S1: It's time for Midday Edition on KPBS. Today we are digging into who and what is controlling the cost of housing in San Diego. I'm Jade Hindman. Here's to conversations that keep you informed , inspired , and make you think. We'll discuss the challenges of building affordable housing.
S2: The city's been loosening the rules a lot for a while , and it looks like 2023 was the first year that developers started to say yes loudly.
S1: Then we'll talk about the impact corporate landlords have on our affordability crisis , plus housing support for seniors. That's ahead on Midday Edition. In 2023 , the city of San Diego really stepped up its housing production , nearly twice as many homes were approved for construction than the year prior. But that doesn't mean we've come close to meeting statewide housing goals. Now , why is that ? That's something David Garrick has been following as a reporter with the San Diego Union-Tribune. David , welcome back to midday.
S2: Thanks for having me.
S1: Glad to have you here. So lay this out for us.
S2: So this was almost a double doubling , which was just a real , real surprise even to the city. I think they were happily surprised.
S1:
S2: And that's definitely a concern was it was more of an increase in market rate homes. Although for the first time in a long time , affordable housing did sharply increase. But the city is still far below its state mandated goals for affordable housing , which is a very important issue that the city has been struggling with for years.
S1:
S2: I mean , obviously it depends on your perspective. If you're a single person , it's great news. But most of them are one bedroom apartments and studios. And there were very few three bedrooms or larger units , which leaves a lot of families that are sort of on the edge of affordability , struggling to find places where they can live.
S1:
S2: I think , you know , you've probably been reading stories for the last few years. If you live in San Diego , about a lot of different incentives aimed at getting developers to build more housing. They have a lot of weird acronyms in their title , and a lot of people probably are annoyed and sick of hearing about them , but it appears that they finally started to work. Uh , density bonuses complete communities. Something called an Adu , which is basically a granny flat. The city is loosened its rules on all of those things quite aggressively in the last few years , and this is the first year we've we've really seen impressive results.
S1: Well , you mentioned that San Diego's been behind on housing production for quite some time now.
S2: Unfortunately , we're in a ten year cycle and we're on year four. Uh , and the city is still 82,000 units behind how many they would need to build by the year 2029. Uh , and even though we went from about 5000 a year to 9700 this year , the city would still need to have 16,500 a year during the next five years to reach the goal. So we've come a significant distance , but there's still a long way to go.
S1:
S2: If you're in the development community , you say that the city over regulates and the state over regulates. And I think there is probably some truth to that. There was but a lot of regulation. Uh , but environmentalists obviously don't want things built without the environmental studies being done to make sure that you're not going to endanger the water supply and you're not going to endanger animals. California has some of the most strict environmental rules anywhere in the world , so there's a lot of probably sensible rules in place. But those have made it harder to build and made it more expensive to build. And I think a lot of people will point to the 2008 recession , uh , which obviously was a huge impact on the economy. And there was basically nothing built for a really long time during that period , and it took a long time for the development industry to sort of recover and regenerate momentum.
S1: How do the environmental concerns you mentioned factor into zoning ? I mean , cities have to zone areas for housing to meet state goals. But , you know , that doesn't necessarily translate to housing being built immediately. How might that delay construction in your eyes ? Right.
S2: Well , I think I think the idea is that if a , if a developer is facing a long and expensive approval process , partly because of the environmental rules , then they may decide not to build in San Diego. They may go build in Texas , but if the cities in San Diego and the state of California decides to say , hey , we're going to loosen our rules so much on other stuff that it makes up for the extra environmental stuff , then maybe they'll say , okay , we're going to build in San Diego. I think the idea is , is sort of getting developers to say yes. And the city has been loosening the rules a lot for a while , and it looks like 2023 was the first year that developers started to say yes loudly. So I think it is really a good sign if you're someone really focused on making sure that we build more. I think it's important to note there are a lot of critics out there who say that these programs are giveaways to developers and who cherish sort of the way San Diego neighborhoods are now , and they don't want to see significant changes in the character of San Diego neighborhoods. Uh , you know , a lot of people call those folks NIMBYs , not in my backyard , but I do think they have their voices matter , too. They don't want to see a lot of development change the character of neighborhoods. But the city says we have a housing crisis. We don't want to have everyone's children have to move to Idaho because they can't afford a home here. So let's do these incentives to try to solve the problem. And it looks like these incentives that have been controversial have finally started to work.
