Waring Down a Maddening System

Thursday, January 11, 2007 | Jim Waring is one of the most interesting people at City Hall.

Waring is Mayor Jerry Sanders’ land-use czar. For whatever reason, Waring has turned into a very visible and important guy. He’s articulate and blunt. He’s a Democrat working for a Republican mayor.

I wish I had a big development project to take to Waring, not only because that would mean I was rich, but also because he seems like a fair and reasonable guy with whom to deal on something like that.

My latest chat with Waring came Tuesday.

The mayor’s State of the City speech is tonight. I took a minute to read Sanders’ speech from last year to see if I might pull out some gems.

In that speech, he invited us, after all, to hold him accountable.

I found a point Sanders made that night last year that offers up a good opportunity to do so.

“Regulatory inefficiency is the most immediate and correctable roadblock to solving the housing crisis. I will set into motion the reform of the regulatory process so that we can reduce housing costs and expedite the building of new housing units,” the mayor said last year.

And there was more.

“I will set a goal of reducing the permit processing period,” the mayor said.

He has not succeeded yet. Waring said so. It is his No. 1 priority now for the coming year. But it hadn’t been accomplished yet by any measure.

First of all, I’ve written before that I don’t agree with Sanders and the others who believe that city government could have much impact on housing prices. They hold that housing became unaffordable because City Hall took so long to approve projects — that the city’s regulations put a damper on housing development, which caused supply to get low and allowed demand to drive up prices.

That’s just too convenient of a myth for developers, who are always, understandably, looking to limit the amount of red tape they have to go through to get their projects done.

What better way to do so than to complain that the city’s outrageous housing prices are a result of all this red tape?

No, I think the true history is a bit different. Here’s a short version of what really happened: A slightly undervalued housing market and falling interest rates allowed dorks, not much different than me, to start investing in real estate locally. They started making money, which drove many others to start investing — collecting and flipping homes like day traders.

It turned into a full-fledged mania fueled further by even lower interest rates and the advent of interest-only and other exotic loans. People with incomes that would have never qualified them for $500,000 homes in the past found themselves buying $600,000 homes.

Now, we are so high, we can see over the clouds, we look around and can’t believe how much homes cost. And if the flow of money stops — if banks stop doing crazy loans and interest rates go up even a little — we may yet hope for a more affordable market.

But I digress. That doesn’t mean I don’t think the city needs reform in this area. The process of permitting projects has gone from being a months-long slog to a years-long odyssey. Developers who make it through three-quarters of the process and learn that they’ve come up short on one of the requirements find themselves forced to start all the way back at the beginning.

Other times, a developer will enter into an agreement to buy a property on which he or she wants to build a 12-story building. Later, the city will inform the developer that although the zoning allows for a building between four and 12 stories, local community groups and their government representatives will only allow a four-story building to proceed.

That’s just not the way things should get done. The developer should know what is or isn’t allowed on a piece of property — there’s no reason those arguments can’t all be had before projects go forward. And if the project makes it through most of the hard slog, it shouldn’t have to go all the way back to the beginning of the process if it encounters a problem.

It has gotten to the point that there is now an unverified (by me) myth floating around town that some developers have ironically come to appreciate the length of time it takes to get projects through City Hall. Some, the story goes, spent long enough waiting for approval that during their wait, they ascertained that the market was slowing and it may be better to drop the project before they broke ground. Had the city been more efficient, the story goes, they would quickly built projects that lost money.

I asked Matt Adams, the government affairs director for the Building Industry Association of San Diego, whether this was happening.

He laughed and said he had heard of that.

“Money can buy you everything except timing, I suppose,” Adams said. So was this intractable bureaucracy actually something to be praised in light of it saving some developers from making bad decisions?

He said, of course, no.

“If you had more consistency and efficiency in the city’s building approval process, you wouldn’t have such a volatile market and you would get away from the wild swings where housing costs rise up so high and come down. That’s not healthy or good for the community,” Adams said.

So back to the mayor. How was he doing on his promise to accomplish this?

“It doesn’t happen overnight and we recognize that,” Adams said.

When I talked to him, Waring was his characteristic straight-talking self. He had just gotten out of a public hearing on the Navy Broadway Complex. He said he had listened to people talk about how bad of a person he was for some time.

“I still haven’t gotten used to that,” he said.

Waring said he had great hopes for the New Year. By summer, he planned to have the city’s general plan done. That would make it easier for three or four community plans to be completed. Those are the documents that should spell out, clearly, what developers can and can’t do with the properties they either own or want to buy. Just knowing what you can do with these properties should make things a lot simpler, Waring said.

“We want to increase predictability,” Waring said. “If we’re able to achieve that, it would shorten the time dramatically from the moment you decide you want to build to the time you actually can.”

Right now, Waring said, only the richest developers with the best lawyers and lobbyists have the ability to get their projects through City Hall the way they wanted them. If both a wealthy, powerful developer and an entrepreneur owned land zoned for a four- to 12-story building, the wealthy one might be able to successfully lobby the city to approve the 12-story, more lucrative, deal. But without the fancy entourage, the entrepreneur might only come through with a four-story project.

It shouldn’t matter who you can hire to help you lobby the city, Waring said. It should only matter what the community has clearly declared that it wants to allow built on a parcel of land.

And he’s made it his goal to get the community to do that in the next year.

I can’t help but wish him well.

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