crucial.

Some efforts are politically divisive, but it is clear to me there are also practical opportunities in front of us.

We could bring streamlined permitting to our neighborhoods like the former redevelopment agency brought to downtown. We could acknowledge the need to build upward by reopening the discussion about height limits. We could require fewer parking spots per housing unit where it’s appropriate.

We could even get creative by allowing developers to make smaller apartments downtown, known as “micro-units,” creating more affordable options for millennials and other San Diegans who prefer location to size.

But the cost of housing is only half of the problem.

We need policies to help us produce more housing units to balance out the growing population, but we still also need policies that bring high-paying jobs to San Diego.

Which brings us back to where we started: creating and keeping high-paying jobs. To solve San Diego’s housing crisis, we need to better promote the development of new housing units while simultaneously attracting and keeping high-paying jobs.

It’s a multilayered solution, but it’s one we can’t afford to do halfway.

Sean Karafin is an economic policy analyst at the San Diego County Taxpayers Association. Karafin’s commentary has been edited for clarity. See anything in there we should fact check? Tell us what to check out here. Want to respond? Submit a commentary.

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14 comments
Matt Finish
Matt Finish

Sean, you are correct that additional supply might alleviate prices, however do we really want that many more people in our city? It's a fair question to ask. Are we willing to put up with the additional traffic, scarcity of parking, crime and other costs that come with an increasing population? If more density is better, why not just turn our coastline into Miami?

My view is that there is a cold, hard, reality that none of the feel-good posts on this site ever want to admit:

San Diego is coveted not just by Americans, but by people all around the world. Those people have money, and they are willing to spend it to live in a desirable location. So you are not just in competition with Americans for space here, you are in competition with the world. No amount of welfare programs or other wealth redistribution efforts will change that. Governments cannot rule that the price of a good or service automatically become cheaper. It's a long-time fantasy of economic tyrants that simply never comes true.

Matt Finish
Matt Finish subscriber

Sean, you are correct that additional supply might alleviate prices, however do we really want that many more people in our city? It's a fair question to ask. Are we willing to put up with the additional traffic, scarcity of parking, crime and other costs that come with an increasing population? If more density is better, why not just turn our coastline into Miami?

My view is that there is a cold, hard, reality that none of the feel-good posts on this site ever want to admit:

San Diego is coveted not just by Americans, but by people all around the world. Those people have money, and they are willing to spend it to live in a desirable location. So you are not just in competition with Americans for space here, you are in competition with the world. No amount of welfare programs or other wealth redistribution efforts will change that. Governments cannot rule that the price of a good or service automatically become cheaper. It's a long-time fantasy of economic tyrants that simply never comes true.

Sharon Gehl
Sharon Gehl

I want to thank Mr. Karafin for his excellent article.
Since housing, like other commodities is a matter of supply and demand, increasing the supply of housing will make the cost of buying and renting more affordable for everyone. Fewer people will then need assistance; but as long as we have poor, disabled, and mentally ill, there will be people who need our help.

Sharon Gehl
Sharon Gehl subscribermember

I want to thank Mr. Karafin for his excellent article.
Since housing, like other commodities is a matter of supply and demand, increasing the supply of housing will make the cost of buying and renting more affordable for everyone. Fewer people will then need assistance; but as long as we have poor, disabled, and mentally ill, there will be people who need our help.

Jim Jones
Jim Jones

If San Diego is growing while affordable housing is so minimal, clearly we don't need affordable housing to grow San Diego. Increasing growth with taxpayer subsidized poor people only increases the problem.

The main problems keeping business away are taxes and red tape. Affordable housing programs increase both. They make it more expensive for a business to move here and more expensive for the high tech worker, who will not benefit from affordable housing since they make decent income, but will pay into it.

Affordable housing programs do not lower home prices, since the project housing displaces other housing, it already reduced the number of units available, while increasing taxes and fees in an inefficient manner.

There are thousands and thousands of low income people living without taxpayer funded housing. Sure they share a room or live in a small apartment, but that is their lot in life if they choose to live here. There is no way we can afford to pay for half million dollar apartments to all these victims of public education, and driving down house prices takes money away from people and from taxes.

Housing prices are self correcting. Housing prices will drop as our government drives good jobs away, as they have been. The heavy, greedy, thoughtless hand of the government is the wrong solution. It's why we need more maids than engineers in the first place.

Jim Jones
Jim Jones subscriber

If San Diego is growing while affordable housing is so minimal, clearly we don't need affordable housing to grow San Diego. Increasing growth with taxpayer subsidized poor people only increases the problem.