S1: And speaking of the way they're kind of building up these new neighborhoods , many of these homes are near public transit.
S2: I mean , that's a national and state model is you want to build dense housing near transit routes. The theory is you want to avoid sprawl if you build high rises out in Rancho Bernardo , where there's no transit , that doesn't make a whole lot of sense. So the theory is to to incentivize developers to build dense , tall , story , high story buildings near either the trolley or near rapid bus routes in places where people can get to jobs and get to medical appointments. And for the first time and this , this go round the city actually had some success with that. A huge swath of the new housing. What is is going to be near transit land. Yeah.
S1: Yeah. And developers who take on projects near public transit can also use the incentives mentioned earlier , like not building parking.
S2: I think there's a few scattered projects that have taken advantage of that. But the two incentive programs that I think that have been the most popular , at least in 2023 , in the last couple of years , are something called a density bonus , where if you're willing to build near transit and you're willing to include low income units in the project , you can build more units than the underlying zoning allows. That makes great sense to developers because that they have more units , they have more profit. They can get the the deal to pencil out And something even more controversial called Complete Communities Housing Solutions. It's a city policy that has generated a lot of backlash , but it allows developers to build significantly more , four times as much as the underlying zoning allows , as long as they add some amenities in , um , and this is a development incentive that I think the development industry may be struggle to understand when it was first approved in 2020 , but it appears they've started to figure it out and that they're going to start using it aggressively.
S1: Earlier you mentioned ADUs and they've contributed to the increase in housing.
S2: Um , and basically they're they're considered the lowest , lowest rung on the housing level. I mean , you want an apartment , you don't really want to live in a backyard unit. But , you know , when things are tough and there's a housing crisis , sometimes a backyard unit is all that people can , can afford. Um , and , and the city has loosened the rules on those aggressive. They have arguably the loosest rules in the state. And it looks like they're working because in 2023 , 1900 , ADUs were approved. Uh , that's the most within a year in city history. And nearly triple the 658 approved the year before. So there's definitely a Ada's are on the rise again , I should mean that there's a backlash against them too , because the city does not require parking for them. And so if you're in a neighborhood where parking is scarce and you see a bunch of ADUs being built in everyone's backyard , you start to think , where the heck is everyone going to park ? So , you know , all these incentives come with their own set of critics are.
S1:
S2: Um , so , uh , San Diego approved 70 homes per 10,000 residents in 2023 , and that was far more than LA , which was at 49 homes approved per 10,000 residents. And then San Francisco was down at 38 per 10,000.
S1: Well , in 2023 , I mean , it was a really good year for new housing projects in San Diego.
S3:
S2: Think , complete Communities Housing Solutions , that controversial one that I mentioned. When you talk to the development community , there is enormous enthusiasm about this. Uh , and I think that that the incentive is going to be used aggressively for the foreseeable future and lead to a lot more housing units in San Diego.
S1: I've been speaking with David Garrick , reporter with the San Diego Union Tribune. David , thank you so much for joining me.
S2: Thanks for your help.
S1: Still ahead , how corporate landlords control housing policy and put renters at risk.
S4: We found that they wield vast influence over policy and can really undermine democracy in order to boost their profits and weaken tenant power.
S1: Hear more when KPBS Midday Edition returns. Welcome back to KPBS Midday Edition. I'm your host , Jade Hindman. The San Diego County Board of Supervisors approved a proposal last week to investigate corporate landlords and their impact on the housing market. Supervisor Tara Lawson Riemer introduced the proposal. It will also consider legal action against Blackstone , the largest landlord in the United States.
S5: We're also going to be doing a deep dive to better understand exactly where and how many homes have been purchased and are being purchased , looking forward by these big institutional investors.
S1: In a statement to KPBS , Blackstone denies doing anything unlawful. Corporate landlords , though , are not unique to San Diego. Nonprofit Human Impact Partners published a recent study about the impact they have on tenants health. Joining me now to unpack the findings is Wil Domini. He's director of the Housing Justice program at Human Impact Partners. Will welcome to midday.
