New research shows that nearly four-in-ten San Diegans live in households that spend more than 30% of their income on housing. That’s more than 1.2 million people. And nearly two-in-ten spent 50% of their income on housing — that’s more than 550,000 people. This is unsustainable — especially at a time when the cost of what feels like everything else is higher than it used to be.
This new study from the San Diego Foundation adds urgency to the housing affordability problem that many of us have seen firsthand. San Diego isn’t alone, of course, millions of Americans are struggling to find affordable homes.
Housing affordability here and across the country is at a crisis point and policymakers are looking for ways to right the ship. Here in San Diego, those of us who are involved in the community see policymakers rolling up their sleeves and coming up with local solutions. That’s what we need.
Concerning, however, is a new federal policy proposal that could actually worsen the crisis. The Federal Housing Finance Agency oversees the entities that backstop the loans currently supporting more than four million apartments nationwide. FHFA is considering imposing government price controls on all apartments backed by these loans. This is a form of nationwide rent control — a policy that seems like it might keep out-of-control housing costs in check, but in reality serves to benefit a few while depressing the development of new housing.
Federal rent control would have a destabilizing impact on America’s housing market and capital markets more broadly. You don’t need to be a housing policy expert to realize that we actually need to increase housing supply in order to actually help those who need affordable places to live.
On the surface, rent control seems like a straightforward way to keep housing costs in check. FHFA’s leaders hope that by simply capping rent increases, they can keep housing costs manageable for America’s working-class families. The reality, however, is much more complicated.
That’s because most studies show that rent control discourages new housing construction and hampers housing providers’ ability to invest in upkeep and improvements to their existing properties. Reducing the quantity and quality of available rental housing isn’t a productive path toward easing the burden for the million San Diegans who spend a third of their income on housing.
Rent control provides stability for some while keeping housing out of reach from those who need it the most. This is inequitable, and as is often the case, the benefits of this inequity flow toward white Americans. We see this in San Diego, as the San Diego Foundation also found that the burden of high-cost housing is not equal across the city. Black and Latino San Diegans are much more likely than whites to spend more than 30% — or even 50% — of their income on housing.
California has voted to reject rent control numerous times by wide majorities. In 2018 and again in 2020, ballot measures aimed at statewide rent control failed by 20%. Backers want to try again in 2024. Why would we then support this from the federal government? California Sen. Alex Padilla should know this and yet he encouraged FHFA to proceed.
Rent control worsens the root cause the housing affordability — the lack of supply. San Diego needs to build more than 2,000 apartments annually to keep pace with demand. We need policymakers to make it easier to meet the needs of our community. We can end the supply gap and make more affordable housing, but broad, government-mandated, one-size-fits-all controls won’t do it. I know this because my company builds apartment homes from Temecula to El Cajon and from San Diego to Chula Vista.
Fixes like zoning reform and investments in affordable housing for those who need it would help. As would clearing roadblocks for builders to finance the construction of new homes and apartments, which is the actual, well-intentioned goal of the FHFA policy.
Padilla’s goals and those of FHFA are spot on: ending the housing affordability crisis. But we need solutions that work. Our neighbors are counting on us.
Rick Snyder is President of R.A. Snyder Properties, a housing development and property management company based in San Diego. He is past president of the California Association of Realtors and 2024 chair of the the National Apartment Association.