To make the housing construction process more efficient and housing more affordable, San Diego should consider returning to a “Council-Manager” system of governance and doing away with the current “strong mayor” system. This change could streamline city operations through professional management, which is something the city badly needs.
San Diego faces a severe housing shortage, estimated to be about 90,000 homes short of meeting the region’s demand, according to Ray Major, chief economist for the San Diego Association of Governments. This gap in housing supply is occurring because the region is not keeping up with job and population growth.
According to the city’s 2023 Housing Report, San Diego will need to triple its current rate of homebuilding to meet the state’s annual housing needs. Interestingly, the decline in homebuilding began around 2006, coinciding with the city’s transition from a “council-manager” to a “strong mayor” system.
San Diego is the only city in the region with a strong mayor-led system of government. The other 17 cities in the county have council-mayor systems, where a city council typically appoints a mayor who oversees government operations.
San Diego moved to a strong-mayor system on January 1, 2006, through voter-approved changes. The change was part of a five-year trial period. The system was made permanent in June 2010 after San Diego voters approved Proposition D, establishing a strong-mayor system beyond the trial period.
A “strong mayor” type of government means that the mayor also serves as the city’s chief executive officer and has significant executive and executive powers, including veto power over council decisions and control over the city’s budget and staff. In a “council-manager” type of government system, the mayor typically serves a role similar to that of a council member and may have additional powers, such as ceremonial duties and presiding over council meetings and other official events. It’s clear that our current system of government isn’t working when it comes to making housing and rental affordability in San Diego.
Since the change in administration, San Diego has been unable to keep up with the demand for housing. Building permit fees have skyrocketed, making it nearly impossible to build affordable housing. High permit fees are just one factor that makes construction costs astronomical. Other factors, such as inflation, labor costs, and rising building material prices, are also significant factors that are driving up the price of building new homes.
Governments have little to no control over these matters, but local authorities have the ability to control regulatory costs, which account for 34% and 51% of the average cost of building a home.
San Diego has increased developer fees in an effort to speed up approvals for new housing and other projects. The increases are to pay for additional city staff, new technology and other initiatives. The changes mean permit fees for a 500-square-foot ADU go up from $1,484 to $2,885. For a 3,000-square-foot home, the fee went up from $4,925 to $6,640.
The new fee structure would also be changed to an hourly rate, with the city charging applicants $145 per hour for staff time. While this fee may speed up the permit process, it will do little to make housing more affordable.
There is no single solution to address San Diego’s housing affordability and rent crisis, and it will likely require a multifaceted approach to increase the number and affordability of housing. Therefore, we need to encourage elected officials to take another look at how San Diego’s current government operates and consider returning to a council-mayor system of governance, as a strong mayor system has not delivered the desired results. With the right expert oversight, the mayor could streamline the building permit process, for example using AI technology, or privatize building permits to speed up the process, as Arizona has done.
The role of Mayor should be that of a visionary leader, someone who thinks outside the box and is not afraid to take risks to achieve San Diego’s housing goals. The Mayor’s goal is to realize the Mayor’s vision in a cost-effective manner. Having a professional Mayor overseeing and running government operations can lead to greater efficiency in local government and make housing more affordable in San Diego.
Mark Powell is a California licensed real estate broker and former vice president of the San Diego County Board of Education.
