Housing Supply Crisis
SCRHA Supports Housing Development in San Diego, California
The San Diego, Imperial, and southern Riverside region in California are beautiful places to live in and contain some of the most expensive real estate markets in the United States because some of the communities are highly coveted by residents and businesses.
Despite the popularity of each region and population over the last several decades, housing construction has not kept pace resulting in acute shortage of available housing for residents.
According to California Department of Housing & Community Development (HDC), Southern California Association of Governments (SCAG), and San Diego Association of Government (SANDAG), San Diego region needs to add at least 12,000 new homes each year to keep pace. SCAG projects that Southern California, excluding the San Diego but including Riverside and Imperial regions, will need to build approximately 836,000 new homes for existing need and add another approximate 504,000 new homes to meet projected demand for homes between 2021-2029. A 2018 HCD report concluded California was only building about 80,000, instead of needed 180,000, new homes annually over the 10 years.
Addressing The Supply Crisis
The Southern California Rental Housing Association strongly supports the development of new housing of all types and at all price points. Our region, California, and the nation have a deficit of housing. This has led to increased prices. The only real way to control costs going forward is to meet demand! That is why SCRHA supports policies at all levels of government that help streamline housing development, remove the barriers to housing construction, and lower the costs to build which ultimately are passed along to renters and buyers.
We urge our state and local governments to look at ways to add housing units by reducing regulatory barriers and fees as well as addressing factors that contribute to time delays, which increase costs.
San Diego Reports and Studies
- Addressing The Housing Affordability Crisis: San Diego Housing Production Objectives 2018-2028 – San Diego Housing Commission
- Opening San Diego’s Door to Lowering Housing Costs – Fermanian Business & Economic Institute at Point Loma Nazarene University.
- Addressing The Housing Affordability Crisis – San Diego Housing Commission
- Location Matters: Affordable Housing & VMT Reduction in San Diego County – San Diego Housing Federation
Riverside Region Reports and Studies
- Inland Empire Intelligence Report Summer 2021, UC Riverside School of Business, Center for Economic Forecasting & Development
Riding the Coronavirus Coaster: An economic outlook for 2021, UC Riverside School of Business, Center for Economic Forecasting & Development
State and National Reports
California’s Housing Future: Challenges and Opportunities – Final Statewide Housing Assessment 2025, CA Department of Housing & Community Development
Housing Programs & Initiatives, Southern California Association of Governments
Mission Impossible? Meeting California’s Housing Challenge, Southern California Association of Governments
Core Commandments of Rental Housing
Costa-Hawkins Rental Housing Act
Passed in 1995, Costa-Hawkins places statewide limits on local rent control ordinances. Local rent control laws generally cannot apply to units built after 1995 and cannot apply to single-family homes and condos. Additionally, Costa-Hawkins provides landlords in rent control areas with “vacancy decontrol,” meaning a landlord can set the initial rent once original tenants vacate a unit.
The Ellis Act exists to assist property owners in rent control areas exit the rental housing business. Typically, local rent control regulations place limits on how much a landlord can raise the rent each year. This can become financially burdensome to many owners who may find themselves losing money on their investment. The Ellis Act provides a means to exit the rental housing business and help property owners avoid financial ruin.
Fair Housing Laws
Property owners and managers, as well as their staff, should be well versed on both Federal and California Fair Housing Laws. These laws protect people from discrimination when they are renting, buying, or securing financing for any housing. Federal prohibitions specifically cover discrimination because of race, color, national origin, religion, sex, disability, and the presence of children. State Fair Housing covers age, race/color, ancestry/national origin, religion, disability/ mental or physical, Sex/gender, sexual orientation, gender identity/gender expression, genetic information, marital status, familial status, and source of income.
Problems with Rent Control
If you do some research you will see that almost all economists and researchers agree that rent control is a flawed policy for many reasons. Here are some of the top reasons why rent control does more harm than good.
- Rent control is not based on need. It is based on luck…where you are at the time it is implemented. There is no means testing, meaning those who need it the most often do not benefit from it.
- Those with rent controlled units are far less likely to move, even if their income improves, making available units harder to come by and pushing prices up further for those that are available.
- Rent control often deters new construction, exacerbating existing supply issues.
- Artificial price controls on property owners often lead to less money for owners to reinvest in their properties. Much of the housing stock throughout the nation was built prior to 1980, meaning that these properties will need maintenance and upgrades in coming years. Rent control directly impacts a property owner’s ability to do such rehab.