Opening San Diego’s Door to
Lower Housing Costs
2015
California Association of Realtors
Government Affairs Directors Institute
Study prepared by
Fermanian Business & Economic Institute
Point Loma Nazarene University
Lynn Reaser, Ph.D.
The Fermanian Business & Economic Institute – business & economics in action
© FBEI 2014
Topics
Scope
Key Findings
Economic Impact
Policy Recommendations
The Fermanian Business & Economic Institute – business & economics in action
© FBEI 2014
Housing Production
233,000 San Diego Households
Priced Out of the Market
Percent
Affordability Index
Without Regulatory Costs
Gap
-40% -20%
0%
20%
40%
60%
80% 100%
Households Priced Out of San Diego Housing
Percent
30
25
20
15
10
5
0
Sales Throughout the County
Percent
Other Cities
9%
Santee
2%
Carlsbad
7%
Chula Vista
19%
San Marcos
10%
Unincorporated
3%
City of San
Diego
50%
The Fermanian Business & Economic Institute – business & economics in action
© FBEI 2014
Regulatory Costs
Entitlement
Mapping
Eliminated units
Fees
Affordable housing
Vertical costs
Time costs
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© FBEI 2014
Key Findings
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© FBEI 2014
Regulatory Costs Drive 40% of Average New Housing
Costs in San Diego County
Thousands of dollars
600
539.367
500
400
300
218
200
100
0
Average Price
Average Regulatory Cost*
*Weighted by total units rented or sold in 2013
The Fermanian Business & Economic Institute – business & economics in action
© FBEI 2014
Regulatory Costs Significant Share of
Housing Prices in all San Diego Jurisdictions*
Percent
0.47
San Diego
0.44
Carlsbad
0.37
Other Cities
0.32
Chula Vista
0.3
Unincorporated
0.28
San Marcos
0.22
Santee
0%
10%
20%
30%
40%
50%
*Weighted average based on total sales and rentals
The Fermanian Business & Economic Institute – business & economics in action
© FBEI 2014
Regulatory Gauntlet
Local Government Departments
Planning Department
Long Range/ Advanced Planning Department
Engineering Department
Land Development Department
Landscaping Department
Grading Department
Geology Review Department
Public Works Department
General Services Department
Stormwater Compliance Department
Fire Department
Parks & Recreation Department
Transportation / Traffic Department
Public Health Department
Utilities Department
Water Department
Library Department
School Impact Mitigation Department
Facilities Financing Department
Police Department Crime Prevention Review Department
Airport Land Use Staff / Commission
Environmental Department
MSCP Review Department
Economic Development/ Redevelopment Department
Subdivision/ Map Check Review Department
Franchise Utility Reviews (SDGE, Cox, Time Warner, SBC, etc.)
City Attorney
Building Inspection
Code Enforcement
Planning Commission
City Clerk
City Council
Hearing Officer Reviews
Design Review Boards
Housing Commission
Historical Commissions/ Review Boards
Community Planning Groups
Community Planning Group New Project Subcommittees
Community Sponsor Groups
State/Federal Agencies
Palomar Observatory
Department of Fish & Game
U.S. Fish & Wildlife
Army Corps of Engineers
San Diego Regional Water Quality Control Board
California State Coastal Commission
Bureau of Indian Affairs
FEMA
Bureau of Real Estate
US Department of Housing and Urban Development
California Environmental Protection Agency
Federal Aviation Administration/ Airports Department
MCAS Miramar
NGO’s
Endangered Habitats League
Coastkeeper
Sierra Club
Regional Distribution of Economic Benefits
from 3% Easing of Regulatory Impact
Increase
Percent
Gross Regional Product, $ mil
$3.15
1.7%
Personal Income, $ mil
$2.54
1.5%
37,331
1.9%
1,372
1.7%
18,222
0.6%
6,749
75%
Employment
Business Enterprises
Population
Housing Permits
The Fermanian Business & Economic Institute – business & economics in action
© FBEI 2014
Policy Recommendations
The Fermanian Business & Economic Institute – business & economics in action
© FBEI 2014
Policy Recommendations
Entitlements
Set benchmarks for project approval
times
Establish master plans
Prevent legal challenges after tentative
or final map
The Fermanian Business & Economic Institute – business & economics in action
© FBEI 2014
Policy Recommendations
Mapping
Replace deposit account with flat fee
Allow communication with
builder/developer
Grandfather all phases of project
Set “No Late Hits” policy
The Fermanian Business & Economic Institute – business & economics in action
© FBEI 2014
Policy Recommendations
Land Development and Building
Standardize building codes across
County
Establish “one-stop” shops for permits
Standardize Title 24 requirements
across building phases
The Fermanian Business & Economic Institute – business & economics in action
© FBEI 2014
Policy Recommendations
Affordable Housing
Implement sliding scale
Allow inclusionary and density bonus
units off-site
Contribute or sell city land
The Fermanian Business & Economic Institute – business & economics in action
© FBEI 2014
Climate for Change
Mayor Faulconer
Council
Speaker Atkins
California Treasurer, John Chiang
The Fermanian Business & Economic Institute – business & economics in action
© FBEI 2014
Other Findings
RIP Entry Level
Housing
Renters Pay Up As
Homeownership Drops
13 Cities Where Millennials
Can’t Afford A Home
High Housing Costs Driving
More Californians Into Poverty
Layers Of Government Regulation
Explain Area High Housing Costs
Regulations, Delays Add 40%
to Housing Costs, Study Finds
Economist Hits High
Cost of Permitting
Dan Walters: California has big
housing shortage
Harsh Reality for Young
Homebuyers
Borre Winckel
President & CEO
San Diego Building Industry Association
Housing You Matters Coalition
HousingYouMatters.org
Mission: Advocate for regulatory
reforms that result in the timely
production of a wide range of
attainable housing in all economic
sectors necessary to meet regional
needs
and
ensure
economic
prosperity.
QUESTIONS