San Diego Adopts Plan to Add Nearly 40,000 Homes in Two Key Communities
The San Diego City Council approved the University Community Plan Update and the Hillcrest Focused Plan Amendment to the Uptown Community Plan. The plans identify improvements to streets for people to walk, bike and take transit, as well as improvements to parks for people to play and socialize. Both plans focus on providing opportunities for a variety of new homes for people of all incomes over the next 30 years and beyond within areas of the city that have a higher level of resources and access to high-paying jobs and transit. The University Community Plan Update provides opportunities for up to nearly 29,000 new homes. The updated plan reinforces the community’s role as a major employment center and adds up to 72,000 additional jobs across various sectors, including office, retail, scientific research, technology institutions and health care. The Hillcrest Focused Plan Amendment provides opportunities for up to 17,200 additional homes. The plans are consistent with the Blueprint SD initiative which was adopted by the City Council last week.
Newsom Directs State Agencies to Develop Infill Housing Plan
Governor Gavin Newsom issued an executive order to support efforts to transform undeveloped and underutilized infill sites and buildings into housing. The order will help communities build thriving downtown cores, and new housing near transportation hubs and job centers. The order directs state agencies including the Governor’s Office of Land Use and Climate Innovation, California Department of Housing and Community Development, California State Transportation Agency, and the California Air Resources Board, among others, to work together to address the need to develop more housing through several tactics: 1) lowering costs and increasing flexibility by exploring updates to the state building standards codes and permitting processes to accelerate housing approvals and development; 2) creating more resources for local governments to build housing through infill development, by developing mechanisms to provide local governments and developers with a range of additional resources, including state and federal infrastructure dollars and other financing; 3) building more tools and opportunities by publishing resources and guidance, including through the states’ existing Site Check website; 4) aligning state housing and climate goals by creating tools to assess the environmental benefits of thriving urban cores and transportation centers, and working to better align housing and transportation investments across the state. (See related CP&DR coverage.)
Bay Area to Vote on $20 Billion Housing Bond Measure
By a vote of the ABAG board, the Bay Area Housing Finance Authority (BAHFA) will place a $20 billion general obligation bond measure on the November 5 general election ballot across all Bay Area counties in an effort to produce and preserve affordable housing in the area. The measure requires two-thirds voter approval unless ACA 1 passes, which would lower the threshold to 55%. The bond measure allocates 80% of funds to counties and specific cities for housing needs. The remaining 20 percent, or $4 billion, would be used by BAHFA to establish a new regional program to fund affordable housing construction and preservation projects throughout the Bay Area; almost one-third of funds may be used for the production or preservation of affordable housing, or for housing-related uses such as infrastructure needed to support new housing.
100,000 Homes Dropped by Insurance Companies over Five Years
According to a San Francisco Chronicle analysis, more than 100,000 California homeowners have lost their property insurance over the past five years, largely due to wildfire risk. Areas with dense forests and open grasslands, such as Santa Cruz County, where nearly 8,500 policies were non-renewed, and San Bernardino County, with over 9,800 non-renewals, are among the most affected. The 94563 ZIP code in Orinda experienced the most non-renewals which totaled at 2,220 and was heavily impacted by State Farm’s decision to now renew 30,000 policies. Although Insurance Commissioner Ricardo Lara has sought Governor Newsom’s support and has proposed the Sustainable Insurance Strategy, which may lead to initially higher premiums but could eventually result in greater affordability, California residents remain vulnerable in the meantime. (See related CP&DR coverage.)
Study Looks at Externalities of Developing Market-Rate Housing
Recent research, based on data from California, indicates that new market-rate housing construction can modestly alleviate rent pressures in neighborhoods, but its effectiveness in reducing displacement and exclusion varies considerably. Authored by Karen Chapple and Taesoo Song, "Can New Housing Supply Mitigate Displacement and Exclusion?" used household-level data to reveal that building a minimum of 100 market-rate units in Los Angeles somewhat eased displacement and exclusion pressures for low-income households, while also encouraging migration to less competitive areas in San Francisco. However, in highly sought-after segments of both cities, market-rate developments often fail to attract low-income residents and can even contribute to increased out-migration. In contrast, subsidized housing projects generally exhibit greater success in mitigating displacement and exclusion across diverse markets. The research underscores that socioeconomic factors fundamentally influence displacement, with new construction alone having limited impact unless coupled with demolition. Thus, addressing these multifaceted challenges necessitates comprehensive policy interventions at state and federal levels to address systemic housing access disparities related to race, gender and income.
