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State Sen. Ben Hueso (D-San Diego) is proposing a new regional agency to address affordable housing projects, like this one in Carlsbad. Photo by Steve Puterski
State Sen. Ben Hueso (D-San Diego) is proposing a new regional agency to address affordable housing projects, like this one in Carlsbad. Photo by Steve Puterski

SANDAG board supports creation of regional affordable housing agency

REGION — The San Diego Association of Governments’ board of directors voted on July 8 to support the creation of a new regional affordable housing agency as outlined in an amended California housing bill.

But the proposal faces criticism for its proposed tax and governance structure and has raised questions about its ability to accelerate housing projects. 

The amendments to Senate Bill 1105 by State Sen. Ben Hueso (D-San Diego) would establish the San Diego Regional Equitable and Environmentally Friendly Affordable Housing Agency — a regional agency focused on affordable housing development and subsidy programs.

County Supervisor Terra Lawson-Remer said the agency, similar to SANDAG, would be able to levy taxes and apply for state and federal funding to help the region build more housing.

“We can be competitive with San Francisco and Los Angeles to raise revenue and then secure funds to build affordable and workforce housing,” Lawson-Remer added. “It has a clear San Diego stamp.”

The bill would authorize the agency to, among other things, incur and issue debt, place various measures on the county ballot to raise and allocate funds and issue general obligation bonds secured by levying ad valorem property taxes.

Among the funding measures, the bill would authorize the agency to impose a parcel tax, a gross receipts business license tax, a unique business tax, specified special taxes on real property, a commercial linkage fee, and others.

Under the state bill, the agency cannot place a measure on the ballot to “raise revenue” unless it enters into a specific countywide project labor agreement with the San Diego County Building and Trades Council, AFLI-CIO union and San Diego Housing Federation.

However, the nonprofit San Diego Housing Federation opposes the bill, according to an Assembly consultant’s bill analysis.

Eligible residents include those at or below 120% of the area median income. According to the bill, a first-time homebuyer program would provide grants, loans, financial coaching and counseling, direct subsidies, a development subsidy and other forms of assistance. Properties include single-family, townhomes, condos, twin and row homes, co-ops and more as their primary residence.

Also, the properties will be deed restricted and limits future sales prices to no more than 10% annualized appreciation above the purchase price.

“Having a different approach, a regional approach was important to me,” Solana Beach Mayor Lisa Heebner said, who motioned to support the bill with amendments.

Heebner also noted her concerns with the revenue split, voting system and potential cost increases from the labor agreements.

“Fifty percent of the money goes to the city directly and 50% to the region,” Heebner said. “I have a problem with that. I can get behind a weighted vote for transportation, but when it comes to land use, I have a real problem with that.”

In a letter to Hueso, Carlsbad Mayor Matt Hall wrote in opposition to the proposed new agency, noting the redundancy of creating another entity with nearly the same authority as SANDAG or the County Board of Supervisors.

Hall also expressed concerns that taxes to the agency from Carlsbad residents won’t guarantee housing in the city and whether the housing produced would count toward municipal obligations under Regional Housing Needs Assessment.

The Carlsbad City Council’s legislative subcommittee opposes the bill in its totality, as the new agency would have no accountability. Hall said the bill establishes a complex set of requirements regarding how funding is spent and eligibility conditions, and there is no guarantee of local reimbursement or offsetting benefits.

Hall also cited an analysis by the Assembly Housing and Community Development Committee questioning whether the proposed regional housing agency would succeed. The committee highlighted critical issues in the proposal, such as creating a governing body with nearly duplicate powers like other regional authorities, the complexity of expenditure requirements, and the degree of “local buy-in” around the proposed agency.

Also, the report concludes that the first opportunity for San Diego Regional Equitable and Environmentally Friendly Affordable Housing Agency to raise revenue would not be until the 2024 general election.

“The Legislative Subcommittee (sic) raised concerns about the State’s (sic) proposal to establish a locally redundant and costly bureaucracy that would operate without direct accountability to the voters of San Diego County,” Hall’s letter reads.

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