S4: Hi , Jane. It's good to be here.
S1: So good to have you. How do you define what a corporate landlord is ? I mean , what makes them different from a mom and pop landlord ? Yeah.
S4: So in our research , we define them as those that are using corporate structures. So these are things like LLCs or real estate investment trusts. Um , and who own large portfolios of housing. I think Blackstone is a great example here in California or San Diego. And I think they're really differentiated from other landlords in three ways. I think first is their profit motive. You know , all landlords have an incentive to prioritize profit , but corporate landlords really answer to shareholders in a different way. Often folks that are thousands of miles away sitting in a boardroom and some , like private equity firms , are driven to make huge profits very quickly. That's part of their business model , and that can make them especially dangerous for tenants. I think the second thing that differentiates them is they have huge portfolios and market share. So currently it's nearly half of rental housing units are owned by corporate landlords. It's growing. Um , and it means that they can set rents and practices for the broader market. You know , for instance , there's been about 20 class action lawsuits alleging that corporate landlords have used price setting software to manipulate prices and drive up rents. Um , and then third , and potentially most most important is that they have a lot of power. They have the power to really strong arm tenants. They can strong , strong arm of local governments , um , through their lobbying , donations and control of industry associations. And so I think what all of that means together is that they're able to exploit tenants and impact their health in a much bigger scale than other landlords.
S1: Well , your recent study looked into health outcomes for tenants of these corporate landlords. Tell me about how this study was conducted. Yeah.
S4: Yeah. So to our knowledge , this is the first comprehensive research analysis focusing on the health impacts that corporate landlords impose on tenants and residents. We conducted interviews and focus groups with impacted tenants. We did we did some analysis of housing code violations , and we did a comprehensive literature review. And what we found is that corporate landlords utilize six strategies to create harmful housing conditions. and that those harmful housing conditions lead to houselessness , poor mental health and physical health , and the deepening of racial and health inequities at the individual , and that the community level.
S1: Well , talk about some of those health issues that you just mentioned.
S4: Yeah , sure. So the six strategies , the six profit making strategies that we found that they use , that impact health. The first one is they neglect upkeep resulting in substandard housing conditions. This is things like exposure to mold or lead or pest infestation. Tenants shared with us stories of persistent mold with asthma , with weeks without hot water or working toilets and elevators that left them trapped after surgeries. The second strategy is around filing evictions aggressively and driving individuals , families and communities into further financial debt and then also housing instability. We know that both the threat of eviction and actual eviction are linked to poor mental health and physical health outcomes , and that eviction in particular has been linked to premature death. Um , the third strategy is really around hiking up rents and charging ancillary fees. So forcing residents to spend less money on food and sacrifice their medical medical care needs. We heard about them evading taxes and really depriving our communities of the resources that they need to be healthy. Things like funding for public education or public health essential services , dodging accountability by hiding behind a corporate veil and failing to make repairs. And when the local governments can't identify or locate landlords behind LLC structures , some of these unaddressed , substandard housing issues consist exacerbating harmful health conditions. And then finally , we found that they wield vast influence over policy and can really undermine democracy in order to boost their profits and weaken tenant power.
S1: Well , looking back , the 2008 housing crisis really opened the door for many corporations to get involved in the housing market.
S4: Shelter is a basic and fundamental human need , and it should be a human right , right. Like we all need a roof over our head. Stable , accessible , affordable housing is a critical determinant of health. That's what we know from the literature. But in this country , we have a long history of making decisions that prioritize profit over this need and that end up harming collective health. And , you know , we call that the commodification of housing and its functioned along racism to really concentrate wealth in corporate hands and then in white communities and then concentrate in security and health risks in Bipoc communities. And we saw that from the earliest days of this country , which were characterized by by literally stealing land and labor from indigenous communities and black people via colonization and slavery Through the 70s , we saw policies like redlining and racially restrictive covenants that excluded especially black people , but Bipoc people more generally from resources and investment that locked out Bipoc communities from opportunity. And things really shifted in the 80s and 90s as investors realized that there were big profits to be made from Bipoc communities and families. So instead of just locking people out , they started really investing in a speculative way. The federal government at the time was dismantling and discrediting the public housing system and also just deregulating financial markets , and it all collapsed in the 2008 crisis , and it resulted in massive transfer of homes and wealth out of Bipoc communities. And this was really an inflection point because instead of supporting families , the government bailed out big banks and corporations , and they began buying up and renting out those single family homes that , you know , up to that point , had been owned by by families and started renting them out at a massive scale. And this is when corporate landlords ship , at least for single family homes , really took off. You know , I think it's notable that in our research we observe similar patterns during the Covid pandemic , where corporate landlords were pocketing hundreds of millions of dollars of taxpayer dollars at the same time that they were raising rents , filing mass evictions and refusing to make repairs.
