The Morning Report
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A former Residence Inn in Mission Valley / Photo by Adriana Heldiz

Early in the pandemic, as the tourism industry was collapsing, San Diego officials saw a golden opportunity to buy up hotels and convert the properties into housing for the homeless. Long-term, the move was supposed to boost the region’s low-income housing supply for cheaper than it would cost to build the units from scratch. 

From the outside, it sounded like a win-win. But the price that the San Diego Housing Commission ultimately paid for one of those hotels in Mission Valley is the subject of ongoing scrutiny. 

Andrew Keatts reports that the commission in mid-2020 relied on an appraisal based on the value of the hotel about a month before California’s stay-at-home orders went into place and the pandemic massively disrupted the market for hotel buildings. The money came from a variety of sources, including the state and federal governments and a loan. 

Keatts spoke to a hotel acquisition professional who said the property was likely worth about $20 million less by the time the commission struck a deal. A spokesman for the commission declined to say — for now — why it appraised the property the way it did. 

The acquisition is also complicated because the commission’s broker bought 50,000 shares of stock in the company that owned the hotel after he agreed to take the job. The commission’s lawyer has referred the matter to criminal investigators. 

Newsom Asks Businesses and Residents to Cut Back on Water

Gov. Gavin Newsom asked California businesses and residents to reduce their water usage by 15 percent Thursday as the state weathers another drought.

The voluntary request “demonstrates the growing challenges of a drought that will only worsen throughout the summer and fall and is tied to recent heat waves,” reports the Associated Press.

San Diego is one of eight California counties not included on an emergency drought proclamation published by the state that would make counties eligible for state actions that would mitigate the effects of drought conditions.

As VOSD reporter MacKenzie Elmer reported last week, while more than a third of the state is experiencing an “exceptional drought,” San Diego is relatively drought-proof. That’s because officials here have spent a lot of money on deals to secure more supplies and water infrastructure. It’s also why we pay some of the highest water rates in the country.

Study Suggests Pessimism Over California’s Future Is Based on Housing

A new University of California survey has found, in the words of City News Service, “no evidence of an abnormal increase in residents planning to move out of the state.” The researchers spoke to thousands of voters and concluded that the number of people who don’t see a future in the Golden State has decreased slightly since 2019. 

The numbers are, in any case, not insignificant: 23 percent of Californians and 17 percent of San Diegans say they’re thinking about leaving. Political affiliation, ethnicity and income appeared to influence the way people responded. 

A UCSD professor who co-wrote the study told the Union-Tribune that while the rich are doing fine and low-income residents “are still aspiring … the real pessimism about California comes from people in the middle-income groups” who feel squeezed by the housing shortage. 

In Other News

The Morning Report was written by Megan Wood and Jesse Marx.

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