Opinion: More apartments eased rents. Townhomes could aid buyers.

San Diego’s most beloved neighborhoods, like North Park, Golden Hill and Sherman Heights, were built by people who needed a place to live and found one. But the bungalows, fourplexes and cottages that gave working San Diegans a foothold in those neighborhoods can hardly be built anywhere else in the city.

Rules written decades ago banned them. For 70 years, San Diego has been paying for that mistake in the form of a city its own workforce can no longer afford to live in.

Neighborhood Homes for All of Us is the city’s plan to fix that: family-sized townhomes, rowhouses and small duplexes built in the neighborhoods where San Diegans most want to live.

While San Diego rents are softening as new apartments are built, the cost of buying a home is not moving, and it won’t, because the rental and ownership markets run on entirely separate tracks. Renters benefit when more rentals are built, forcing landlords to compete for them.

However, a family trying to buy a home benefits only if more homes are available for sale. San Diego home prices now exceed nine times the median household income, among the worst ratios in the nation, according to Harvard’s Joint Center for Housing Studies. Building rental housing is important, but it does not change the math for a buyer.

The homes that would change it — family-sized, on the ownership track, in the neighborhoods where people most want to raise children — have been illegal to build for decades. San Diego produced roughly 7,000 condos and townhomes a year in 2005. By 2022, that number had collapsed below 500. Part of that drop is because of litigation rules that drove up insurance costs for builders, caps on pre-sales that finance these projects and high fees. Another major reason is that we simply do not allow starter homes on smaller lots. So, instead, builders default to rentals because that’s what current rules allow them to build profitably.

London Moeder Advisors, a San Diego real estate economics firm, finds that eliminating the city’s large-lot-size mandates could produce new townhomes at 42% less cost than surrounding single-family homes without taxpayer subsidies. While this price point is still high for many, it’s more attainable for young families starting out. And importantly, the price could drop further if the state advances reforms to address litigation rules and pre-sale caps that drive up costs.

The city’s program is also focused on adding homes in San Diego’s neighborhoods with the best-performing schools and most accessible jobs. These are also the neighborhoods with the most restrictive regulations on smaller starter homes. A teacher whose classroom is in La Jolla cannot afford to live there. A firefighter stationed in Mission Hills commutes from Santee. The homes that would let them stay are currently illegal to build in much of these areas. Neighborhood Homes changes that.

While critics may say San Diego already has the tools for adding homes to neighborhoods, why add another program? Because each of those tools was for a different purpose. None were designed to add more for-sale housing.

ADUs, the backyard homes now common across the city, typically top out at 750 square feet (because of fee cliffs) and entail intricacies when selling to own. Other tools, like Senate Bill 9, have been layered with requirements that make it far too complicated and expensive for many homeowners to split their lots to add homes. Laws like Senate Bill 79 are important for adding more housing near transit. But none of these tools focuses on family-sized, ownership-track townhomes in an established neighborhood.

The Neighborhood Homes initiative asks a simple question: Where do the families who can’t afford a million-dollar home but don’t want an apartment go? We can continue to say certain neighborhoods are off-limits to the teachers, trades workers and young families who want to live there, or San Diego can set its own terms for how they grow, with local standards in a form the city controls.

San Diego’s most beloved streets were not preserved into existence. They were built — a duplex here, a rowhouse there — by people who needed a place to live in the city they loved and found one. That is what Neighborhood Homes makes possible again.

Asad is a former board member of the YIMBY Democrats of San Diego County. He resides in Mid-City.