S1: Last week , President Biden announced a proposal to give corporate landlords a choice either cap rent increases on existing units to no more than 5% or lose federal tax breaks.
S6:
S4: Let me take a step back. If implemented , I think it would be huge and I think we're strongly supportive. I think this is a , you know , a real step forward. I think it's a really basic argument to say that public dollars , public tax breaks should support public priorities and should support public health. I think that's that's just like a basic argument to make. And so , you know , I think it's a great job that the president is taking some leadership here. And the administration's actions don't go far enough. So he's really suggesting to Congress that they do this. And given the state of the political deadlock in this country , I think it's really unlikely that they're going to pass the proposal. And so I think it's important to note that the Biden administration has the power to unilaterally create this kind of rent cap for properties that receive taxpayer subsidies and the homes guarantee. Campaign has been pushing the president to do so for a long time , and I think we can partly credit the action that he did take based on that pressure. And we really need the president to work with the Federal Housing Finance Agency to take that kind of action administratively , which they can do without Congress. On.
S7: On.
S1: A local government level.
S4: And I'm really excited to see , you know , all the organizing by Ace and others , for instance , in San Diego and the county taking some responsibility to really explore ways that it can push back on corporate landlords. And we identified five critical actions that local governments can take. The first one is around increasing ownership transparency so we know who owns our homes. Number two , we need to ensure and local governments need to ensure safe housing conditions using proactive code enforcement and other tools that that are powerful enough to hold corporate landlords accountable. We need to protect tenants rights , and I think this is where we differ from some other policy proposals. I think often people call for more kind of like technical fixes , and we're really arguing that to be successful , we need to shift the balance of power and make sure that tenants actually have enough power to change , um , change their housing situations , both individually and collectively. And doing that takes protecting tenants rights , instituting protections for those who report hazardous conditions or organize , and then also just baseline protections like rent control and just cause eviction , so that tenants have a basic level of stability from which to advocate for healthier conditions.
S1: Well , so what are some of the things we can do to shift the things that are causing this problem ? Right.
S4: So I think , um , One is limiting harmful speculation by ending taxpayer support for bad actors. This is a way that we can intervene at a root cause level. We can pass all the protections we want , but as long as our policy choices encourage speculation and profiteering , we're going to be fighting an uphill battle. And so we can intervene by limiting the flow of taxpayer resources. Um , you know , this is what the Biden proposal does , and we can do similar things at the local level and really stop the flow of local taxpayer resources to bad actors. Um , and then finally , you know , more and more over the long term , I think we can support public and community controlled housing options. I think most of us agree that there's something broken with our housing system , especially in California , and the federal government has defunded and intentionally discredited public housing market rate developers , especially again in California , are focused on building profitable luxury housing. Corporate landlords are increasingly investing in and and trying to profit from our current subsidized housing , like low income housing , tax credit housing , often with disastrous implications for tenant health. But across the country , there's a rising focus on housing types that are permanently affordable and community controlled. This is things like land trusts or actually resourcing public or social housing to be high quality and green. Resident ownership in mobile home communities and other options. And this is something that the health sector and public health is already starting to understand the benefits of and invest in.
S1: I've been speaking with Wil Domini. He leads the housing justice program at the public health nonprofit Human Impact Partners. Will thank you very much for joining us.
S4: Thank you so much , Jane.
S1: Coming up , why seniors are so vulnerable to homelessness and the resources out there.
S8: A lot of the seniors that we're serving have less and less familial support , but also need additional assistance with food , with medical care.
