A Raid on Affordable Housing : Plundering S.D.’s Housing Trust Fund Is No Way to Finance City’s Needs

With the city of San Diego facing another tight budget year, there again is a movement afoot to raid the Housing Trust Fund. This time the raiding party is being lead by City Manager Jack McGrory, who is understandably desperate to find new funding sources for a city low on everything from police to library books.

But McGrory has picked the wrong target. The trust fund is a long-term investment that shouldn’t be cashed in simply to ease short-term budget woes. San Diego is one of the priciest housing markets in the country. It can’t afford to waver in its commitment to provide decent, affordable housing for low-income residents.

That’s especially true for a program that brings in $5 from federal and state agencies for every dollar raised locally. Many other cities are pulling money out of their general funds to take advantage of that bargain. Why should San Diego’s fiscal stream run the other way?

The fund provides financial assistance across the board--from first-time home buyers to shelters for the homeless. It has already suffered staggering revenue shortfalls because its chief funding source--development fees--slumped when construction activity nose-dived during the recession. The fund was expected to accumulate roughly $10 million from developers for the coming fiscal year. Instead, it will have $1.6 million.

At least that money’s safe: The city can’t legally touch the developer-fee side of the trust fund’s ledger. But it can go after the fund’s other revenue source--hotel room taxes. Room-tax contributions were supposed to be $3.2 million for fiscal 1993, but McGrory has recommended diverting every dime to the general fund.

If the City Council follows that advice, revenue in the fund will plummet 78%, from $7.3 million this year to $1.6 million next year. The number of housing units and shelter beds produced would drop from 1,340 this year to 300 next year. More than 1,000 jobs could be lost when projects aren’t funded. And, millions of dollars in federal and state matching funds will be diverted to other communities.

Why is the Housing Trust Fund repeatedly placed on the budget chopping block? Because it lacks a powerful constituency to protect it. People struggling to keep a roof over their heads can’t afford to hire well-connected lobbyists to pressure City Hall. But that doesn’t diminish their needs.

More than 80,000 San Diegans rely on government subsidies to pay the landlord every month. Another 45,000 live in overcrowded or substandard housing. And, 5,000 have no home at all. Housing officials predict that by 2000, a half-million San Diegans will require housing assistance. Gutting the still-fledgling Housing Trust Fund is no way to respond to that need.