The real reasons San Deigo has no more money to give out for housing vouchers? First, the mismanagement of the current program—including the growth of homeless and policies that kill new housing. Second, the people have decided they no longer want to bankrupt themselves so special interests can make a killing. The more government spends on homeless and affordable housing, the more we have homeless and less affordable housing. But the rich continue to get rich.
City’s Housing Agency Won’t Issue Vouchers for New Housing Projects
The San Diego Housing Commission has decided it no longer has the resources to dole out vouchers to specific low-income housing projects, a move expected to slow the pace of new homeless housing.
by Lisa Halverstadt, Voice of San Diego, 1/2/25 https://voiceofsandiego.org/2025/01/02/citys-housing-agency-wont-issue-vouchers-for-new-housing-projects/
The city’s housing agency has decided it must shut off a key engine it has used to help deliver thousands of homes for homeless and low-income San Diegans.
The San Diego Housing Commission’s decision presents a new hurdle for developers – including those behind the Midway Rising project – who counted on access to those vouchers to build homes for the city’s poorest residents. The change could have reverberations on housing production for especially vulnerable San Diegans for years to come.
For years, the Housing Commission has annually doled out dozens of Section 8 vouchers that developers attach to specific projects to subsidize rents from tenants with minimal incomes.
Now, facing insufficient federal dollars to cover existing voucher commitments and uncertainty about future resources, the housing agency has decided it can’t issue project-based vouchers for several years.
“We don’t have vouchers to address new needs right now,” Housing Commission CEO Lisa Jones said.
The Housing Commission has seen its voucher-related costs rise along with voucher-holders’ rents – and federal dollars aren’t keeping up. The agency reports it received $275.4 million from the federal Department of Housing and Urban Development last fiscal year for rental assistance but spent $282.3 million covering rental bills.
That mismatch and a commitment to keep handing out project-based vouchers has meant the city’s housing agency hasn’t pulled families from its tenant-based Section 8 voucher waiting list for more than two years.
The Housing Commission isn’t expecting to receive more voucher funding from HUD that could turn the dial anytime soon.
Now the Housing Commission has decided it also must pause voucher offerings that have helped more than double the city’s supply of supportive housing units for formerly homeless people over the last five years.
That’s difficult news for housing developers including the team behind Midway Rising, which had expected to use 200 project-based vouchers to help finance some of the planned 2,000 affordable units in the city-backed Sports Arena redevelopment.
Committed project-based vouchers subsidize the limited and sometimes nonexistent rents that formerly homeless and very low-income people can pay and allow developers to collect closer to market rents. That makes it easier for developers to pull in other financing streams for their projects and to cover costs like maintenance and onsite services for tenants.
In the past five years, the Housing Commission has doled out about 1,670 project-based vouchers and the agency reports that over a third of new families who received rental assistance during that time had project-based vouchers.
About 78 percent of the Housing Commission’s more than 3,700 project-based vouchers are now reserved for formerly homeless San Diegans.
Housing Commission Vice Chair Ryan Clumpner deemed project-based vouchers the single largest financial tool that the agency has had to reduce homelessness – and said the agency ran with that strategy.
Over the last decade, agency data shows its commitments of project-based vouchers to formerly homeless residents more than quadrupled.
But Clumpner emphasized that the Housing Commission’s focus on project-based vouchers has come at a cost in more recent years. Since they come from the agency’s general pot of rental assistance resources, the Housing Commission’s project commitments have led the agency in recent years to hand out fewer vouchers to families on its Section 8 waiting list as funding got more constrained.
It’s been a zero-sum game – and it’s ending.
“We’re now at the point where we have exhausted that resource almost entirely,” Clumpner said.
Wakeland Housing and Development Corp. CEO Rebecca Louie is concerned how the agency’s decision to stop offering project-based vouchers will affect the production of housing for especially low-income San Diegans for years to come.
“It just means we’re going to be building less for our very, very poor,” Louie said.
Wakeland has relied on project-based vouchers in four recent low-income housing projects. Louie described those vouchers as “gamechangers” that fill financing holes and allow projects to serve more vulnerable San Diegans.
The Housing Commission reports that it has already committed project-based vouchers to nearly 1,000 housing units that are still in the pipeline.
Not doling out more of those for the foreseeable future means the region will eventually see a slowdown in new housing for those with the lowest incomes, especially people now living on the streets who desperately need homes with supportive services to stabilize.
Rachel Hayes, 57, is worried that means fewer San Diegans will get the same opportunity she did last year. Hayes was homeless and on the city housing agency’s Section 8 waiting list for more than a decade before moving into a one-bedroom apartment in San Ysidro last June with a project-based voucher.
Hayes is too young to qualify for Social Security and said her past applications for disability income were repeatedly rejected – a common dilemma – despite health issues, including a stroke a few years ago. That means she doesn’t have any income to pay the rent.
Now she’s living at a complex that hosts regular community gatherings and offers residents access to healthcare, classes and a playground for the children who live there.
“It’s given me the foundation to rebuild my life,” Hayes said.
That foundation has allowed Hayes to regularly attend local government meetings to advocate for homeless San Diegans, volunteer at one of the city’s inclement weather shelters and deliver food from her church’s food distributions to neighbors.
Hayes is disappointed about what the Housing Commission’s tough decision means for those who remain on the street.
“All it’s gonna do is slow down putting people in housing and that’s scary,” Hayes said.
Jones said the housing agency hopes to find other ways to spur supportive housing development, but its prospects are uncertain.
One potential option is to partner with the county on new supportive housing units rental subsidies tied to the Proposition 1 behavioral health reform measure voters approved in March.
But the commission won’t be able to rely on a crucial tool it’s used to facilitate past deals.
“If we can make it happen, we don’t have vouchers to put towards it,” Jones said.
Housing Commission Chair Mitch Mitchell said the agency warned city leaders that its stock of vouchers was drying up in fall 2022 when Midway Rising was selected to redevelop the Sports Arena area.
The Midway Rising team counted on dozens of project-based vouchers to help fund its affordable housing.
Mitchell recalled telling Gloria’s office that it couldn’t promise those vouchers would materialize.
“As far as a drawer full of vouchers being available for us to provide, that is just not the case,” Mitchell recalled saying at the time.
Now that’s a certainty – at least for the foreseeable future.
Charles Schmid, CEO of the project’s affordable housing partner Chelsea Investment Corp., said he remains confident that Midway Rising can supply the promised affordable housing, especially given its roughly decade-long development window.
“Our commitment to deliver 2,000 affordable units has not changed and we are committed to delivering this number, and the availability of vouchers does not impact that commitment,” Schmid wrote in an email.
Gloria’s office didn’t respond to questions about previous warnings from Commission officials but said it expects the Midway Rising team to find a path to proceed with the 2,000 affordable housing units it pledged.
“It’s the responsibility of the project team to secure financing to deliver on their commitment of 2,000 affordable units,” Gloria spokesperson Rachel Laing wrote in a statement. “They understand they cannot rely on vouchers due to scarcity and need to demonstrate a feasible plan regardless in order to execute the agreement with the city.”