S1: KPBS Midday Edition returns after the break. Welcome back to KPBS Midday Edition. I'm your host , Jade Hindman. On today's show , we've been talking about the housing affordability crisis in our region. One group is especially vulnerable to the rising cost. Are seniors 1 in 4 people experiencing homelessness in San Diego is over 55 years old , according to this year's point in time count. And nearly half of unhoused older adults were houseless for the first time. Joining me to discuss this is Melinda Faust. She's chief operating officer of Serving Seniors , a nonprofit working with San Diego's older adults. Melinda , welcome back to Midday Edition.
S8: Thanks for having me , Jade.
S1: Glad to have you here. And in the last couple of years , we've seen an uptick in older adults experiencing homelessness for the first time.
S8: So this could be something like the loss of a job or a spouse , a medical illness. Um , and often it's simply increased rent with a fixed income. Hmm.
S1: Hmm.
S8: Many are living off just $1,200 a month. So when you look at the average cost of a one bedroom in San Diego , you know , that's well over $2,000 a month. So they don't even many of them don't even have enough rent for the average cost. You know , in addition to that , a lot of the seniors that we're serving have less and less familial support , but also need additional assistance with food , with medical care.
S1: You know , there's a large gap in our system for older unhoused people in need of medical attention.
S8: So currently within our shelter system , you know , most of the shelters are not equipped to serve folks who may have just been discharged from the hospital or may need assistance with , you know , cooking with changing themselves. So often the most vulnerable folks are actually discharged either to the streets or they're turned away from shelters simply because shelters don't have the capacity to meet their needs.
S7: Yeah , well , we're.
S1: About one year out from San Diego's ban on public camping.
S8: So really , this encampment band has not addressed the problem. It's really just reshuffled folks around.
S1: So do seniors in those areas that you mentioned have the same access to services.
S8: So often they do not. A large number of the services , you know , are in the downtown area. And while some of these communities absolutely have stepped up and increase their services , you know , many of these folks now are displaced. Um , they may not have access to resources like they did before. They may have lost their belongings along the way. So really , you know , this encampment ban has just been so detrimental to so many of the older adults in our community.
S1: Well , right now the county is running a pilot program. It's called Shallow Rental Subsidy , and it's to assist seniors by providing a flat rate of $500 a month towards rent. How does that program work ? Yeah.
S8: So we are thrilled , um , serving seniors really strongly advocated for this program. And essentially this is targeted on older adults with the highest rent burden. So they're paying the most of the amount of their income towards rent. And this is really then working with the county to provide a $500 a month subsidy that goes directly to the landlord , and then that frees up that funding so folks can meet their basic needs such as medical care , transportation and food.
S1: All right. Well , we recently hosted a live community conversation on the cost of living crisis in San Diego. One of the panelist , Kia Pollard , um , actually spoke about a guaranteed income program she's running. She said just a little bit of extra income can make a huge difference in someone's life. What could that financial support mean for seniors ? Sure.
S8: So serving seniors conducted a needs assessment a few years back. And , you know , one of the questions we asked was what amount of money would have kept you from falling into homelessness ? And , you know , the overwhelming majority , over 75% had shared if they did have $500 a month in additional assistance , where they didn't have to pay that towards rent , then they could have paid a medical bill. You know , they could have used it for transportation , they could have met their basic needs , and it really would have prevented hundreds , potentially even thousands of older adults from falling into homelessness.
S1:
S8: We know that is the number one need , um , you know , in addition to making our shelters more age friendly , we need to continue to expand these programs that we know work. So programs like the shell rental subsidy , programs like Family reunification. And , you know , I would just like to add to I think it's critical that we destigmatize this. We know that 89% of folks who have fallen into homelessness , um , were living in San Diego at the time. So this happened under our watch. And we really need to continue to step up as a community. and and provide these resources for our neighbors , for our family members and for our friends.
S1: I've been speaking with Melinda Foresti. She's chief operating officer of Serving Seniors , a nonprofit working with San Diego's older adults. Melinda , thank you for joining us today. Thank you. Information about the county's rental subsidy program for seniors is available at KPBS. Org. That's our show for today. I'm your host , Jade Hindman. Thanks for tuning in to Midday Edition. Be sure to have a great day on purpose , everyone.
