1. 2015 California Association of Realtors Government Affairs Directors Institute Study prepared by Fermanian Business & Economic Institute Point Loma Nazarene University Lynn Reaser, Ph.D. The Fermanian Business & Economic Institute – business & economics in action © FBEI 2014 Opening San Diego’s Door to Lower Housing Costs

2. The Fermanian Business & Economic Institute – business & economics in action © FBEI 2014 Topics  Scope  Key Findings  Economic Impact  Policy Recommendations  Scope  Key Findings  Economic Impact  Policy Recommendations

3. Housing Production

4. 233,000 San Diego Households Priced Out of the Market Percent

5. Households Priced Out of San Diego Housing Percent

6. Sales Throughout the County Percent The Fermanian Business & Economic Institute – business & economics in action © FBEI 2014

7. Regulatory Costs  Entitlement  Mapping  Eliminated units  Fees  Affordable housing  Vertical costs  Time costs  Entitlement  Mapping  Eliminated units  Fees  Affordable housing  Vertical costs  Time costs

8. The Fermanian Business & Economic Institute – business & economics in action © FBEI 2014 Key Findings

9. Regulatory Costs Drive 40% of Average New Housing Costs in San Diego County Thousands of dollars *Weighted by total units rented or sold in 2013 The Fermanian Business & Economic Institute – business & economics in action © FBEI 2014

10. Regulatory Costs Significant Share of Housing Prices in all San Diego Jurisdictions * Percent *Weighted average based on total sales and rentals The Fermanian Business & Economic Institute – business & economics in action © FBEI 2014

11. Regulatory Gauntlet Local Government Departments Planning Department Long Range/ Advanced Planning Department Engineering Department Land Development Department Landscaping Department Grading Department Geology Review Department Public Works Department General Services Department Stormwater Compliance Department Fire Department Parks & Recreation Department Transportation / Traffic Department Public Health Department Utilities Department Water Department Library Department School Impact Mitigation Department Facilities Financing Department Police Department Crime Prevention Review Department Airport Land Use Staff / Commission Environmental Department MSCP Review Department Economic Development/ Redevelopment Department Subdivision/ Map Check Review Department Franchise Utility Reviews (SDGE, Cox, Time Warner, SBC, etc.) City Attorney Building Inspection Code Enforcement Planning Commission City Clerk City Council Hearing Officer Reviews Design Review Boards Housing Commission Historical Commissions/ Review Boards Community Planning Groups Community Planning Group New Project Subcommittees Community Sponsor Groups State/Federal Agencies Palomar Observatory Department of Fish & Game U.S. Fish & Wildlife Army Corps of Engineers San Diego Regional Water Quality Control Board California State Coastal Commission Bureau of Indian Affairs FEMA Bureau of Real Estate US Department of Housing and Urban Development California Environmental Protection Agency Federal Aviation Administration/ Airports Department MCAS Miramar NGO’s Endangered Habitats League Coastkeeper Sierra Club

12. Regional Distribution of Economic Benefits from 3% Easing of Regulatory Impact IncreasePercent Gross Regional Product, $ mil$3.151.7% Personal Income, $ mil$2.541.5% Employment 37,3311.9% Business Enterprises 1,3721.7% Population 18,2220.6% Housing Permits 6,74975% The Fermanian Business & Economic Institute – business & economics in action © FBEI 2014

13. Policy Recommendations

14. The Fermanian Business & Economic Institute – business & economics in action © FBEI 2014 Policy Recommendations  Entitlements  Set benchmarks for project approval times  Establish master plans  Prevent legal challenges after tentative or final map  Entitlements  Set benchmarks for project approval times  Establish master plans  Prevent legal challenges after tentative or final map

15. The Fermanian Business & Economic Institute – business & economics in action © FBEI 2014 Policy Recommendations  Mapping  Replace deposit account with flat fee  Allow communication with builder/developer  Grandfather all phases of project  Set “No Late Hits” policy  Mapping  Replace deposit account with flat fee  Allow communication with builder/developer  Grandfather all phases of project  Set “No Late Hits” policy

16. The Fermanian Business & Economic Institute – business & economics in action © FBEI 2014 Policy Recommendations  Land Development and Building  Standardize building codes across County  Establish “one-stop” shops for permits  Standardize Title 24 requirements across building phases  Land Development and Building  Standardize building codes across County  Establish “one-stop” shops for permits  Standardize Title 24 requirements across building phases

17. The Fermanian Business & Economic Institute – business & economics in action © FBEI 2014 Policy Recommendations  Affordable Housing  Implement sliding scale  Allow inclusionary and density bonus units off-site  Contribute or sell city land  Affordable Housing  Implement sliding scale  Allow inclusionary and density bonus units off-site  Contribute or sell city land

18. The Fermanian Business & Economic Institute – business & economics in action © FBEI 2014 Climate for Change  Mayor Faulconer  Council  Speaker Atkins  California Treasurer, John Chiang  Mayor Faulconer  Council  Speaker Atkins  California Treasurer, John Chiang

19. Other Findings

20. Regulations, Delays Add 40% to Housing Costs, Study Finds RIP Entry Level Housing Economist Hits High Cost of Permitting Harsh Reality for Young Homebuyers Renters Pay Up As Homeownership Drops Layers Of Government Regulation Explain Area High Housing Costs 13 Cities Where Millennials Can’t Afford A Home High Housing Costs Driving More Californians Into Poverty Borre Winckel Borre Winckel President & CEO President & CEO San Diego Building Industry Association San Diego Building Industry Association Dan Walters: California has big housing shortage

21. Housing You Matters Coalition HousingYouMatters.org Mission: Advocate for regulatory reforms that result in the timely production of a wide range of attainable housing in all economic sectors necessary to meet regional needs and ensure economic prosperity.

22. QUESTIONS