10.17.2024
by Tony Manolatos
"San Diego has been one of the most progressive places in the country to try and get more housing built and the mayor has been a big part of that.”
That was a comment AVRP CEO Doug Austin, FAIA, made Thursday, Oct. 10 as a member of a panel discussing San Diego’s residential and commercial markets hosted by BISNOW in Sorrento Valley, San Diego’s hub for high tech, biotech and scientific research.
The panel was called, “San Diego Market Outlook: Trends Impacting Decision Making, Opportunities Driving Growth, Financing & Investing.” More than 200 people attended. Panelists said that despite positive steps to help alleviate the region’s housing crisis, more is needed.
“We’re bragging about building 10,000 units a year, up from 5,000, but we need at least 15,000 a year to meet the housing needs across our region,” Austin told the crowd. “We’re not catching up, we’re falling further and further behind. The problem is the projects that are being built are subsidized or at the higher end, so the people in the middle are getting squeezed out of the market. It’s why we’re working very hard on solutions to create housing middle-income earners can afford.”
San Diego remains a desirable place to live and work because of the sun, surf, and our strong economy.
“We all have concerns but at the end of the day we see the value in the market here in San Diego,” said moderator Kyle Yantz of CohnReznick LLP.
“Interest rates and regulations top the list of concerns the panelists say they have.
“Everyone is looking for stability,” said panelist Hunter Combs of Walker & Dunlop.
“San Diego is a very pro-development city, so the concern I have is interest rates,” said Jon Fleming of Paramount Property Tax Appeal.
Austin added: “Costs and cost surprises that go in the wrong direction are what concerns me,” he said.
“We have a lot of confidence in the San Diego economy. The region is pro-development and pro-business. Our biggest concerns are getting through the presidential election and seeing who the new administration is and how that impacts things,” said Jay Matthes of Capstone Advisors.
Austin and members of his team at AVRP, he told the crowd, are focused on creating a regulatory environment that spurs development of affordable and market rate housing. It’s why he is working with lawmakers in Sacramento to reduce the impacts of condo construction defect litigation, “which has effectively removed this once more affordable option for buyers from the market,” he said.
Less than 3 percent of the recently built attached housing is for sale, Austin noted. This compares to closer to 40 percent or more in places other than California.
“There is close to 100% chance of a condo project being involved in litigation within the first 10 years of being built. No other building type comes close to that percent,” he said.
“Austin also pointed out that privately-funded developments are more affordable and reach the market quicker. “We are building 1-bedroom units for around 250,000 per unit instead of 425,000 when the government is involved, which increases costs” he said.
Tony Manolatos is a public affairs specialist based in San Diego, and AVRP Studios is one of his clients.
About AVRP Studios: In recent years, AVRP Studios has completed numerous educational projects in Southern California County including both public and private projects, from Elementary through Higher Education. Celebrating 45+ years of creativity and achievements, the firm and its principals have earned more than 150 design awards, including multiple Gold Nugget Grand Awards from PCBC, a list that includes Grand Awards in 2023 and 2022. AVRP originated in 1976, when Doug Austin began a small design firm out of his home. Today, the firm has designed numerous iconic projects both domestically and internationally. The firm’s project types include urban infill, mixed-use, housing, education, corporate office, multigenerational space, healthcare and more. The firm is led by three principals: Douglas H. Austin, FAIA, LEED AP, MAIBC; Christopher T. Veum, AAIA, IIDA; and Randy Robbins, AIA, LEED AP.