2015California Association of Realtors
Government Affairs Directors Institute
Study prepared by
Fermanian Business & Economic InstitutePoint Loma Nazarene University
Lynn Reaser, Ph.D.
The Fermanian Business & Economic Institute – business & economics in action © FBEI 2014
Opening San Diego’s Door to Lower Housing
Costs
The Fermanian Business & Economic Institute – business & economics in action © FBEI 2014
Topics
Scope
Key Findings
Economic Impact
Policy Recommendations
233,000 San Diego Households Priced Out of the Market
Percent
Gap
Without Regulatory Costs
Affordability Index
-40% -20% 0% 20% 40% 60% 80% 100%
Households Priced Out of San Diego Housing
Percent
Carlsb
ad
City o
f San
Dieg
o
Oth
er C
ities
Chula
Vista
San M
arco
s
Uninco
rpor
ated
Sante
e
Total
Count
y0
5
10
15
20
25
30
Sales Throughout the CountyPercent
Carlsbad7%
Chula Vista20%
City of San Diego50%
Unincorporated3%
San Marcos10%
Santee2%
Other Cities9%
The Fermanian Business & Economic Institute – business & economics in action © FBEI 2014
The Fermanian Business & Economic Institute – business & economics in action © FBEI 2014
Regulatory Costs
Entitlement
Mapping
Eliminated units
Fees
Affordable housing
Vertical costs
Time costs
The Fermanian Business & Economic Institute – business & economics in action © FBEI 2014
Key Findings
Regulatory Costs Drive 40% of Average New Housing Costs in San Diego County
Thousands of dollars
Average Price Average Regulatory Cost*0
100
200
300
400
500
600539.367
218
*Weighted by total units rented or sold in 2013The Fermanian Business & Economic Institute – business & economics in action © FBEI 2014
Regulatory Costs Significant Share of Housing Prices in all San Diego
Jurisdictions*Percent
Santee
San Marcos
Unincorporated
Chula Vista
Other Cities
Carlsbad
San Diego
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
0.22
0.28
0.3
0.32
0.37
0.44
0.47
*Weighted average based on total sales and rentals
The Fermanian Business & Economic Institute – business & economics in action © FBEI 2014
Regulatory GauntletLocal Government DepartmentsPlanning DepartmentLong Range/ Advanced Planning DepartmentEngineering DepartmentLand Development DepartmentLandscaping DepartmentGrading DepartmentGeology Review DepartmentPublic Works DepartmentGeneral Services DepartmentStormwater Compliance DepartmentFire DepartmentParks & Recreation DepartmentTransportation / Traffic DepartmentPublic Health DepartmentUtilities DepartmentWater DepartmentLibrary DepartmentSchool Impact Mitigation DepartmentFacilities Financing DepartmentPolice Department Crime Prevention Review DepartmentAirport Land Use Staff / CommissionEnvironmental DepartmentMSCP Review DepartmentEconomic Development/ Redevelopment DepartmentSubdivision/ Map Check Review DepartmentFranchise Utility Reviews (SDGE, Cox, Time Warner, SBC, etc.)City AttorneyBuilding InspectionCode Enforcement
Planning CommissionCity ClerkCity CouncilHearing Officer ReviewsDesign Review BoardsHousing CommissionHistorical Commissions/ Review BoardsCommunity Planning GroupsCommunity Planning Group New Project SubcommitteesCommunity Sponsor Groups State/Federal AgenciesPalomar ObservatoryDepartment of Fish & GameU.S. Fish & WildlifeArmy Corps of EngineersSan Diego Regional Water Quality Control BoardCalifornia State Coastal CommissionBureau of Indian AffairsFEMABureau of Real EstateUS Department of Housing and Urban DevelopmentCalifornia Environmental Protection AgencyFederal Aviation Administration/ Airports Department MCAS Miramar
NGO’s Endangered Habitats LeagueCoastkeeperSierra 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%
Employment 37,331 1.9%
Business Enterprises 1,372 1.7%
Population 18,222 0.6%
Housing Permits 6,749 75%
The Fermanian Business & Economic Institute – business & economics in action © FBEI 2014
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
Other Findings
New Home Building contributes $36.8 Billion and 209,000 jobs per year to the California Economy
Community resistance, environmental policies, local governments constrains new housing construction
3.2 million CA families (31%) struggle every month to meet basic needs.
Regulations, Delays Add 40% to Housing Costs, Study Finds
RIP Entry Level Housing
Economist Hits High Cost of Permitting
Harsh Reality for Young Homebuyers
Renters Pay Up As Homeownership Drops
Layers Of Government RegulationExplain Area High Housing Costs13 Cities Where Millennials
Can’t Afford A Home
High Housing Costs Driving More Californians Into Poverty
Borre Winckel President & CEO San Diego Building Industry Association
Dan Walters: California has big housing shortage
Housing You Matters Coalition
HousingYouMatters.orgMission: 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.