SB10 will increase density in local neighborhoods

San Diego is in a housing crisis.

There are very few new construction developments due to a lack of land and the difficulty and high expense of obtaining construction permits. I have a friend who is a general contractor and purchased 10 lots in Escondido back in 2009 in a bank foreclosure but still hasn’t built anything due to the complexity and cost of it all. He told me it could take up to three years from start to finish to complete the project and he can’t fund or risk that requirement.

People continue to move to San Diego, with many international people as well as tech workers attracted to this city and the companies that move here.

Last year, Sacramento passed SB10, a controversial legislation that allows up to 10-unit structures almost anywhere within a mile of a trolley stop, high volume bus terminal, as well as job density and educational areas. Because the law was fairly aggressive, Sacramento made it optional for cities to adopt. But San Diego city mayor Todd Gloria is now pushing to make this proposal a permanent part of San Diego policy.

Looking at a trolley map, I find quite a few traditional neighborhoods that would likely be affected.

Obviously, the College Area would see continued building of increased density as that area is already undergoing significant expansion with quite a few cranes currently in the area constructing large apartment buildings. Interestingly, hedge fund money is fueling some of it. When you look at tree-lined neighborhoods surrounding SDSU, south Del Cerro, the Mission Gorge area, Mission Valley area, the entire Mission Hills area, parts of Hillcrest, south Linda Vista, and completely surrounding USD and UCSD La Jolla, you see all these neighborhoods could be open territory for building apartment buildings directly in single family neighborhoods.

The details of SB10 are that one unit is allowed per 1,000 square feet of lot size. So, you would need almost a quarter acre lot to build the 10 units. And a smaller lot size of around an 1/8 of an acre could get 5 or 6-unit structures. There would be no stopping this if the proposal passes. Structures up to three stories high would be built in single-family neighborhoods over the coming years. It is believed that nearly half the city neighborhoods would qualify for this proposal.

There is a very high-end neighborhood next to UCSD called La Jolla Farms with large lots and multimillion dollar homes, many with ocean views. Three story apartment buildings could likely be built in this neighborhood as the proximity to UCSD would allow for high rents of maybe $3,000 to $5,000 per unit. I’m not sure residents of that area are fully aware of the ramifications of the new proposal as well as the residents of beautiful south Del Cerro or the west College Area. Mission Hills is a gorgeous area with tree-lined streets and older homes with pride of ownership. These areas may be subject to significant transformation in the coming years.

Additionally, parking requirements for the new structures would be rolled back or eliminated entirely, which would greatly increase street parking density in these areas.

MARKET REPORT (Single Family): College Area (92115): median price down 1% month over month to $937,500 and with 34 homes for sale (up 21%). San Carlos (92119): median price down 1% to $946,000 and with only 5 homes for sale. Del Cerro/Allied Gardens (92120): median price up 2% month over month to $1,041,750 and with only 2 homes for sale. Most homes sell within 30 days.