San Diego takes key step toward preserving thousands of low-rent apartments – San Diego Union-Tribune

Thousands of low-rent apartments in San Diego would be less vulnerable to demolition under a proposed city law that received unanimous approval Thursday from a key city committee.

The long-awaited law, which would be the first city-passed legislation focused on subsidized housing preservation, now heads to the full City Council for final approval.

The law would require apartment owners with subsidized units for low- and moderate-income residents to notify the city and housing developers if they decide to sell their project.

Developers approved by the city would have the right to make a first bid on a project. And if the owner chooses another buyer, city-approved developers would have a chance to outbid that buyer.

The goal is to prevent a possible sale to someone who plans to tear down the rent-restricted apartments and replace them with market-rate housing when the restrictions expire in the 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 that we continue to preserve existing units,” Councilwoman Vivian Moreno said. “This ordinance is reasonable and, if passed, will be an effective tool to allow the city to keep deed-restricted units in place in San Diego.”

San Diego would be the first local city to pass such a law.

Councilman Stephen Whitburn said San Diego won’t solve the housing crisis by focusing only on encouraging the construction of new affordable housing for low- and moderate-income people.

“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 needed to contribute millions to make the law effective, and others said the law should go forward.

Housing developers would be more likely to make offers on condos with expiring deed restrictions — and accept those offers — if city funds were available to help, some speakers said.

“The city really needs to consider investing there,” said Ricardo Flores, executive director of a nonprofit focused on affordable housing. “It’s one thing to say you have an ordinance. But if there is no money attached, then what?

Eight of the nine city council members urged Mayor Todd Gloria in recent budget request memos to create a city housing preservation fund to fill that role. Five members suggested providing the fund with $3 million in seed money.

Other critics said the law should also seek to preserve not just restricted units, but also “natural” affordable housing — apartments that command low rents because they are old or located in unattractive areas.

A 2020 survey by the city’s Housing Commission found that the city had 22,000 rent-restricted subsidized units and another 48,000 units that are considered natural affordable housing.

Critics note that those 22,000 units represent just 14 percent of the city’s units.

City officials have been slow to complete the housing preservation action plan passed by the council in the fall of 2020. But the housing preservation law is perhaps the most important part of that plan.

Developers and real estate industry leaders praised the city for meeting with interested groups many times as the ordinance was drafted over the past two years.

Assistant City Attorney Corrine Neuffer said Thursday that small additional changes could be made to the bill before the council takes a final vote.

Originally published: November 21, 2024 at 6:14 PM PST