Fred Schnaubelt

TO MAYOR AND CITY COUNCIL                                                                   on                                      Inclusionary Housing                               RE: Council Docket May 20, 2003 Item: Inclusionary Housing  (Postponed from May 6th)

Dear Mayor Murphy & Councilmembers: Please find attached addresses for 19,572 rental units that have sold since January 1, 2002, (Source: CoStarCOMPS, 118 pages).  The median selling price was $86,700 per unit, meaning nearly 10,000 units sold for less than $86,700 (median rent $753) over the last year. This is a gallimaufry of balanced, affordable apartments for those councilmembers who doubt they exist. The San Diego Housing Commission is recommending adoption of an Inclusionary Housing Ordinance, which it will administer. In Housing Commission Report (HCR02-041) dated May 10, 2002 the commission is helping to facilitate, build or fund low-income units at 39th and Polk Ave. costing $199,278 per unit.   In CCDC Memorandum (Agenda #556) dated June 6, 2002 the city is helping to facilitate, build or fund low-income "homeless" units at 9th and F Streets costing an estimated $247,088 per unit. These units are so expensive only the poor can afford to live in them. It's become self-evident the agencies (representing 3% part of the housing market), you rely upon to make your decisions, are the least capable of supplying reasonably priced housing.  Only 191 of 19,572 apartments sold for more than the estimated costs of the 39th & Polk project and only 53 apartments of 19,572, sold for more than the estimated cost of the 9th & F Street project.  What, for crying out loud, is going on?  These city-sponsored projects are supposed to be non-profit.  How can they cost more than double the median selling price of privately built, for-profit rental units? What sense does it make to provide brand new housing, the most expensive consumer item in our economy, to low-income households? How can city funded apartments cost more than 19,000 of the privately sold and bought rental units in San Diego since the beginning of 2002, and claim to be low-cost housing?  No wonder the city is facing a budget crisis! This ordinance is guaranteed to raise the cost of all apartments, condos and single-family homes in the city of San Diego.  When the city increases the cost of brand new housing through this ordinance it increases the price of all housing (after a lag time), pricing ten times more people out of the affordable market than it helps.  According to a Federal Home Loan Bank, San Francisco study, the increase is "almost" dollar for dollar. What besides government regulations and the resultant reduction in new supply explains once affordable 80 year-old homes in North Park, originally costing less than $10,000, now selling for $400,000?  Adjusting $10,000 by the CPI is only $109,642 for this same house.  Nationally, the median home price is about $165,000. Before growth controls San Diego was listed below the national median.  Now it's more than double! There's something inherently wrong with an ordinance that stipulates more than 75% of the people are unable to afford a median priced home (ATTACHMENT 2pg.1, 6pg.2) and infers they are entitled to subsidies -- by City Council decree.  Think about it, half if not an incredible 3/4 of the population will be eligible under this ordinance.  Its purpose: to compel homebuilders to construct and sell brand new homes to people-in-need at below cost. New is the operative word.                                                                                                                                               (Page 1 of 2

                                                      San Diego CA             Copyright © 2003-2010   San Diego Issues, Inc.^tm - All rights reserved
                                                      619.224-8584                                         E-mail           Webmaster                  Disclaimer