Nov. 6 2013 08:58 AM

City struggles with how to house working-class families

At a rally outside of City Hall on Monday, City Councilmember and mayoral candidate David Alvarez calls for investment in affordable housing.
Photo by Joshua Emerson Smith

Minutes before Monday's City Council meeting, mayoral candidate and Councilmember David Alvarez addressed a crowd of low-income residents and housing advocates outside of City Hall.

"Unfortunately, and just like we've seen over the past several years, the usual crowd of Downtown special interests are trying to get in the way of supporting working families," Alvarez said.

Later that afternoon, the City Council was set to consider increasing a development fee that helps subsidize low-income housing. The city halved the so-called "linkage fee" in 1996 and refused to increase it for more than a decade. Now, a proposal to raise it was drawing vociferous opposition.

At the council hearing, Councilmember Kevin Faulconer, who's also running for mayor, claimed that the fee that working-class families were demanding would actually hurt them in the long run.

"The best way that we could connect people to affordable housing opportunities is to create good-quality jobs in the city of San Diego," he said. "This proposal will have the exact opposite effect."

For hours, scores of citizens spoke passionately before the council both in favor and in opposition to the proposed hike. In the end, the council voted for a gradual fee increase over the next three years, potentially bringing in dozens of new units of affordable housing every year.

While the debate was heated and contentious, the idea that San Diego is becoming increasingly unaffordable for a sizable percentage of its citizens was taken for granted. Even the most vocal opponents of the fee never questioned the basic assumption.

"There's an understanding that we need affordable housing in this city," City Councilmember Mark Kersey said during the meeting before voting against the fee increase. "There's no question about that."

As home prices and the cost of renting continue to climb, working-class families are struggling to keep pace, and many are slipping into poverty. However, the reality may be harsher than many people realize.

In San Diego County, more than one in five residents, or about 23 percent of the population, lived in poverty in 2011, according to a first-of-its-kind study released in October by the Public Policy Institute of California.

The report—which factored in a variety of living costs, including filling up the gas tank on the way to work, putting food on the table and hospital visits—stands in stark contrast to the federal poverty measure, which estimates that only 15 percent of county residents live in poverty.

"It's sobering that when you comprehensively measure resources, more Californians are poorer than we thought," said Sarah Bohn, PPIC economist and coauthor of the report, called "The California Poverty Measure: A New Look at the Social Safety Net."

The study, which examined the largest counties in the state, found that, in San Diego, a family of four making less than $31,307 a year struggles dramatically to secure basic necessities, with the affordability of housing being the most significant cost.

In neighboring Imperial County, where the cost of housing is much lower, the report puts the poverty threshold at $23,236 a year—on par with the official federal poverty line for a four-person family of $23,550.

"You can be a working person in San Diego and not even be able to meet basic living expenses," said Susan Riggs, executive director of the San Diego Housing Federation. "The trend is that we have higher poverty than in the past. It's a combination of a lot of low-wage jobs and a high cost of living."

The basic idea behind the linkage fee is to subsidize affordable housing development by charging non-residential development, such as hotels and office space, that create low-wage jobs.

The need for low-income housing is a "valid issue," said Felipe Monroig, president of the San Diego County Taxpayers Association, which opposed the linkage-fee increase.

"The question is not about affordable housing," he said; "the question is whether the funding mechanism that they are proposing is a good funding source or not."

While many in the businesses community have continually blasted the fee as a job killer since it was first instituted in 1990, the systemic economic impacts of growing poverty have rarely been part of the debate.

"We really don't deal with that larger issue," Monroig said in response to questions about the impact of poverty on city taxpayers.

Advocates like Riggs argue that affordable housing helps families become productive members of society and contribute to the local economy.

"If people are spending 70 percent of their income on rent, they're not going to the movies or going out to a local restaurant," she said. "It's shown time and time again. The most economically prosperous communities are the ones with the most equitable conditions."

That was the case for the "Jones" family, who asked that we not identify them for fear of professional repercussions.

In 2010, Daniel Jones, his wife and three children were living in a three bedroom home in Lemon Grove. In hopes of advancement, Daniel's wife went back to school to become a nurse. Daniel, who works as a janitor on a university campus, took a second job to pay the family's roughly $1,600-a-month rent.

With Daniel working 12 hours a day and bringing in about $35,000 a year, the family of five survived on an income just over PPIC's poverty threshold. However, while trying to better their economic standing through education, the family was often forced to endure hunger and the threat of homelessness.

"It was a lot of struggle trying to feed the family and pay the rent at the same time," said Daniel, 53. "The rent was eating deep into our pocket. It was hard for us. I have to be honest, it was really hard."

At one point, the family started using a credit card to help pay the rent, a move they knew was unsustainable.

"They were doing the best they could," said Julie, Daniel's 16-year-old daughter. "But it did make me a little bit scared that at some point, we may not be able to afford the rent because I overheard some of their conversations."

In such situations, many families lose control of their finances and get buried in debt due to unexpected medical bills or a hefty car repair, said Joni Halpern, formerly the executive director of Supportive Parents Information Network.

"It's like they're on a brittle platform," said the lawyer, who helps low-income families secure housing. "One little thing goes wrong and they crash down through that gap in a heck of a hurry. And we see them again in the food lines or bankruptcy court or applying for some sort of aid."

However, the Joneses didn't spiral into debt or poverty. About 18 months ago, they were able to get into an affordable-housing development, which brought the rent down to $1,050.

The extra few hundred dollars a month changed the whole mood of the house, Julie said. "I feel more at ease because I know things are stable. Now we can actually go out and actually buy a few things for the fridge."

Since then, they've been able to pay down a large portion of the credit-card debt, Daniel said, adding that they're hoping to one day own a home in San Diego. "We're trying. We're not where we want to be. But it's a gradual step."

Believing the linkage-fee increase will give more people like the Joneses a chance to get ahead, Riggs praised the City Council's decision.

"I think this marks a turning point where we are making efforts to reverse the inequity in our communities," she said. "We've seen a trend from 1990s; the vast majority of jobs that are being created are low-wage jobs, and that's not sustainable without low-wage housing."

However, most advocates say the fee is by no means a panacea for ending poverty.

"Our development patterns have favored single-family homes," Riggs said. "We're starting to trend back to multifamily a little bit. But we have such a shortage, it's going to be very difficult to dig ourself out of that hole."

By the end of the decade, more than 40 percent of all new home construction in the city will need be low- or very-low-income units in order to meet demand, according to a study by the San Diego County Association of Governments (SANDAG). To a large extent, that's due to the significant role that low-wage workers play in San Diego's economy. Roughly 125,000 employees in the city earn poverty-level wages, with the largest employment sector, entertainment and hospitality, providing the lowest average wage, at $21,800 a year, according to SANDAG.

City Councilmember Sherri Lightner supported the linkage fee and said the city needs to increase its efforts to provide affordable housing or be faced with negative economic impacts.

"We can't keep doing nothing and hoping the problem suddenly goes away," she said. "In fact, the gap between wages and housing affordability continues to widen, and this will become a big drag on our economy, which could cause major employers to relocate to cities where workforce housing is abundant and affordable."

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