San Diego’s Housing Affordability Crisis
Almost every day I see an article bringing up the high cost of housing in San Diego; some blame developers only targeting luxury markets, others attack the affluent demographics who have multiple homes or second homes, many blame greedy landlords. It seems like everyone is pointing a finger trying to blame someone, but no one wants to look at the simple reality of the situation.
The reality of this situation is really quite simple. All the above mentioned “causes” have very little blame in what is actually causing high prices. The problem is simply and truthfully as basic as supply and demand. Yup, that is it. The reality is San Diego is America’s Finest City, a city people from all over the world visit and hope to live someday. We have a huge influx of people every year, and we don’t have enough homes. It is quite easy to blame neighborhood associations that don’t want to allow higher density housing at the expense of the character of the individual area, or landlords who keep raising the rents, but it doesn’t need to be made this complex.
If you have seen a rental come to the market, it is likely you have seen the line of 20 or 30 people rushing to try to secure it for their family. All doing anything they can to get the edge, this will always push prices up. If landlords had to fight to get good tenants and people had a ton of choice rents would drop dramatically. As long as we have such a shortage of housing the cost will always go up. The sad reality is the “cost of entry” will keep getting higher as well. As long as there are too few homes, and an area people will fight to put down roots in, the person willing and able to pay the most is the one who will secure the space.
Additionally, San Diego has so much regulation around building that developers are unable to create the housing that is actually needed. The regulation and restrictions around a middle income home development is so costly most developers won’t touch it, not because they don’t want to, but because they simply can’t. Infrastructure that property taxes and the city traditionally paid for such as schools, roads, parks are all now being passed on to the developer. On top of that, San Diego has made wonderful progress with “green” technology, however all of those costs are also being passed onto the developer. It has come to a point where the cost of building a home to meet all the demands of the city has become unaffordable to the builders.
At the end of the day San Diego needs more homes. There are many debates as to how we do this and what will make the most impact, regardless of how you think it should be done, it is what needs to be done. For better or worse we are a growing city, nothing is going to stop the growth, the best thing we can do is find a balance to keep what makes us the best place to live and embrace the changes that will happen. We can either be part of the change and make our own unique mark or be bulldozed when the change is forced on us.
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