San Diego Market Report
Affordable housing has managed to break new ground in San Diego at a time when other construction sectors have slowed.
“We are finding that there is a lot of opportunity in affordable housing right now,” says Jeff W. Graham, vice president of redevelopment for Centre City Development Corp., a non-profit corporation created by the city of San Diego to implement downtown redevelopment projects and programs.
“With the decline in land prices, we are able to acquire sites for far less than we would have had to pay two or three years ago and we are also finding that construction costs have come done anywhere between 10% and 20% from they were at their peak a couple years ago.”
But Graham admits the trend may not last.
“[Affordable housing] is hot as long as we have local funds to use for them and if state and federal funds start materializing in the next 12 months or so,” he says. “We have a limit of how much we are willing to pay per unit for an affordable housing development downtown and that typically ranges between $100,000 and $150,000 per unit. Once our subsidy starts going over that, our board starts to push back and wait until other funding sources come in to help fill the gap.”
Lindsay Quackenbush, vice president of development for San Diego-based Affirmed Housing Group, says the city’s affordable housing market is “healthy” relative to other cities in the state because when the state raided local redevelopment agency funds last year to try to balance the budget, San Diego had CCDC and the San Diego Housing Commission to help with funding.
Graham says that even though federal and state funding sources have evaporated over the last couple years, the city still has eight affordable housing projects under construction or in the pipeline. That translates to 1,096 units, 956,000 sq ft and $381.6 million.
One of the biggest and most exciting of these projects is Ten Fifty B, a 23-story affordable housing/mixed-use tower located in the heart of downtown San Diego.
Developed by Affirmed Housing, the $91-million project is the first 100% affordable housing high-rise in San Diego. When complete in May, it will feature 229 units, 13,451 sq ft of street-level retail space and three levels of underground parking with 122 spaces. Units include studios and one-, two- and three-room flats. The retail component will feature financial institutions, a Jamba Juice and Burger King.
Burger King is the only surviving entity from the existing high-rise, which was originally planned as a 22-story, 174-unit condo development by KB Home. When KB walked away from the deal, Affirmed Housing stepped in.
To better suit affordable housing, San Diego-based architects Martinez + Cutri Corp. reconfigured the 260,000-sq-ft building and chopped 10 in. from the height of each floor, allowing room for another story without increasing the size of the building and keeping the original entitlement in place.
“The building was originally designed to be attractive, market rate condos with high floor-to-floor heights,” says Anthony Cutri, Martinez + Cutri principal partner. “But when it became affordable housing, the idea was to maximize the number of units.”
But while the interior may say affordable, the exterior of Ten Fifty B has market-rate written all over it.
“It’s interesting that modern affordable developments are physically not differentiated from market-rate housing...