San Diego falls short of new housing goal, but making progress

(The Center Square)- The city of San Diego allowed permits to build 9,700 homes in San Diego, more than double the 4,700 permitted homes on average from 2014 through 2022.

But the city still fell far below the state assessments for how much new housing is needed. To reach that goal, the city would have to average 16,000 new homes a year through 2029.

Adding to the housing stock is key to addressing the high cost of housing in the city. The average home value in San Diego is $1.03 million in 2024, an 10.3% increase from a year ago, according to Zillow.

“The City will need to permit more than triple the number of homes it currently permits on average each year [to reach that goal],” the city stated in a document.

The city follows a Regional Housing Needs Assessment (RHNA). That’s when the state estimates “each region’s housing needs for all income groups for the upcoming eight years,” according to the city.

Over the last ten years, San Diego permitted the highest number of homes in 2023, according to the city's 2024 Annual Progress Report, which was presented on Aug. 29, 2024, by the Planning Commission.

The report summarizes data from the 2023 Housing Element Annual Progress Report (APR), a report that lists each permit issued by the city for new development, including the number and the types of homes permitted.

“The City made meaningful steps toward meeting its need for homes in 2023 by permitting nearly 9,700 homes, including over 2,500 homes affordable to low-income households. This is significantly higher than the 4,400 homes the City has permitted on average each year between 2014 and 2022. Additionally, the City of San Diego permitted more homes per capita than any large city in California,” said the city in an email to The Center Square.

“However, to address the housing crisis, the State of California set ambitious targets for home permitting that addresses the needs for each local government by income category, and the City did not reach that target last year. While the increased homes in 2023 was encouraging, the City needs to permit nearly double the amount of homes to meet the State’s targets," the city stated.

The city of San Diego said in the email that given the numerous economic factors that go into the how, why, and when of building a home.

The city of San Diego said it is doing its part in removing barriers, stating, “This year the City Council adopted community plan updates that increase housing capacity for 46,200 new homes. The City of San Diego is committed to continuing to provide more capacity for homes throughout the City, speeding up the approval process for permitting new homes, and creating innovative programs to address issues facing home development.”

The city received building permit applications for 10,288 new homes in 2023. In the same year, the city permitted 9,693 new homes, while the report states that 27% of those homes are deed-restricted. The report's income categories were very low, low, and moderate.

While the city is seeking new homes and development, the report shows that 59% of all homes permitted in 2023 were one-bedroom or studio-like homes, and less than 16% of homes approved at the same time had three or more bedrooms. Two-bedroom homes are mostly located in other areas. Family homes have at least two bedrooms, and this is a vital area to track so cities can ensure that housing production stays aligned with residents' needs.

To meet the Regional Housing Needs Assessment allocation by 2029, the city will need to permit 82,344 more homes.

Several Incentive Programs were utilized in 2023 including the Accessory Dwelling Unit Home Density Bonus that was used to permit 158 ADU homes, including 79 moderate-income ADU homes. There 239 new homes were permitted through the ADU home density bonus program between 2021 and 2023.

According to the report, 2,157 new affordable homes were permitted through the Density Bonus Program in 2023. The Affordable Home Density Bonus program was used to permit 3,530 homes, including 1,260 low-income homes, while over 6,107 new homes were permitted through the program between 2021 and 2023.

Complete Communities Housing Solutions issued 1,455 building permits from 2021-23, and nearly 18% of new homes permitted through CCHS are deed-restricted as affordable. Meanwhile, 2,965 new homes were permitted between 2018 and 2023 through the Home Expedite Program.

There were 1,082 new homes permitted in 2023 through Affordable Housing Permit. Now, 56% of new homes permitted using the executive order are in Moderate, High, and Highest resource areas

San Ysidro had the greatest number of permits issued for affordable homes in 2023, with 466 permits issued, and downtown came in second with 459. Nearly 75% of all permitted new homes were in multiple-home developments.