Findings 2017-10-19T17:07:54+00:00

Studies

About the Point Loma Nazarene University Housing Study

Opening San Diego’s Door to Lower Home Costs

The Point Loma Nazarene University Housing Study is an attempt to quantify and present an objective analysis of the cumulative economic impact of government fees, regulations, and requirements on the cost of new single and multi-family housing. Seven jurisdictions were analyzed: Carlsbad, Chula Vista, the City of San Diego, San Marcos, Santee, other incorporated cities as a group, and unincorporated areas of San Diego County.

In addition to estimating the impact of regulations, they looked at the ripple effects the regulatory environment has upon different economic variables, such as overall implications for population growth, business formation, job creation, and economic growth.

They concluded that by analyzing the economic benefits that could be realized from a relatively moderate reduction in the regulatory costs currently restricting housing access. Additionally, they developed a set of best practices and present a set of actionable recommendations to improve the regulatory process regarding plan use, entitlements, and permitting, while at the same time preserving public goals.

Affordable Housing for working families.

Researchers studied the effects of local government fees, regulations, and requirements on the cost of new single and multifamily housing, both purchased and rented. Their report identifies the government barriers to housing production and seeks to create greater overall housing affordability by reducing costs and increasing efficiencies in the approval process.

Housing Costs

Many aspects of the regulatory process lead to higher housing costs, the report found. The effect of adding additional layers of regulations over decades has been to raise the price of for-sale and rental housing beyond the reach of many county residents. The high cost of housing is the single greatest challenge to the fulfillment of the San Diego region’s potential.

High Regulatory Costs

About 40% of the cost of housing across all price segments is due to government regulation. The time involved in the approval process can add 15% or more to the price of a new home. Projects where master plans aren’t already in place can require 12 years or more before the first dwelling is ready for sale.

A Lengthy Process

Currently, the housing approval process can take several years to complete. Prolonged delays can create millions of dollars in additional costs, decreasing home affordability.

Priced Out

About 233,000 households throughout San Diego County are priced out of the market for owned or rented housing. Under present circumstances, many households may be forced to share housing with others or find shelter outside the county. Affordability is expected to decline as home prices rise faster than wages.

An Achievable Solution

A reduction of just 3% in regulatory costs could add about 37,000 jobs to the local economy while creating housing alternatives for about 6,750 additional households in a year. The resulting increase in homebuilding could raise the gross regional product by $3.1 billion. Total personal income could increase by $2.5 billion.

A Need for Incentives

The report cites a lack of incentives to encourage municipalities to work more efficiently. Because city and county housing regulators are paid hourly, there’s no incentive for them to speed up the approval process and increase home affordability.

Seven San Diego County jurisdictions were analyzed for this report: Carlsbad, Chula Vista, San Diego, San Marcos, Santee, other incorporated communities as a group, and unincorporated areas.