Emails Reveal More About City’s Ash Street Lease Deal

Speaker 1: 00:00 It's two weeks to the day before the November election and midday edition continues. It's voter cram session. Series of reports measure a on San Diego's ballot would raise $900 million for affordable housing proponents Sayers. The city's best shot at making a serious dent in the homelessness and housing affordability crisis. Detractors say it's increased to property. Taxes comes at the worst possible time. KPBS Metro reporter, Andrew Bowen takes a closer look Speaker 2: 00:32 At the corner of Twain and Fairmount avenues in grant fails. It's 79 apartments housing, the formerly homeless, the complex called Stella opened in December of last year. Residents paid deeply subsidized rents and have onsite services to help them live healthier lives. Steven Russell, president and CEO of the San Diego housing Federation says San Diego needs more of this a lot more. We have been absolutely heartbroken over this fate of folks who are living in the streets of San Diego. We've seen what, what a terrible cost it is to them, to their health, to our common health, to the quality of our neighborhoods. We believe that we have an opportunity now to resolve that Russell says the $900 million in bonds that measure a would raise, could fund construction of 7,500 affordable homes for the chronically homeless and those at risk of becoming homeless. We want to create a safety net for seniors, veterans, people living with disabilities and youth who are transitioning out of foster care. Speaker 2: 01:30 So they would not be at risk of homelessness. They're disproportionately homeless in terms of the populations as a whole Russell adds that the local money could be matched three to four times over with state and federal subsidies, which could work as a local stimulus program. As the region recovers from the pandemic. We believe that as a property tax it's spread so thin over so many people that is very it's relatively modest, and that it really provides an opportunity for us to create a safety net that is so clearly lacking. As we saw during this pandemic measure, a would be paid back with an increase to property taxes starting next year, and how much you pay depends on the assessed value of your home for every $100,000. You'd pay about $3 extra in the first year. So say the County assesses your home's value at $600,000 in year one, you'd pay about an extra $1 and 50 cents per month that would gradually increase to about 10 50 per month. Speaker 2: 02:24 By the end of the decade, if you're a renter, some of those costs may be passed on to you. You keep giving the bureaucracy more money to spend. They're never going to have any incentive to implement those reforms and regulations. City council members, Scott Sherman is voting no on measure a he points out that with interest, the measure would constitute $0.1 billion over 46 years. He says that building affordable housing is too expensive and that the government should focus on lowering the cost of construction before raising taxes. Politicians told you, Oh, it's just a small little bit of tax. It won't to much. Speaker 3: 03:00 It's not that much out of your budget. Well, if you keep doing that time and time again, it finally adds up to where now it's almost half the cost of building housing in this city. Speaker 4: 03:08 Sherman is referring to a 2015 study from point Loma Nazarene university that found regulations account for up to 47% of the cost of housing in San Diego with subsidized affordable housing, Sherman says the state should end the requirement to pay construction workers, higher wages called prevailing wage, which Speaker 3: 03:28 By everybody's account ups, the cost of those units by 20 to 25%, I'd much rather get that done without prevailing wage. Save that 20% and build more units with that money Speaker 4: 03:39 Measure a has been endorsed by the County democratic party, affordable housing builders and organizations that serve the homeless. It also wants support from the San Diego County taxpayers association, the associated general contractors, San Diego, and the building industry association of San Diego County. It's opposed by the County Republican party, the San Diego union Tribune, editorial board, three city council members and conservative radio host. Carl DeMaio measure a needs a two thirds majority from city voters to pass. Johnny May is KPBS Metro reporter Andrew Bowen, Andrew. Welcome. Hi, thanks Maureen. That two thirds requirement for approval is quite a hurdle to overcome. How are advocates campaigning for this measure? I think it's a fairly conventional campaign. They're certainly trying to get as much press coverage as possible. They've got a social media presence. I actually got a text message from a volunteer. Uh, you know, it's telling me to vote yes, for measure AA the other day. Speaker 4: 04:40 Um, the challenge with every ballot measure really, but especially one that involves a tax increase is just breaking through the noise. There are a lot of issues and races on the ballot, uh, and it takes money to