The main problems keeping business away are taxes and red tape. Affordable housing programs increase both. They make it more expensive for a business to move here and more expensive for the high tech worker, who will not benefit from affordable housing since they make decent income, but will pay into it.

Affordable housing programs do not lower home prices, since the project housing displaces other housing, it already reduced the number of units available, while increasing taxes and fees in an inefficient manner.

There are thousands and thousands of low income people living without taxpayer funded housing. Sure they share a room or live in a small apartment, but that is their lot in life if they choose to live here. There is no way we can afford to pay for half million dollar apartments to all these victims of public education, and driving down house prices takes money away from people and from taxes.

Housing prices are self correcting. Housing prices will drop as our government drives good jobs away, as they have been. The heavy, greedy, thoughtless hand of the government is the wrong solution. It's why we need more maids than engineers in the first place.

Derek Hofmann
Derek Hofmann

Matt, more people doesn't have to mean more traffic. First, freeway traffic congestion is a result of pricing access to the freeway below the equilibrium rate determined by supply and demand. There's really no good reason to price it that way, it creates traffic congestion which harms us economically, it prevents people who are willing to pay for congestion-free commutes to help lower our taxes which would benefit us economically, and it's easy to fix.

And second, if we were to stop funding the freeways from sales taxes such as the TransNet half cent sales tax (a transfer of wealth from the poor to the rich) and if we were to require freeways to pay for themselves 100% from gas taxes and other user fees, all of a sudden there would be less traffic congestion.

Because traffic congestion is so easy to permanently eliminate, I wouldn't use its continued but obsolete existence to justify any argument against density.

Parking shortages are also caused by pricing parking below market equilibrium. Again, this is easy to fix. So there's really no good reason to continue forcing developers to overbuild their parking lots, and the loss of property rights doesn't justify zoning laws that artificially restrict density.

Yes, it's fair to ask whether we want more density. But let's stop using the government to prevent it.

Derek Hofmann
Derek Hofmann subscribermember

Matt, more people doesn't have to mean more traffic. First, freeway traffic congestion is a result of pricing access to the freeway below the equilibrium rate determined by supply and demand. There's really no good reason to price it that way, it creates traffic congestion which harms us economically, it prevents people who are willing to pay for congestion-free commutes to help lower our taxes which would benefit us economically, and it's easy to fix.

And second, if we were to stop funding the freeways from sales taxes such as the TransNet half cent sales tax (a transfer of wealth from the poor to the rich) and if we were to require freeways to pay for themselves 100% from gas taxes and other user fees, all of a sudden there would be less traffic congestion.

Because traffic congestion is so easy to permanently eliminate, I wouldn't use its continued but obsolete existence to justify any argument against density.

Parking shortages are also caused by pricing parking below market equilibrium. Again, this is easy to fix. So there's really no good reason to continue forcing developers to overbuild their parking lots, and the loss of property rights doesn't justify zoning laws that artificially restrict density.

Yes, it's fair to ask whether we want more density. But let's stop using the government to prevent it.

Derek Hofmann
Derek Hofmann

"The heavy, greedy, thoughtless hand of the government is the wrong solution."

And the right solution is to lift prohibitions against accessory dwelling units and micro-units and to eliminate zoning codes that require a surplus of parking.

Derek Hofmann
Derek Hofmann subscribermember

"The heavy, greedy, thoughtless hand of the government is the wrong solution."

And the right solution is to lift prohibitions against accessory dwelling units and micro-units and to eliminate zoning codes that require a surplus of parking.

Bill Bradshaw
Bill Bradshaw subscribermember

Mr. Hofmann, since traffic congestion is so easy to permanently eliminate through user fees, can you sight some examples of cities where this has actually taken place? I'd love to see the details.

Jim Jones
Jim Jones subscriber

I love your idea Derek, make road use taxes pay for freeways 100%, and also, to be fair, make buses and other forms of public transportation, as well as bike lanes and sidewalks, all user fee driven.

Jim Jones
Jim Jones

The right solution is to let market forces dictate what developers build. If a developer wants to build micro units, fine, if they want to build sprawling mansions for billionaires, fine.

If you want a micro unit without parking now, there are many individual rooms for rent.

Jim Jones
Jim Jones subscriber

The right solution is to let market forces dictate what developers build. If a developer wants to build micro units, fine, if they want to build sprawling mansions for billionaires, fine.

If you want a micro unit without parking now, there are many individual rooms for rent.