San Diego 101: Why Is It so Hard to Build Housing?

As Californians, we live the housing crisis every day. It’s the force that empties our bank accounts at the end of the month, dominates our news headlines and populates our local sidewalks with tents.

We call it a “crisis,” but it hardly snuck up on us. This shortage has been in the making for decades.

Many factors play into our current housing shortage: population dynamics, restrictive zoning laws, anti-housing sentiment, complicated regulations, rising costs and economic uncertainty, to name a few.

In Whose Backyard? This is part of a Public Matters series unpacking the housing crisis in San Diego County. You can check out the rest of our coverage here.

Locally, we have a record of being slow to adapt to these kinds of changes. The tension between the city’s desire to build wealth and its resistance to housing is as baked into San Diego’s psyche as the sun damage on our skin.

The only way out of this situation is to build many, many new homes – a goal that the San Diego region is far from keeping up with. Reaching that objective will require us to understand how all of these factors are getting in the way of that goal, and what we can do to change them.

Spatial Considerations

San Diego – contrary to landlocked cities like Phoenix – cannot simply sprawl our way out of the housing crisis. This is partly because of our unique geographic circumstances: Mexico to the South, the Pacific Ocean to the West and Camp Pendleton to the North. Not to mention, sprawl can have severe climate implications because it fuels car dependence and puts residents in the line of fire threats (and beyond the bounds of many home insurance policies).

This means a substantial amount of housing will need to be built in existing neighborhoods, but this is difficult for many reasons.

Zoning laws determine what can be built where, and San Diego’s have barely changed since the first ordinance was passed in 1923. This makes it difficult to build any housing types other than single-family homes which take up more space, and we don’t have a lot of space to work with. Meanwhile, only 13 percent of residential areas in San Diego allow multi-family housing like apartments.

Efforts to change local zoning laws in recent years have largely fallen flat due to anti-housing resistance, largely from homeowners who are commonly referred to as NIMBYs (which stands for “not in my backyard,” suggesting that housing should be built elsewhere). Those who organize against new development often cite concerns about increased congestion, changes to neighborhood character and impacts on local property values.

Financial Considerations

High housing costs for buyers and renters are reflective of a larger truth, which is that housing is getting more expensive to build.

Years of inflation and supply-chain issues have caused construction costs to balloon. Labor shortages make it difficult to get things built, as do high interest rates. Local and federal budget cuts have taken a major toll on government subsidies. All of these factors contribute to a situation where building homes is mostly inaccessible to anybody other than large, corporate developers.

Policy Considerations

Lastly, developers and housing advocates have long lamented the cooling effect of excessive regulations on getting stuff built, while housing skeptics fear any amount of deregulation will undermine the future of our neighborhoods.

The YIMBYs (“yes in my backyard,” opposite of NIMBYs) recently won a years-long battle to overhaul the California Environmental Quality Act, commonly known as CEQA, which stunted housing production across the state for years by opening projects up to lawsuits, which were often frivolous in nature. New reforms are expected to majorly ease development, but it remains to be seen how big of a difference this will make.

Other regulations such as parking minimums and a requirement to include two staircases in many new buildings also contribute heavily to the housing landscape as we know it, fueling higher costs, longer development times and homogenous design approaches for new developments.

How Do We Fix It?

At the core of the housing crisis is a basic economic concept: supply and demand. We have more people and jobs in San Diego County than we have homes to accommodate them, and prices will continue to rise until this scarcity issue is addressed.

Policy solutions such as reforming or removing housing regulations and changing the zoning code will naturally pave the way for more development – therefore reducing costs. Local data bears out the fact that areas where more new homes are built experience the lowest relative rent increases.

Efforts to keep people in their current homes can also go a long way to preventing the other end of the housing crisis: homelessness. This could include financial assistance for renters in need and stronger tenant protections that make it harder to evict people.