The San Diego Housing Federation and its partner advocates are celebrating the final approval by City Council on a compromise to restore workforce housing offset fees to their original levels—anticipated to provide an additional $2 million a year for the City’s housing fund. The Affordable Housing Fund has two dedicated funding sources:
- The Inclusionary Housing Fund, created by the City in 2003, which is funded with fees applied to residential developments and
- The Housing Trust Fund, created by the City in 2009, which is funded by Housing Impact Fees (or linkage fees) charged to commercial developers.
Last year, the Council approved restoring the housing impact fee to its original level, but opponents collected enough petition signatures to get the Council to rescind the increase, which led to the compromise passed on October 21, 2014. The agreement was reached between the San Diego Housing Commission, which administers the City’s affordable housing programs, and the Jobs Coalition business group. Final details were negotiated by Councilwoman Myrtle Cole. “At the end of the day, this ordinance will provide greater certainty for both our affordable housing advocates and developers,” Cole said, as reported by KPBS. “It will create a supply of affordable housing. It will improve business and development.”
The consensus is that the Workforce Housing Offset, or housing impact fee, is not the single solution to addressing the need for secure affordable homes throughout San Diego, but advocates see this as a significant step toward providing opportunities for the 45,000 households on waiting lists for rental assistance in the city. These funds will also leverage additional state and federal resources in providing needed housing.
The compromise will restore the housing impact fee to its original levels phased in over three years and allows for certain exemptions. One of the key issues affordable housing advocates had with the initial version of the proposal was that it would sunset after three years. The fees have not been increased in almost twenty years, and were actually cut in half in 1996. The earlier proposal would have resulted in less revenue for affordable housing. With the sunset provision removed, the City’s Housing Fund will see an annual increase from the current $2.2 million a year to around $3.8 million annually. Over twenty years, this means an additional $32 million for affordable homes in San Diego!
The San Diego Housing Federation has expressed its appreciation to the San Diego City Council for recognizing the affordable housing community’s concerns and working with the parties involved to reach an agreement. The Federation members and partners worked to ensure a strong voice on this issue and welcomed the San Diego Housing Commission and members of the Jobs Coalition for working on the compromise.
“This agreement recognizes the efforts of the Housing Federation and is an important measure to help bring in an additional $32 million for affordable housing over the next twenty years“, noted San Diego Housing Federation Executive Director Bruce Reznik. “While this does not solve the affordable housing crisis in the city, it’s a positive step to ensure all San Diegans will eventually have a safe and stable place to call home.”
The San Diego Housing Commission produces an annual plan for the use of the Affordable Housing Fund. Currently,
- no less than ten percent is to be used for transitional housing,
- no less than 60 percent for housing affordable to very low-income households;
- no more than 20 percent for low-income households; and
- no more than ten percent for median and moderate income first-time homebuyers.
The Fund supports fourteen transitional housing programs, operated by nonprofit organizations that provide temporary housing and services for more than 400 households working to become self-sufficient. Since the inception of the Housing Trust Fund and the Inclusionary Housing Fund, 7,320 completed affordable renter and owner homes have been made available in San Diego.
Contact: Bruce Reznik, Executive Director, San Diego Housing Federation, 110 West C Street, Suite 1811, San Diego, CA 92101 (619-239-6693) or http://housingsandiego.org/