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San Diego Region Looks to Government-Owned Land for Subsidized Housing

Officials Aim To Boost Development of 10,000 Units To Meet Mandate for 172,000 Locally, 2.5 Million Statewide

City and county officials in San Diego have committed to developing 10,000 mostly subsidized apartments on government-owned land as California looks to alleviate a serious housing shortage. (Getty Images)

By Lou Hirsh CoStar News October 6, 2022 | 12:30 P.M.

San Diego city and county officials this week committed to develop 10,000 housing units over the next decade, primarily low-income subsidized apartments on government-owned properties, as California looks for the region to add more than 170,000 units to alleviate a serious statewide housing shortage.

In a March report, the California Department of Housing and Community Development said the state must zone for at least 2.5 million new homes by 2030, after decades of underdevelopment, soaring prices and rising homelessness.

San Diego, the nation’s eighth most populous city in the fifth most populous county, has been called on by the state to deliver at least 172,000 of those units. To do so, officials said the region would need to boost annual development to around 12,000 units per year, after just over 3,000 units were completed in 2021.

“The housing challenge we face is bigger than any one jurisdiction can solve alone,” San Diego County Supervisor Terra Lawson-Remer said Monday during the first joint meeting of supervisors with San Diego City Council in more than 20 years.

San Diego government leaders are looking to meet a large chunk of the state-imposed development requirement by boosting development on government-owned properties. Examples include plans in the works by developer Zephyr Partners to build more than 4,200 units as part of a larger redevelopment of the city-owned San Diego Sports Arena.

According to the nonprofit San Diego Foundation, which funds housing and other community programs, there are more than 500 government-owned properties totaling 2,400 acres in the region that could be used for housing development.

Like other California cities, San Diego has passed several measures over the past few years designed to boost the production of affordable housing, with slow or mixed results. Those include easing restrictions on accessory dwelling units built on existing residential properties and approving incentives for developers to build near public transit hubs by loosening parking, density, height and other regulations to encourage higher-density development.

The San Diego Housing Commission, which oversees affordable housing projects for the city, told officials this week the agency is considering policy changes that could clear the way for more mid-rise and high-rise apartment projects on 175 properties owned by the commission.

California housing development has been slowed over the decades by factors including high land and construction costs and some of the nation’s strictest environmental and development regulations.

Just 16% of California households could afford to purchase a median-priced home in the second quarter, down from 23% in the same quarter of 2021, according to an August report from the California Association of Realtors trade group. CoStar Market Analytics data as of Oct. 5 shows average apartment rents in the San Diego region have increased 7.6% in the past year, among the state’s highest growth rates along with Santa Barbara’s 8.1%, Visalia’s 7.9%, San Luis Obispo’s 7.4% and Bakersfield’s 7.3%.

The Sept. 30 expiration of a California moratorium on certain rental evictions, enacted at the start of the pandemic, has spurred concerns among housing advocates about a worsening affordability climate for apartments amid lingering inflation.

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