Rankings of the most expensive housing markets in America invariably include top-ten lists populated entirely by California cities. The crisis extends from north to south and hits every major city, including San Diego, where Betsy Morris is the CEO of the San Diego Housing Authority. In this TPR interview, Ms. Morris explains San Diego's strategies for providing more affordable housing and offers an analysis of November's state bond measure.
A $2.8 billion affordable housing bond will appear on the November ballot as part of a package of four infrastructure bonds. How might passage of this housing bond impact the San Diego Housing Authority's work?
With high housing development costs and intense housing needs, San Diego needs a reliable revenue source to help bring down the cost of housing for our workforce and for seniors who are displaced by high rents.
The federal government makes funds available to do that; local governments are creating housing trust funds and other financing mechanisms; and we need the state of California to be a partner as well. The state requires that each community set affordable housing goals and make a good faith effort toward achieving those goals. It is only fitting that the state resources also be available to help finance housing.
Will the bond contribute to meeting the housing needs of the city of San Diego?
The answer that will get people to vote for the measure is "of course." In truth, I wish rental housing had received a larger proportion, as it did in the 2002 state housing bond, whose funds are now running out. I think that the state housing agency and the local developers have a system going now-people know how to use the revenues that were made available by the 2002 voter approved housing bond and there are now projects lining up to use those monies. To date, the 2002 bond has helped finance 2,150 new apartments (plus a couple of new projects recently announced), assisted over 1,000 first-time homebuyers and partially underwrote the cost of programs for hundreds of homeless people in San Diego County. These programs work well to help real people.
Unfortunately this next round of funding will probably be the last because the 2002 bond money will be gone. The expertise is in place, the local political will is in place, all we need is voter approval of a new bond to help keep turning out more affordable housing all around the state.
What is not in this bond that was in the 2002 housing bond? What should be in the bond that is not?
I think that both bonds covered the range of housing activities. They support rental housing development, home ownership piece and financing to renovate older housing. In addition, there is money for emergency shelters, and transitional housing for people with special needs. I think it covers the continuum of housing activities and programs.
What is noteworthy in the new bond proposal is the companion funding for infrastructure. This is very important because it helps existing neighborhoods support infill development and rewards communities that accept more housing.
What do you make housing more affordable, especially in San Diego, which has famously high housing and land prices?
I think we can do a variety of things. It starts with having land zoned for multi-family housing in the right locations. We need development processes that allow those projects to expeditiously get from concept to building permit. And then, because we are not building inexpensive housing, we need the financing mechanisms to bring the cost down to be affordable-at rates that our target populations can afford. I think that inclusionary housing is a piece of the solution in that it harnesses private sector skills and resources to add to the housing inventory at all price points. And infrastructure standards, phasing and financing are part of the housing delivery model.
You note that the feds are providing money, the state has provided money, and the assumption is that locals will contribute to that. The city of L.A. and a number of other cities have begun mass housing trust funds. What is San Diego doing?
San Diego has had a housing trust fund since 1990, and it has generated about $70 million for affordable housing. Unlike Los Angeles, ours is a dedicated revenue source; it comes from a housing impact fee, paid by developers of new employment properties. As new industrial and commercial properties create new job opportunities, those new employees have an impact on the housing market. The housing impact fee captures that. It's assessed per square foot, depending on the type of use, and it goes into a fund that can only be used for affordable housing. As impressive as the L.A. housing trust fund is in its dollars, I believe that each funding source requires an annual appropriations vote by the city council. So, if priorities change in future years, those funds could go to something else.
Our affordable housing fund also benefits from in-lieu fees paid under the inclusionary housing program. In San Diego, these revenue sources are dedicated only to affordable housing; unfortunately it's not large enough to do the job. I think something of the scale that Los Angeles committed to is really impressive and raises the bar for all communities.
You addressed a UCSD class this month about the revitalization of San Diego's City Heights, once one of the city's oldest, most blighted neighborhoods. Its transformation, you noted, resulted from holistic master planning and smart, joint-use reinvestment. Why is the City Heights project, with its private-public partnerships, master planning, and joint-use facilities, so uncommon in California?
I think City Heights' success resulted in great measure from the guiding vision and financial support from Sol Price. He, along with William Smith, brought people together around a holistic planning vision and worked with the community to implement it. Credit also goes to the school district for embracing new concepts and to CityLink for bringing private development expertise. So today you've got one of the more multicultural communities that one could envision, with people working together to help realize the balance of this vision. I think that Mr. Price brought not just resources, but the patience to work through and nurture the community building process with residents.
You're now charged with chairing the joint powers authority in an adjacent community that models itself after City Heights. Is City Heights' success scalable and replicable?
I think it takes an investment of time to let the seeds germinate and put down their roots fully before expecting something to rise out of the ground. But yes, I do think that City Heights is replicable.
Then why don't we see more joint-use, neighborhood-centered, urban developments that leverage public investment and private philanthropic support?
It is difficult for governments, which are increasingly feeling the budget pinch, to have the luxury to see beyond their core missions and experiment with other modes of doing business. It takes additional time to explore new ways of doing business and to let the community process take its course; and to learn how partner governmental agencies approach issues, what their obstacles are, what their goals are. Those are the things that help entities to work together.
