Slow-Growth Splits Groups in San Diego : Initiatives Will Be on Ballot in City, County Elections

I’d rather be Insane Diego.

Bumper sticker message

Insane is what observers of the real estate market here might become if they try to reconcile the conflicting facts and figures.

The city is currently operating under an interim development ordinance that limits, among other building, housing starts to 8,000 a year. On July 29, the City Council adopted its land-use element to replace an interim development ordinance passed last year. This is an alternative to a “Quality of Life” initiative that would drastically reduce that number of housing starts, if approved by voters in the Nov. 8 election.

On top of this, the county will have two growth-management measures on the ballot, covering unincorporated areas, but to be voted on by all the electorate. The county Board of Supervisors unveiled its measures last week.

There will also be a county equivalent of the “Quality of Life” initiative, according to Kim Kilkenny, legislative counsel of the Construction Industry Federation.

“Residents of the city of San Diego will face at least five growth-control ballot measures in November,” Kilkenny said, adding that 12 of the county’s 18 cities already have some form of growth control.

Virtually all the suburban communities, from Oceanside and Del Mar on the north to El Cajon on the east, are limiting growth, so San Diego lacks the affordable housing safety valves that Orange and Los Angeles counties have in the Inland Empire and the Antelope Valley, respectively.

As part of its efforts to attract people to downtown, the City Council and the Centre City Development Corp. (CCDC) has approved a $52-million, 40-story mixed-use residential/retail development called The Courtyard in the budding downtown residential area known as the Marina development area. (See related story on Page 4).

San Diego County ranked eighth in the nation last year in single-family residential building permits, with 15,400, according to the National Assn. of Home Builders. (First was Atlanta, with 31,570, followed by Washington, 29,440, and Riverside-San Bernardino, 28,530.)

‘Chilling Effect’

San Diego was third in multifamily permits last year, with 15,110, according to the association. (First was Los Angeles-Long Beach, with 38,640, followed by Orange County, with 15,340).

NAHB President Dale Stuard, an Orange County-based builder, said growth-control measures have a “chilling effect on building activity. For example, in San Diego, new home construction has already dropped off considerably.”

There were 2,680 residential permits for the first quarter of this year in San Diego, far below the 3,900 for the same period in 1987, Stuard said.

Economist Peter Navarro, a backer of the Quality of Life initiative, accuses building trade associations of “waving the bloody shirt” by blaming the cyclical decline in building on growth-control measures.

Judging by the census figures and estimates, a lot of people would rather be “Insane Diego:”

San Diego County, with 1,862,000 people in the 1980 census, was the state’s third most populous county, behind Los Angeles (7,477,000) and Orange (1,933,000), according to the Western Economic Research Co., Encino. The demographic research firm estimates that San Diego County will have 2.5 million residents in 1990, almost 700,000 more than a decade before.

According to Mike Long of Western Economic Research, San Diego County already has passed Orange County to gain the second-place spot: He estimates its current population at 2,347,400, compared to the 1988 estimate of 2,249,500 in Orange County.

If the Quality of Life initiative passes in November, Robert Morris, executive vice president of the Building Industry Assn. of San Diego, believes that San Diego could find its attractiveness to employers diminishing and eventually disappearing.

“We could find ourselves in the same kind of situation as 1957 and 1960, when General Dynamics laid off thousands of engineers,” he said. “Long-established companies could decide to expand elsewhere, or even move to a place where housing is more affordable.”

He said that based on 8,100 units produced in 1987, the 4,000-unit limit would represent a 50% decline--what he termed a meat-ax approach to growth control.

With continued population growth and limited housing production, home prices can only go up, Morris said.

Changes in Jobs

He believes that policies of artificial building permit caps do nothing to stop growth. Availability of jobs could change, with longtime companies opting to go where housing is more affordable, he said.

Thanks to large numbers of retirees, including many former military personnel, San Diego per capita incomes are below those of Orange and Los Angeles counties, Morris said.

The development community in San Diego believes in what Jerry Clarke, president of the Keith Cos., calls “intelligent growth.”

“San Diego has the opportunity to learn from the lessons of Orange and Los Angeles counties about the perils of unplanned growth,” he said, adding that from his perspective, San Diego and its suburbs are doing a better job than its neighbors to the north.

His firm is a Costa Mesa-based architectural and engineering firm that numbers among its clients both residential and non-residential developers.

Navarro, an economist in the School of Business at the University of San Diego, believes the reaction of the building community to the Quality of Life initiative grossly misrepresents the measure.

The initiative is a comprehensive growth-management plan that would force San Diego to grow within its means--not a nefarious plot to strangle a robust economy by a bunch of radicals, he argues.

“The only way the number of permits will fall to the 4,000 units per year level criticized by the Building Industry Assn. and much of the news media is if all of the following happens:

“The city fails to ensure an adequate water supply, fails to acquire an additional landfill site, fails to meet federal requirements for air quality and fails to improve traffic congestion,” he said. “A failure to meet these standards would be the height of irresponsibility and lead to the de facto Los Angelization of San Diego.”

Spreading Employment

Navarro further argues that growth management will actually be good for construction workers, assuring them of steady employment over a longer period of time than would unrestrained development of the Houston/Dallas/Denver pattern.

He has served as an adviser to the City Council in its efforts to work out a growth-management initiative, he said. As for the argument that growth control would “shut down” the San Diego economy, Navarro points to a study made for the council by UC Berkeley, which shows that a hypothetical annual building permit cap of 4,500 would result in a minuscule 3% decline in building construction employment in San Diego.

Bob Glaser of San Diegans for Managed Growth said that his group doesn’t favor a numerical growth limit, such as that mandated by the Quality of Life initiative.

First Growth Measure

Glaser, an unsuccessful City Council candidate in the recent election, heads the La Jolla Group, a political consulting firm.

San Diegans for Managed Growth was organized to pass the Proposition A growth-management measure, the first in San Diego. Proposition A was adopted in 1985, he said, leading to the current scramble for growth-management initiatives.

“Our sensitive lands element basically tells builders where they can build by telling them where they can’t,” Glaser said. “We want to eliminate building on ridges, in flood plains and in other sensitive areas. There is plenty of space to build in areas like Tierrasanta.”

Next week: Non-residential construction is booming in San Diego.