Thousands of low-rent San Diego apartments would be less vulnerable to getting torn down under a proposed city law that received unanimous approval Thursday from a key city committee.
The long-awaited law, which would be the first legislation passed by the city focused on preserving subsidized housing, now heads to the full City Council for final approval.
The law would force the owners of apartment buildings with subsidized units for low-income and moderate-income residents to notify the city and housing developers if they decide to sell their project.
Developers approved by the city would get the right to make a first offer on a project. And if the owner chooses a different buyer, city-approved developers would get a chance to outbid that buyer.
The goal is to potentially prevent a sale to someone planning to tear down the rent-restricted apartments and replace them with market-rate housing when the restrictions expire in coming years.
It could also prevent someone from buying rent-restricted apartments, waiting for the rent restrictions to expire, and then remodeling the units so they can charge dramatically higher rents.
“Having an ordinance like this in place is an absolutely essential tool to ensure we continue to preserve existing units,” said Councilmember Vivian Moreno. “This ordinance is reasonable and, if enacted, will be an effective tool to allow the city to keep deed-restricted units in place across San Diego.”
San Diego would be the first local city to approve such a law.
Councilmember Stephen Whitburn said San Diego won’t solve its housing crisis by focusing only on encouraging construction of new units affordable to people with low and moderate incomes.
“As we produce new affordable housing, we don’t want to lose existing affordable housing,” Whitburn said before Thursday’s vote by the Land Use and Housing Committee. “Otherwise, we’re just spinning our wheels.”
The new law received mostly praise from speakers during the meeting. But some said the city needs to contribute millions to make the law effective, and others said the law should go further.
Housing developers would be far more likely to make offers on apartments with expiring deed restrictions — and have those offers accepted — if city funds are available to help, some speakers said.
“The city really does need to consider putting some investment in there,” said Ricardo Flores, executive director of a nonprofit focused on affordable housing. “It’s one thing to say that you have an ordinance. But if there’s no money attached to it, then what?”
Eight of the city’s nine council members urged Mayor Todd Gloria in recent budget request memos to create a city housing preservation fund that would fulfill that role. Five members suggested providing the fund $3 million in seed money.
Other critics said the law should also seek to preserve not just deed-restricted units but also “naturally occurring” affordable housing — apartments that have low rents because they are old or located in unappealing areas.
A 2020 survey by the city’s Housing Commission found the city had 22,000 subsidized units with rent restrictions and another 48,000 units that are deemed naturally occurring affordable housing.
Critics note that those 22,000 units make up only 14 percent of the units in the city.
City officials have been slow to follow through on a housing preservation action plan the council adopted in the fall of 2020. But the housing preservation law is perhaps the most important part of that plan.
Developers and housing industry leaders praised the city for meeting with interested groups many times as the ordinance was being developed over the last two years.
Deputy City Attorney Corrine Neuffer said Thursday that additional small changes could be made to the proposed law before the council takes a final vote.
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