EDC Report Critical of Initiative on Growth

San Diego unemployment will nearly double by the year 2000 and local industrial and commercial development will be severely curtailed if the Quality of Life Initiative is approved by voters in November, according to a study issued Thursday by the San Diego Economic Development Corp.

The report states that the initiative, by linking industrial and commercial development to reduced home building, will limit new job opportunities, causing unemployment to rise to about 9% by 2000. Industrial and commercial development itself would be reduced by about 59% over the 22-year life of the initiative, the report concludes.

Supporters of the initiative, however, disputed the EDC report’s findings, sharply criticizing it as a politically motivated thrust from a group that has already announced its opposition to the ballot measure.

Vested Interest?

Moreover, noting that the EDC received $394,200 last year from the city--with the rest of its budget coming from the private sector--initiative backers argued that the organization has a vested interest in, as one put it, “trashing our proposal” to make a City Council-approved growth-management proposition that also will be on the Nov. 8 ballot look better by comparison.

“What we have is not an economic analysis, but a political document,” said Peter Navarro, an assistant professor of economics at the University of San Diego who is an adviser to Citizens for Limited Growth, the group that qualified the initiative for the ballot.

The Quality of Life Initiative would restrict residential development within the City of San Diego to as few as 4,000 units a year by 1991, while the city’s measure, billed as a more moderate approach to controlling growth, would limit new housing to 7,590 units annually over the next three to five years. Two similar measures dealing with the unincorporated regions of the county will appear on the countywide ballot.

“If limits are imposed on residential development, equal restrictions must be placed on industrial (and) commercial development, and that will mean a loss of jobs,” EDC President Dan Pegg said. The EDC, which is charged with helping to create jobs and diversifying the local economy, estimates in its report that, if the Quality of Life Initiative is passed, the number of unemployed San Diegans will increase from 48,000 in 1988 to 90,000 by 2000.

The report also claims that, from 1989 to 2010, industrial and commercial development would be reduced by 37.2 million square feet, or 59%, from the levels that could be expected if the initiative were not in effect.

But Navarro and other supporters of the initiative questioned the manner in which the EDC arrived at those conclusions. In particular, they disputed the group’s interpretation of one key--and vague--passage in the initiative stating that, if the measure is approved, the city “shall develop and implement a plan (which) . . . results in a balance between housing, industrial and commercial stock.”

Using a series of economic formulas linking jobs to housing units, the EDC developed its projections of the initiative’s impact.

“The severity of these impacts is magnified by the inflexible 22-year life span of the . . . initiative,” the EDC report says. “This initiative locks the city into operating under inefficient and economically damaging policies beyond the turn of the century.”

Navarro, however, argued that the group’s findings are based upon “worst-case scenarios and unsupportable assumptions.”

“The EDC took this general ‘balance’ clause and concocted a whole bunch of assumptions about how the City Council might interpret such a requirement, which is something no one can possibly know now,” Navarro said. “This was a cosmetic exercise used to arrive at a desired bottom line, which involved getting out some numbers to make the initiative look bad.”