Government agencies in San Diego will attempt to do the impossible: Get a developer to construct affordable for-sale housing.

Housing analysts and developers have said for years it is futile to try and build anything under roughly $500,000 because of regulation-heavy California.

Regardless, San Diego’s Economic Development Department has issued a request for proposals to build the housing on city-owned lots in Southcrest. Despite all the effort, the minimum requirement for the city is to build three homes, so it might not have much of an impact.

Christina Bibler, director of the economic department, said the site could accommodate at least six units. She said it is not possible to give an estimate at this time how much the homes will cost.


It might not be a true experiment in building economical housing. The city’s request said it does not anticipate giving financial assistance or money to buy the land. However, it did say the city may give the land “through favorable lease terms or for less than fair market value for the right project.”

Totaling just over 22,000 square feet, the three parcels are bounded by Z and Alpha streets with 40th Street to the east. The site is across the street from the Cesar Chavez Elementary School.

The city says the land could support attached condos, or small-lot homes. It appears ideal for a tiny home project, but would have more for-sale opportunities if a developer went with condos. There is a maximum height of 40 feet for the property, so a large condo tower would be impossible, but it could possibly hold a smaller townhouse project.

Housing consultant Deborah Ruane, who is the former executive vice president of the San Diego Housing Commission, said the city’s effort is part of a broader pressure on public agencies in California to free up available land for housing. She cited recent plans by the Metropolitan Transit System to make available underused parking lots and other properties as an example.


“I think it is a start in the right direction,” she said. "(However) they have saddled it with a lot for developers to jump through.”

The city wants the homes to have at least three bedrooms and two bathrooms and meet LEED Silver standards, an environmental designation set by the U.S. Green Building Council. Respondents must also demonstrate they have a community outreach plan, a history of building affordable for-sale projects, and a strong credit and finance history.

Ruane said a developer that would build three units probably isn’t a major company, more like a mom-and-pop operation. She said it would be nicer if the city had relaxed some of the requirements, but she understands how this project may be more of a pilot program.

No bids have been submitted for the RFP yet, but Bibler said they have heard from interested parties who might turn in proposals. Final bids are due Nov.1. The city council is expected to review the project in January.


This is the first time the city has sought to sell land with the goal of a developer building affordable for-sale homes, said city spokesman Jerry McCormick.

However, the city has been involved in several programs over the years to assist low-income buyers. For example, in 1991, a closing-cost subsidy program was implemented with several local agencies to help low-income families purchase existing homes in Normal Heights, City Heights and Southeast San Diego.

The city’s request for proposals called for homeownership that is affordable for households earning 80 percent to 150 percent of the area median income.

San Diego’s Habitat for Humanity has a for-sale housing program that includes five single-family homes in El Cajon and 11 townhouses in Logan Heights. Similar to the city’s project it would be hard to categorize the homes as an experiment in how to build affordable for-sale homes. The Habitat properties were built with the help of volunteer labor and donations.


The Logan Heights townhouses were priced around $400,000 and the El Cajon homes were roughly $480,000. In both cases, households had to earn around 50 percent to 80 percent of the area median income ($53,500 to $85,600) and demonstrate they could afford to devote 30 percent of their monthly income to housing costs, including a mortgage, taxes and homeowner association fees.

Monthly payments were set at the 30 percent rate, so the additional cost of the home was covered with a loan due after the 30-year mortgage was up. It was anticipated that the homeowners could pay it off before the end of the three decades.

Shayna Hensley, director of homeowner relations for Habitat, said it got roughly 150 applications for the 11 townhouses and around 100 applications for the five houses.