CP&DR Coverage: Insurers' Woes May Lead to Less Housing Development
Recently, property insurers in California have curtailed the number of types of policies that are willing to write in parts of the state determined to be prone to wildfires—and to the potentially massive property loses that they can cause, especially when research indicates that climate change has exacerbated frequency and severity of wildfires. At least seven major insurers—State Farm, Allstate, Farmers, USAA, Travelers, Nationwide and Chubb— have reduced their coverage in California, especially in rural areas and the urban fringe. Even though the insurance trend may inadvertently support the state’s goal of limiting development in areas of high fire danger, it could undermine efforts of exurban and semi-rural counties to meet their housing targets under the Regional Housing Needs Allocation system. Rural counties have low RHNA targets but exurban counties on the metropolitan fringe– many of which are located in high fire risk areas – have higher numbers.
Quick Hits & Updates
Los Angeles City Planning’s Office of Historic Resources (OHR) was recently awarded a $500,000 grant from the Humanities in Place program of the Andrew W. Mellon Foundation. The grant supports HistoricPlacesLA Revealed, a citywide system of up to 200 historic markers in public spaces throughout the city.
California awarded $94 million in infill infrastructure grants to 25 projects that will support the development of 1,661 new homes in 15 California counties. The grants awarded today through the state’s Infill Infrastructure Grant Program will support capital improvement projects in the following California counties with populations of less than 250,000 people: Butte, Colusa, Del Norte, El Dorado, Humboldt, Kings, Imperial, Madera, San Benito, Shasta, Sutter, Tehama, Tuolumne, Yolo, and Yuba.
Apple and Silicon Valley billionaire John Sobrato jointly launched a $50 million Bay Area Housing Innovation Fund in collaboration with nonprofits San Francisco Housing Accelerator Fund and Destination: Home, aiming to streamline affordable housing construction with 40% cost savings and faster build times. The fund’s inaugural project will provide 145 senior housing units at 1633 Valencia St., with future developments planned in Santa Cruz and other Bay Area counties, focusing on projects that meet strict cost and timeline criteria.
A recent study by Hilgard Analytics and Zenith Economics reveals that residential permitting in Los Angeles has declined significantly, with 5,208 units permitted in the first half of 2024, marking an 18.9% decrease compared to the same period last year. Despite an increase in Executive Directive 1 (ED1) affordable housing approvals, only 588 units were permitted citywide in early 2024, suggesting ongoing challenges in addressing the city's housing shortage amidst persistent economic and policy obstacles. (See related CP&DR coverage.)
The $6.2 million Stadium Wetland Mitigation project along the San Diego River has been named the 2024 Project of the Year by the American Public Works Association. The project restored a 57-acre area near Snapdragon Stadium by tackling severe pollution, including the removal of 98 tons of trash, eliminating over 30 acres of invasive plants, and addressing issues with homeless encampments.
The High Desert Corridor High-Speed Rail Project secured a labor agreement with key unions. The project is set to create 17,000 jobs while generating $12 billion in economic activity. Spanning 54 miles, the rail line will connect Antelope Valley and Victor Valley, eventually linking Southern California with Northern California and Las Vegas via Brightline West and the high speed rail system. (See related CP&DR coverage.)
On November 5, San Diego residents will vote on whether to approve a 1-cent sales tax increase, raising the rate to 8.75 percent and generating an estimated $400 million annually. This measure aims to address the city’s $1.9 billion infrastructure backlog and budget deficits. Proponents argue that the tax is crucial for repairing and maintaining essential services and infrastructure, while opponents worry about the potential misallocation of funds and lack of restrictions. Despite mixed polling results, city officials felt the vote was crucial in addition to a countywide half-cent sales tax increase.
Los Angeles has experienced a significant rise in the number of drivers commuting over 35 miles from their houses to their offices since the pandemic. New research by Stanford Professor Nick Bloom and Alex Finan, a Data Analyst at Inrix, examines commuting distance for work before and after the pandemic across major U.S. cities. The study found that those traveling over 75 miles each way daily increased by 20%, while those commuting 40-44 miles increased by approximately 46%.
