Opinion: Privatizing permits to speed up house construction and reduce costs

December 24, 2021

To make housing affordable in San Diego, the local government must privatize the licensing process, waive the exorbitant permit fees associated with building ancillary housing, and encourage the construction of affordable housing projects by reducing the cost of construction.

House prices in San Diego rose 15.4% year on year. Wages will never go up at the same rate, so for the average San Diego it is impossible to qualify for housing. To buy an average-priced home in San Diego, a buyer needs to earn about $ 139,200 per year – about double what the average worker in San Diego earns.

Elected leaders have been touting their support for affordable housing for years, but the opposite has happened. Houses are more expensive relative to income today than they were ten years ago.

The government’s default solution to making housing affordable has been rent control, but rent control makes housing even less affordable as landlords remove their properties from the rental market, further limiting the supply of housing and increasing housing availability. rental rates.

To help make homes affordable, the government needs to streamline the construction process. One sure way to do this is to privatize the city, which cuts red tape and spurs economic development.

Currently, the authorization process in San Diego is long and expensive. To make the process more cost effective, San Diego needs to replicate what officials did in Phoenix: shift a significant portion of planning and inspection functions to the private sector.

Phoenix has instituted what’s known as a “self-certification” model, which means architects and engineers who have been trained in town can submit plans and go out with a permit on the same visit. This includes all new construction up to 75 feet in height, all leasehold improvements and even historic preservation.

Regulatory costs to build a home are high in San Diego, accounting for between 34% and 51% of the average cost of building a home. Local government has the ability to manage regulatory costs and make housing more affordable by removing or drastically reducing permit fees for affordable housing projects and the construction of ancillary housing units commonly known as granny apartments.

While license fees can serve an important purpose, they can add up as well. The local government can encourage the development of new affordable housing by waiving these fees for qualifying affordable housing projects.

Cities can offer fee waivers to developers of eligible projects in a number of ways. Typically, developers must submit a waiver request to the city, along with documents proving their intention to comply with the eligibility requirements. Once the application is approved for an eligible project, the permit fees are waived, reducing construction costs.

The definition of affordable housing is that rent or a mortgage plus utility payments total 30% or less of a household’s gross income. Households that pay more are considered to have high costs and may have difficulty paying for other necessities such as transportation, food and medical care. No one should have to choose between paying their rent or paying for food or medical care.

Affordable housing is for those with modest incomes, such as restaurant and hotel workers. Some say if you can’t afford to live in San Diego then move to a cheaper city. But this reasoning is shortsighted and unrealistic.

Our service providers need to be able to live in the same city where they work. And the lack of affordable, quality housing can exacerbate social problems such as homelessness. San Diego is already in the top 10 cities with the largest homeless population in the country.

There is no one-size-fits-all solution to tackling the affordable housing and rental crisis in San Diego, and we will most likely need a multi-faceted approach to increasing housing supply and affordability. Therefore, we must encourage our elected officials to take the bold steps necessary to make housing affordable by privatizing the permitting process, eliminating the permit fees associated with the construction of auxiliary housing units and further relaxing the restrictions surrounding the construction of new affordable housing in general.

With the right planning and leadership, local government can help make the dream of homeownership more achievable for people in San Diego.

Mark Powell is a real estate broker and a former member of the San Diego County School Board.


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