My hope from the JPA is that having taken the time to develop those relationships, the next coming together will be much easier and much smoother. The school district will know what the housing agency needs, housing will know what parks and rec needs, and we'll have those contacts and relationships and the trust already taken care of so that next time we come together we can be more efficient.
Now that there are model projects on the ground like City Heights, or NSBN's joint use projects in L.A., what can you say about what is lost when cities and planners don't have ‘healthy place-making' as their goal?
Lives and families and the futures of children are lost. This is not just about rebuilding. This has been about building an educational system, health care, and opportunities for families so that the next generation that grows up with these benefits won't be living in squalor.
Regarding collaboration, isn't it true that housing advocates too often say, "We don't have enough housing funds, so we're not interested in joint use;" school advocates say, "We don't have enough seats and funding, our focus must only be on education;" and park advocates say, "We don't have enough green space, we need to focus just on parks"? What can convince these interest groups to seek common ground and to plan and build integrated, holistic neighborhoods?
Hopefully it is the synergy that creates a better park and a better housing development and a better school when all the other components are located here as well. As the housing agency, we build places for families to live. If the kids that live in our developments can go to school in a well-designed school with a good educational program that is located right next door, if the computer center at the school is used by the kids after school, if the parents can have access to the child development facilities that come with the school, then we've done more than just housing: we've helped create a community.
In San Diego we've been exploring how to enhance our canyons and use them to form the identity of communities and the connections between neighborhoods. Part of the school development model that we are working on is how to bring the open space up out of the canyon into the housing design, how to bring the school into the canyon as a resource for the school kids in terms of nature education. All the components are related. It's thinking through the different aspects, finding the key players that can make each of these things happen, and focusing our efforts together. There is something rewarding about working together with other colleagues. We don't have to be working on our own focused project out in the wilderness.
A number of backlash legislative initiatives to limit eminent domain are politically advancing following the Supreme Court's 5-to-4 decision in Kelo. What do such efforts portend for the housing authority's work in San Diego?
To date we haven't used eminent domain powers to create housing development sites. But I think as we are increasingly looking to infill development, it will become an important tool. The challenge with infill development is the site assembly. I think that people who are entrusted with the power of eminent domain take that power very seriously and use it infrequently and judiciously. California has much greater safeguards than did Connecticut, whose case generated this fury.
I think it is useful to note that in California people whose property is purchased receive probably more than market value for their land. Some very significant developments that have been catalysts for major change in communities have used eminent domain judiciously to acquire the last key parcels to make the whole development work, and without that power, those developments would not have happened.
In the City Heights area, most land purchases were voluntary or negotiated sales. It's easy to envision instances where a few owners are unwilling, and that could keep the last pieces of the puzzle from falling into place. The court is there to make sure that people are getting fair value. Renters receive relocation assistance and businesses have good will compensation if they have to move. Again, almost every parcel that is acquired for these large developments is acquired on a voluntary basis, but sometimes there is one last hold out, without whom, the whole development can't happen. I think in those instances, it is an appropriate, if rarely used, option.
Population growth is putting intense pressure on Southern California communities. The state mandates a housing element from each jurisdiction and the allocation within a region of that housing plan. Talk about the political tensions involved in preparing the housing element in San Diego County.
Every city in San Diego County needs to take its fair share. San Diego is the biggest city; it is often looked to absorb these regional needs. Projections show that only 40 percent of the additional growth is going to be in the city of San Diego. Sixty percent is going to be in all other jurisdictions. They tend to be smaller jurisdictions. It's easier to come to the big gorilla and say "you do it all," but it is only going to work in this region if the smaller cities do their part and take their fair share.
That will expand housing opportunities for the residents of San Diego County. It will help people to find locations to live near where they work. When we look at the crowded freeways in San Diego it is clear to me that we don't have a transportation problem; we have a housing problem. People are on those freeways because they haven't found an appropriate place to live near where they work. No one wants to sit in traffic, no one wants to take two hours away from time they could be spending with their family. They do it because that is where their search for affordable housing has driven them.
When we talk about affordable housing we are not just talking about low wage earners. We're talking about teachers and paramedics-nurses in particular-that make the city work. There is a tremendous nursing shortage in San Diego County, and the biggest obstacle in this shortage is housing affordability. Many major employers say the biggest obstacle to recruiting and retaining employees is the cost of housing.
When their employees have to drive to the neighboring county in order to find affordable housing, it destabilizes the workforce for those employers. So the only way that San Diego can develop a strong economic base and a strong employee base for local businesses is for every jurisdiction to take up its fair share and to provide housing that is affordable to the workforce.
San Diego lost its planning director to the city of Los Angeles. Can you share any comments about the loss and any insights that L.A. should know about the planning director they gained in Gail Goldberg?
Gail is a personal loss because our working relationship was so strong. Housing is a planning issue, planning is about housing, so it is important that we work together. Gail understands that and works collaboratively with related interests and organizations. She brings not only a strong vision for planning, but the patience and value of working with the communities to help them achieve their own goals. I think it has been San Diego's loss and Los Angeles's gain. And I'll miss a good dinner partner.