You know what they say: location, location, location.
That term is a house hunting must that at one point or another, every Coronado resident successfully marked off their checklist while searching for a dream home.
As anyone who has braved the tough housing market knows, that list is full of give and takes, pros and cons, and compromises. For many locals, they made the choice to spend a hefty price in exchange for a spot that promises a good lifestyle. And let’s be honest, the numbers are steep.
As of Sept. 2, there were 140 homes for sale in Coronado, ranging from $899,000 to $37.5 million, with a median listing price of $2.9 million, according to Realtor.com. To rent a one-bedroom apartment, Zillow reports a range of $1,650 to $12,000, with an average price of $4,579 per month. Zillow also records that rent in Coronado is 89% higher than in San Diego, where the average price for a one-bedroom is $2,424.
It’s no secret that housing options – especially affordable ones – are getting harder to come by.
So put that scene up against a nationwide affordable housing crisis, and you’ll wonder how low-income housing even stands a chance.
At this moment, there are a number of properties in the community slated as affordable housing options, with rent capped at below-market rates according to different income categories per San Diego County’s median income metrics. The city’s website lists 12 properties (with varying unit openings) set aside for lower-income tenants.
To try to bring more options to the table, Coronado city leaders recently passed an increased in-lieu fee. Developers of multi-family complexes are required to pay this fee when they choose not to cap rents at below-market rates for 20% of their units. The goal? For the city to use this money to fund future low-income projects.
The fee has stayed at a flat rate of $7,000 per unit since 1993. Even after 30-plus years, the city has collected a measly $1.7 million. Really?
The new fee is set at $25 per square foot, with $10 increases each year until 2029 (making it a $55 fee per square foot four years from now). To understand that comparison better, by 2029, it will cost around an additional $113,000 in fees for a 2,054 square-foot dwelling.
The increase looks good on paper, as it contributes to the end goal of putting more money in the affordable housing bucket. But it begs the question, will builders take the bait?
Arguably, developers would choose instead to build a single-family home, instead of a 2-4 unit project, to avoid dropping huge sums of money on development fees. That would leave the city in exactly the same spot – with more market-rate single family homes and no additional affordable units.
On top of that, the projects would not be contributing money to the city’s affordable housing fund since the fee only applies to multi-family developments.
The fee increase could be counterproductive to actually producing more units at reduced costs.
In a fight between two developers – one who’s paying more money to help the affordable housing crisis and one who’s finding a loophole to reduce costs – my money’s on the latter.
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