get your message out there. The measure a campaign has some money, but it's not a wash in it. And if you think back to the March primary, when measure C was on the ballot, this was the hotel tax increase that would have funded the convention center expansion, uh, also affordable housing and infrastructure. Uh, that measure had a boatload of money. They have the support from the chamber of commerce and the San Diego and Imperial counties, labor council, um, to, you know, two of the, probably the biggest interest groups in San Diego. And, uh, that measure couldn't even get to a two thirds majority. So of course this is a different election. Speaker 4: 05:28 It's a different ballot measure, but it, you know, the fact remains that this hurdle is very, very high. How do supporters of measure a answer the criticism that this is a particularly bad time to ask for a tax increase? Well, as you heard in that, uh, story that I did, um, they say that the T they think the tax increase is relatively modest because it's spread out over a very large number of people. I'm the owner. As I said, the owner of a median priced home would pay roughly dollar and 50 cents extra per month in the first year. And, uh, you know, the people who are struggling the most in the pandemic probably don't own homes that are taxed at $600,000. So the tax burden on them, you know, assuming their homes are more modest, um, would be lighter. It's also phased in over time. Speaker 4: 06:17 So, you know, by the second, third, fourth year, when the taxes are going in, uh, you know, coming up a little bit, um, hopefully by then the economy will have recovered. Um, and they, the other argument they say is they think this is actually the right time to be, um, passing a measure like this because the pandemic has made clear that we have a need for a greater social safety net, not only for the homeless who, uh, you know, don't have a home to stay in. Um, but also for those low income households that are now at risk of eviction, because they can't afford the rent. And if they're given a home with a rent that they can afford, then they're more likely to be able to stay in that home, even if they suffer a, a serious, um, you know, financial calamity, like a job loss. Speaker 1: 07:01 And tell us more about what supporters say this measure could do to act as an economic stimulus for the region. Speaker 4: 07:08 Well, typically when you build affordable housing, the builder gets funding from multiple sources. So they are competing for limited state and federal tax credits and grants, things like that. And if they have money from the local government, then they're more likely to win those that competition and bring in that state and federal money right now. Other counties and regions in California have passed a very similar bond measures to this one, and they're able to provide more local dollars. So they say that San Diego is right now at a competitive disadvantage and attracting those matching funds from the state and federal governments. And if they are able to bring in say three times what the local, uh, tax, uh, commitment is, um, then you know, that's money, that's flowing into the local economy through construction jobs, and that will help the city emerge from the recession. That's their argument, right? Speaker 1: 08:06 What do people oppose to measure a offer as an alternative to how's the homeless who needs supportive services? Speaker 4: 08:14 Well, I spoke again to a council member, Scott Sherman, uh, for this story. And he acknowledges that some subsidy is needed for low income housing and permanent supportive housing for the homeless. Um, I think he just disagrees with, uh, the need for this particular tax increase. He thinks that before raising taxes, the city and the state should work to lower the cost of building affordable housing. Um, and it's very true that, uh, that, uh, affordable housing is extremely expensive to build in San Diego and California. Some of the permanent supportive housing units that were built in LA after they passed a similar measure of cost, you know, upwards of 700,000 per unit. Um, and the cost is lower in San Diego, but the fact remains that it is still very expensive to build affordable housing. Speaker 1: 09:03 If this measure does not pass, does the city go back to pre pandemic square one on the homelessness issue? Speaker 4: 09:13 Yeah, I mean, that's a real tough question. You know, I asked, uh, uh, Steven Russell, who I spoke to for this story, what happens if measure a fails? And he says, you know, we're going to keep on trying to build affordable housing and we're going to keep on, um, you know, uh, keep, keep up with this fight regardless of where you fall on measure a, I think it's, uh, it's, um, pretty clear that it will cost more money to build affordable housing and permanent supportive housing for the homeless. And, uh, you know, if it doesn't come from measure a then, uh, you know, we don't know where it will come from. Speaker 1: 09:50 I've been speaking with KPBS, Metro reporter, Andrew Bowen, Andrew. Thank you. Thank you, Maureen.