Schnaubelt Discusses Affordable Housing and Gov. Brown.

Home

About

Issues

Schnaubelt

Stepner

Darragh

Links

Other Articles

Contact

Fred Schnaubelt

Will Affordable Housing Be Abolished by Gov. Brown?

San Diego Transcript Mar. 3, 2011

Affordable housing advocates are in a tizzy over Gov. Brown's plan to dissolve redevelopment agencies and the future of enormously expensive "affordable housing." Redevelopment law requires 20 percent of the increase in redevelopment area taxes to be allocated for affordable housing.

In 30 years not a single person has been able to explain why "poor people" -- many without a high school diploma and who self-report to the Census they can't speak English -- are entitled to enjoy the most expensive consumer product in society -- a brand new home or apartment. Or why housing for the poor should cost more than double the housing occupied by most self-supporting renters. After all, the overwhelming majority of people have never lived in an expensive brand-new dwelling unit.

Demanding the creation of brand new affordable housing in redevelopment areas costing over $300,000 per unit is akin to demanding that Mercedes Benz sell 20 percent of its new cars to people who can't afford them. What's wrong with a used car or used house for people with limited education, limited work experience and limited income is a question that needs to be answered. Last year the median priced apartment in San Diego sold for $110,664.

The latest U.S. Census report indicates that 14.8 percent of adults over 25 in San Diego do not have a high school diploma and 15.6 percent cannot speak English well (some of whom are represented by interpreters at affordable housing hearings).

If you're not motivated to get an education and can't speak the language, chances are you'll not own a home and may struggle to pay rent. The Federal Reserve Bank of St. Louis has reported that high school graduates earn half of what college graduates earn and those without a diploma earn less than one-third.

Even acknowledging the importance of education and speaking English, the majority of low-income households will not be low-income in 10 years as documented in several studies (unless government showers them with incentives to fail). See: By Our Own Bootstraps, Federal Reserve Bank of Dallas. (dallasfed.org/fed/annual/1999p/ar95.html) In a 10-year study 95 percent of the people move up the economic ladder from the bottom quintile. Why should they be entitled to leapfrog years early over those earning their way up the ladder of success?

Affordable housing lobbyists are concerned about cutbacks if redevelopment agencies are abolished by Gov. Brown. How committed are they, however, to really increasing the total supply of housing? In dozens of newspaper articles there's no mention of the San Diego Housing Federation, faith-based San Diego Organizing Project, or other advocates supporting housing projects that were in jeopardy of being approved. We read of no testimony from them in favor of any of the "opposed" sampling below:

500 apartments on Mission Gorge Road;

600 homes to be built in Escondido on the old K-Mart site;

404 homes near Eagle Crest;

1,700 homes in western Valley Center;

500 Homes in East Elliott;

1200 apartment in Penasquitos;

In favor of 17,640 dwellings in the City of Villages plan or against the San Marcos Housing moratorium.

But you may think these projects are not affordable and they have no implications for increasing the so-called "affordable housing" supply. Housing advocates seem clueless on how the housing market actually works and how to help the greatest number of people.

The San Diego Housing Federation's Susan Tinsky writes (Union-Tribune, Feb. 27) that "56 percent of renters in San Diego County are unable to afford the $1,324 per month average fair-market rent on a two bedroom apartment." The average rent however, includes Mission Beach, La Jolla and Del Mar. Last October the Census reported the "median" San Diego rent as $1,224, meaning half the rents are less. Also, nearly 70 percent of tenants pay less than $1,499 per month and 146,000 renters (34 percent) pay less than $999 per month. The private unsubsidized market provides substantially more housing for low-income tenants than government programs. However, it's true it's not brand new or among the most expensive apartments in all of San Diego. Look around, the majority of low-income families do not live in subsidized housing.

The last truly comprehensive study, the 1994 American Housing Survey for San Diego, while out of date, showed government providing less than 5 percent of all housing. Today, it's estimated to be under 10 percent. At the time the capitalistic, free enterprise, "for profit" market provided 12 times as much low-income housing as the city and county housing authorities in the lowest category, 20 times as much in the $200 to $299 range, 50 times as much in the $300 to $399 range, and up to 100 times as much housing in the remaining categories served by the housing authorities.

According to a University of Michigan study, "New homes and poor people," the construction of 1,000 new dwelling units, both homes and apartments, makes it possible for 3,545 households to move to better accommodations. Of the 3,545 moves surveyed, 1,290 were by low- and moderate-income families.

This is the essence of upward mobility. Anyone who didn't move to a brand new house when they left their parents' home or graduated from college, know how the housing market works. Used housing is "affordable housing." Not all used housing is affordable of course, but the private market supplies far more housing for low-income people than all government programs. It just isn't the most expensive, brand new housing.

Affordable housing lobbyists, if serious, would testify in favor of every proposed housing project in the county -- that is all proposed housing, if they honestly want to do good.

Schnaubelt, president of Citizens for Private Property Rights, has been a commercial real estate broker
for 39 years and was a San Diego City Councilman from 1977-81.