Tuesday, June 10, 2008 | On Tuesday, the San Diego City Council, sitting as the Housing Authority, will once again consider the Housing Commission’s business plan and budget. Buried in these documents are two actions that seem to move the commission away from its primary mission of providing housing for San Diego’s neediest residents.

The first is that the commission plans to take advantage of the region’s overbuilt condo market and purchase units that could be converted to affordable housing. While that may sound like a good idea, the smart money says it isn’t.

First, the commission plans to purchase new units at $300,000 each. In order to afford those prices, rents will have to be affordable to those at the top end of their “low-income” clientele — those whose annual household income is $63,200 for a family of four. While these folks most likely need some help with the rent, there are 50,000 other households in San Diego who earn less than 50 percent of the area median income and are paying more than 50 percent of that just for housing. The wait list for Section 8 has 19,000 households on it. These are the people who should be first in line for Housing Commission assistance.

In addition to charging what are close to market rate rents on these new units, the commission will also have to raise rents on their old public housing units to market rate in order to finance the new units. They are converting what were once the most affordable housing units in the city to homes with rents higher than their primary customers can afford.

Unfortunately, the commission staff has not done the financial analysis to understand what their current assets are really worth, what debt they can support and what it will take to support the new $300,000 apartments they plan to buy. They say they’ll do the analysis later — and if that results in market rate rents that most of their clients can’t afford, so be it. However, they promise to keep the rents as low as possible. That is hard to do after the debt has been incurred.

Second, the commission has ruled out providing the new 350 affordable housing units in the ways it traditionally has done so. That is, leverage local dollars with tax credits, state housing programs, and other resources. To do this, the commission would have to enter into agreements with local affordable housing developers to build and own the rentals. Such a strategy would provide more affordable homes at much lower rents.

And that’s what this is all about. The Housing Commission’s mission is to provide the most affordable housing it can, at the lowest cost and offer the new homes at the lowest possible rents. Changing their mission by burying this new scheme in a business plan is not the way to make such a fundamental change, particularly before there’s a new CEO and without the benefit of public discussion.

Tom Scott is the executive director of the San Diego Housing Federation.

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