Re “Civic Center, Midway Rising still high priorities for mayor” (Jan. 16): In his State of the City address, Mayor Gloria took full credit for increasing the amount of housing being built in San Diego. While expedited permit reviews (“Affordable Housing Now” and “Complete Communities Now”) pulled some projects forward, momentum of those programs has stalled as developers face rising vacancy rates in an overbuilt premium market.
The mechanisms for temporarily stimulating development have consequences. These programs waived Development Impact Fees (despite San Diego’s $6.5 billion infrastructure deficit) and eliminated requirements for including affordable housing onsite.
The market — rents, building costs (materials, labor, insurance, land), interest rates and competition (vacancies) — determines when, where and how much developers build. They are never going to build enough inventory to significantly lower rents and undermine their own profitability by continuing to build. Instead, developers will stop building, hold their properties (land bank) and wait until the market is more favorable for higher rents.
— Danna Givot, San Diego