Development Challenges

By Josh Vasbinder, The Dinerstein Companies, Member BIA Board of Directors
When I started in the development business over a decade ago, I was optimistic and confident that my company could develop 1,000 units a year in San Diego. I didn’t know any different. That seemed like an achievable goal. I included this on my “vision board”. Today, while still confident in our ability to find sites and get them capitalized, I was clearly naïve. Today, I am more realistic with our company’s goals for San Diego (targeting 250 units per year). More importantly, I am acutely aware of the challenges to developing in San Diego, and California in general.

 

Those challenges include just about anything and everything you can image (and some you probably can’t).  From winning the bid to securing the entitlement, constructing a project, or trying to stabilize the property; and everything in between. Over the last 10 years it takes us five years from site identification to project stabilization. Certainly, there can be exceptions to this timeline, but generally speaking the majority of our development projects take five years from concept to residents moving in.

When I first started out, the challenges were the ones you typically hear or read about. They were primarily focused around community opposition to development and CEQA. Today, those two challenges still very much exist, but we’re now fighting labor, raising construction costs, new ordinances and processes, and increasing rents.

Over a decade later, I have seen these challenges continue to evolve and shape my decision making.  The reality is that many of these challenges aren’t going away any time soon. All of us, including myself, need to continue to reflect on the “vision” we had when entering the industry, and meet the housing needs of our city with a shared sense of optimism and confidence that has carried us thus far. I am proud of the efforts the BIA has taken to bring the various participants in our industry together.  If we want to create more housing, we need to collectively work together to make further progress.