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San Diego’s ‘Inclusionary Housing’ Policy Broken Down

This blog post will break down San Diego’s new Inclusionary Housing policy and explain the changes made to the already existing policy aimed at increasing affordable housing in an increasingly unaffordable city like San Diego.

The new Inclusionary Housing policy put into place in 2019 has added on to the existing Inclusionary Housing policy that has existed since 2003. Though the promise of the new policy was to make it impossible for developers to make new buildings without designating 10% of the space to affordable housing, this policy doesn’t necessarily do that. The new Inclusionary Housing policy simply makes it more difficult for developers to avoid including affordable housing by imposing a heftier tax if developers do not add the specified amount of affordable housing.

The policy, aimed at fixing the low percentage of affordable housing availability in San Diego by way of the private market, requires developers of two or more units to set aside at least 10 percent of their units as affordable housing units for the next 55 years. Developers of condominiums must set aside five percent. If developers choose to not follow this policy, they will be charged a fee that is calculated annually by the San Diego Housing Commission. This fee will be much higher than the fees of the old policy. The hope is that requiring developers to pay a far higher fee to avoid the policy will force more developers to add affordable housing to their new developments.

The funds from the Inclusionary Affordable Housing Fee will be directly deposited into the City of San Diego’s Affordable Housing Fund. This fund, administered by the SDHC, will benefit the very low-, low-, and median income households in San Diego.

Champions of the policy are excited of the prospect of the policy to increase the diversification of neighborhoods in a city that some say is still segregated by race and class. The addition of affordable housing to new developments is seen as a move that will foster social inclusion within the city. In addition to the social inclusion aspect, there has never been a time where San Diego has needed more affordable housing as badly as now. According to Dr. Murtaza Baxamusa, less than 10% of the rental housing stock in San Diego is affordable. 

Critics of the changes say that the policy could have the reverse effect of what it intends to accomplish. During a time when building in San Diego is stalling, critics of the policy believe that this will provide a further barrier to entry and discourage new development. People do not disagree that something needs to be done to add more affordable housing in San Diego, but some do not think that the new changes to the Inclusionary Housing policy are the way to go about it. The new regulations, in many critics’ opinions, would threaten the ability of many developers to turn a profit.

It is not known whether the policy will significantly help or hamper the efforts of the city to increase affordable housing. For more details on the new Inclusionary Housing policy, check out the San Diego Housing Commission website

In an effort that may complement the Inclusionary Housing Policy, many San Diegans took to the streets on July 31st to support an affordable housing measure that could make its way to the 2020 ballot. This measure calls for a property tax increase of 19 cents per $1,000 of assessed value. The measure, called the Affordable Housing Bond Measure, aims to build 7,500 homes for low income and homeless people in the San Diego area. The Affordable Housing Bond Measure and the Inclusionary Housing policy seem like steps in the right direction of addressing housing shortcomings and homeless in the city of San Diego.