Making a Case for Middle Income Housing

By Ken Sauder, Wakeland Housing & Development Corp., BIA Board of Directors  
For more than forty years, I have worked in the world of affordable housing development. Our industry creates high-quality homes that help our communities thrive by offering affordable rents to working families, veterans, and others whose incomes are limited. So, it may seem strange that I’m using this article to discuss middle income housing. But these two very different parts of the real estate market are intrinsically linked, and housing that serves the middle of the income spectrum is a critical lynchpin that holds the entire housing sector together.


We all recognize we have a housing shortage on our hands now. Some of the best minds in our San Diego region are working on this problem. They’ve come up with many ways to resolve the housing crisis, but the best solution is also the most obvious: we need to increase the supply of homes – especially the supply of middle-income housing.


Why is middle income housing so important? As the market has tightened at the middle and prevented upward mobility, the folks at the bottom of the market have been similarly crunched. They’re being held back by high housing costs, and some have even been pushed into homelessness. The “housing ladder” that allows people to advance from an apartment to a home rental to home ownership is fundamentally broken.


There are many ways to increase the supply of middle-income housing, but the most basic involves cutting back fees and regulations. A recent Point Loma Nazarene University study shows these costs can add up to 40 percent to the cost of building new homes in San Diego County. We need to explore creative ways to remove these barriers. We also need to find ways to mitigate the high cost of land where these housing developments can be sited.
The San Diego Association of Governments (SANDAG) conducts an annual assessment of our region’s housing needs. Its 2018 report showed a shortage of nearly 30,000 homes for people earning moderate incomes ($95,150 per year for a family of four). That is a massive shortfall. If we can find ways to fill this gap, it will go a long way toward rebuilding the “housing ladder” and the entire housing sector will benefit.