The San Diego City Council on Monday adopted new rules governing the sale of affordable housing developments.
The regulations are aimed at preserving properties with deed restrictions that limit rents to affordable levels. When owners wish to sell such properties, they'll have to offer first right of refusal to a list of qualified buyers who build and maintain affordable housing.
A study from the San Diego Housing Commission in 2020 found 4,200 affordable housing properties with deed restrictions that were set to expire by 2040. After deed restrictions expire, property owners can raise rents to the market rate, which is often unaffordable for low- or moderate-income renters.
Councilmember Kent Lee said San Diego is losing hundreds of affordable housing units each year, and new construction can't keep up.
"I think it's fair to compare the challenge that we have to having a hole in San Diego's affordable housing bucket, where no matter how much we keep pouring in through new affordable deed restricted units, we're simultaneously losing existing affordable homes," Lee said.
Proponents said the ordinance closes a loophole in state law, which already mandates certain notifications to the affordable housing industry as deed restrictions near their expiration date. The local ordinance goes further by requiring those notifications as soon as the property owner intends to sell, even if there are decades left on the deed restriction.
Supporters also acknowledged the ordinance's limitations. While it does offer affordable housing developers some advantage, those developers often lack the funding needed to compete in the free market of real estate.
"This policy is good, I'm really happy it's in front of us," said Councilmember Sean Elo-Rivera. "But what's really needed to make sure that we build upon it is ensuring that there is funding there to act on the opportunities that will be presented to the Housing Commission and to the public as a result of this policy."
