Issues: Affordable Housing

Are politicians insane?

By Fred Schnaubelt, The Daily Transcript
Tuesday, May 2, 2006

Albert Einstein defined insanity as "doing the same thing over and over again and expecting different results." Well, the San Diego City Council is doing the same thing over and over again, adding more and more to the cost of housing and expecting prices not to go up. This comes from eight council members who, to the best of our knowledge, have never built anything of value for anyone.

According to Einstein's definition, the City Council is insane! You'd think eventually they'd realize there's a cause and effect, and it's preferable to let a million people in the marketplace make their own economic decisions and stop messing up the housing market.

The San Diego Planning Commission is also committed to increasing the cost of housing and reinforces the council's insanity. "Affordable new housing" has been outlawed by the City Council and planning commission. If you don't think so, just watch on television how the planning commission increases the cost of projects or reduces the number of units, which is the same thing, and disallows hundreds of new homes every year.

This brings us to the planning department, which makes housing more expensive by penalizing homebuilders with ever increasing demands and delays. A $150 million land acquisition and development loan can cost a million dollars more in interest for every month a project's delayed. Previous city councils, with the advice and consent of the planning department, downzoned thousands of acres of affordable multifamily-zoned neighborhoods such as North Park, Normal Heights and Pacific Beach, under the guise of "planned growth." A confused council is now upzoning these same areas under the guise of "smart growth." Developers do everything in their power to bring down the cost of housing, while government does everything it can to make it more expensive. The city's housing commission builds apartments that cost twice what privately developed apartments cost, without so much as a murmur from the media.

It's virtually impossible for a huge bureaucracy to reform itself. An internal culture develops and staff honestly believes it can plan for over a million residents, intoxicated with the idea they're capable of planning an entire city. Bureaucrats have a compelling interest in maintaining and protecting rules with which they themselves identify, and upon which promotions and salary increases are based. To understand the impossibility of changing, just look at the inability of the former city attorney, heads of the zoning department and building inspection department to obtain permits for their own properties in a reasonable time. Current and former employees report the rigor mortis is so endemic the planning department is unfixable. If insiders can't get timely approvals, what chance do outsiders have?

Absent a Supreme Court ruling overturning anti-affordable housing regulations, brand new housing will never be attainable by median income families. Zoning, while initially well-intentioned, has outlived its usefulness and serves primarily to prevent diversity, prevent density and prevent innovation while accelerating the onset of blight in older neighborhoods.

What about the Centre City Development Corp.? The fascinating thing about redevelopment agencies is their development projects would be illegal under previous zoning and land-use regulations, and illegal if undertaken by previous property owners. What distinguishes redevelopment agencies from planning departments, however, is they're pro-growth, they encourage innovation and their survival depends upon bringing new developments to fruition. This is in contrast to planning departments, which are anti-growth, anti-development and anti-housing. Redevelopment agencies cut red tape and expedite the issuance of major land-use permits, cutting years off the process. Yes, years!

If we seriously want to reduce the cost of housing, CCDC should be authorized to assume all planning department responsibilities for the entire city, or simply abolish the planning department altogether. In the former Soviet Union, with the most comprehensive planning department in the world, they had a saying, "You can have planning or you can have housing -- but you cannot have both."

While "new" housing is not widely affordable in San Diego today due to the dead hand of government, there are no legitimate reasons why affordable housing should be brand new. None! Inclusionary new housing, it is self-evident, increases the cost of all new housing. According to the U.S. Census in 2004, affordable used housing does exist. Fifty percent of homeowners in the county pay less than $1,561 per month (including taxes and insurance). And contrary to what the City Council believes, 50 percent of renters pay less than $979 per month, 128,000 renters pay less than $799 and 27,000 pay less than $499 (including utilities).

Affordable housing is used housing (often through doubling up), much like affordable cars are used cars -- a concept that keeps eluding the City Council. It shouldn't be that difficult to understand -- the more new housing that's approved, the more homes and apartments to divide amongst all income levels. A University of Michigan survey, "New Homes and Poor People," determined that for every 1,000 new homes constructed, 3,545 moves take place in a chain of moves, including 1,290 moves by households deemed low and moderate income. Today, people are clamoring for condo conversions as evidenced by the 10,000 units reportedly awaiting approval. This council is trying to either prevent affordable housing or add to the price through a power never envisioned under the City Charter. Incredible! Our City Council is insane!

Schnaubelt, president of Citizens for Private Property Rights, has been a commercial real estate broker for 35 years and was a San Diego City Councilman from 1977-81. Send comments to editor@sddt.com. All letters are forwarded to the author and may be published as Letters to the Editor.

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